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Creating a Dropshipping Return Policy: The Ultimate Guide for 2021

Afraid of dealing with returns in your dropshipping store? Check out this guide on drafting a dropshipping return policy and accepting returns.
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Drafting a dropshipping return policy that’s fair to your customers yet still doesn’t kill your dropshipping business can seem like a challenging task if you’ve never done it before. 

However, accepting returns and having a structured and transparent return process are vital for the success of your online store. 

So, how to create a great dropshipping return policy that fits your business model? 

Let’s jump right in and see!

What Is a Dropshipping Return Policy?

A dropshipping return policy is a written “rulebook” where the retailer or store owner explicitly informs their customers of the conditions under which it’s possible to request a return and refund and the specific steps of the return process. 

This dropshipping return and refund policy should be an essential page of any dropshipping or eCommerce store since it creates trust and adds a layer of safety for your customers.

Is Drafting a Return Policy the Obligation of the Dropshipper or the Supplier?

Each supplier will have (or should have) their own return and refund policy. And this is something that you have to read to match yours accordingly. 

However, your customers probably don’t know that you’re dropshipping items, and they don’t know who your supplier is. In their eyes, you’re the one selling the product, and they’re buying it from your online store, so you’re responsible for the return policy. 

And, they’re right! You, as an eCommerce store, should have your separate dropshipping return policy. 

But, as we mentioned before, try to match it to your supplier’s. And if you have multiple suppliers, be respectful of all conditions to avoid customer complaints. 

For instance, if your supplier offers only a 7-day return and refund period, it doesn’t make sense that you provide a 30-day money-back guarantee. 

Do Dropshippers Accept Returns?

Yes. The vast majority of dropshipping businesses accept returns and offer refunds since it would be morally and often legally wrong not to do so. 

The next best alternative that might work better for you if shipping is an issue is offering refunds without asking for a product return. 

How Do Returns Work with Dropshipping?

As soon as a customer asks for a return, you must act fast and create a return request at your supplier’s store. As soon as the item is returned to your supplier, they will refund you the money. 

To shorten the refund waiting time for their customers, you’ll often have to pay them back upfront before getting the funds back from the supplier. So, that’s something to keep in mind if you’re dropshipping with no money

Considering that dropshippers typically don’t hold any inventory, dropshipping returns are sent back to your supplier’s address or warehouse. 

However, this can be costly. In fact, it can cost you much more than simply letting a customer keep a defective product and offer a refund or replacement. 

Here are the three ways returns work with dropshipping stores:

  • Offer a free return and full refund (better for high-ticket items);
  • Offer them to keep the faulty product and give them a full refund (best for low-cost products);
  • Offer them to keep the product, plus offer a replacement item or store credit;

Does Shopify Handle Returns?

Shopify itself is only the online store builder or eCommerce platform that you use to host your store. As such, they aren’t responsible for handling returns to your customers.

Shopify dropshipping return policy 

So, if you dropship with Shopify, please draft and set up your return and refund policy page. Shopify has a free policy generator to help you with that. 

Why Do You Need to Have a Dropshipping Return Policy Set Up?

A dropshipping return policy page should be vital for every online store. A well-written return and refund policy can help you create trust, loyalty and boost your customer service game. 

Here are the main reasons why a dropshipping return policy is a must:

  • Your customers will have a clear and transparent process to follow;
  • You’ll avoid miscommunication and misunderstandings;
  • Your customers will feel secure, and you’ll prevent suspicion;
  • To comply with different customer country laws;
  • To increase your sales and conversions;
  • You’ll maintain a professional brand;

What Are the Most Important Things to Include in Your Dropshipping Return Policy?

Here are the key elements an excellent dropshipping return policy template should contain:

The items that can be returned

Are you accepting returns on all of your store items or just some? For instance, online stores that sell underwear among other products might choose not to accept returns on underwear due to the delicacy of the product. 

Furthermore, will you be accepting returns on items on sale? Or only on full-priced products? 

The timeframe in which returns are accepted

If a customer wants to request a return, how long do they have from the day of delivery? 

Usually, a 14-day money-back guarantee with no questions asked is the norm in Europe. However, many dropshipping stores stay competitive by offering a 30, 60, or even a 90-day warranty. 

Whatever you choose, ensure you synchronize with your supplier’s return policy. 

The condition of the items returned

Will you accept only damaged products and products that didn’t arrive on time, or will you also accept returns on wrong sizes and fits?

Then, will you only accept unused items or also slightly worn ones? Packed or still unpacked?

Dropshipping items

Ensure you highlight all of these things in your dropshipping return policy so that your customers know what to expect in advance. 

The cost of the return shipping

Your dropshipping return policy has to clearly outline who covers the costs for the return delivery of a product. 

Do you offer free returns (you cover the shipping)? Or will the customer have to pay their own return shipping? Or, perhaps you’ll let the customer keep the product and offer them a refund as well?

These are all major things to straighten out on your return policy page. 

The return process and steps 

Have a structured and clearly outlined return process that’s understandable, straightforward, and easy to follow. Explain step by step what your customer needs to do if they want to submit a refund request and send the product back. 

Here’s a quick example:

Step 1 – Submit a refund request by sending an email to {your email}

Step 2 – We’ll send you an email back with the return address to send the product back

Step 3 – We’ll inform you once the product arrives back and offer you a full refund, a replacement product, or store credit;

How to Create a Dropshipping Return Policy in Shopify?

If you have a Shopify store, you’re in luck! Shopify has a refund policy generator that you can use for free to create your dropshipping return and refund policy. 

Shopify free return policy generator

Alternatively, you can do some research and check out other Shopify stores to see how they are dealing with returns. 

What Is a Good Dropshipping Return Policy Template?

As we mentioned above, there’s a free Shopify policy generator you can use to draft your dropshipping return policy, whether or not you have a Shopify store.

Or, go online and check out your competitors’ policies to understand the points to include. Generally speaking, a dropshipping return policy should contain at the very minimum:

  • Items that can and can’t be returned or exchanged;
  • How much time a customer has to return an item;
  • The cost of the return shipping;
  • A return address;
  • The conditions that have to be fulfilled;
  • The shape of the products returned (worn, damaged, used, etc.);
  • The steps and timeline of the return process;
  • The refund options – full refund, store credit, replacement product, etc.;

How to Give Refunds If You’re Using WooCommerce?

As an eCommerce plugin for WordPress, WooCommerce has its own “Orders” menu where you can find, manage, and refund any order you need. 

Woocommerce

WooCommerce will let you choose between an automatic refund or a manual one. Both will revert the order status, but if you choose the manual refund option, you have to do the refund process by yourself or through your payment gateway dashboard. 

If you’re dropshipping with WooCommerce, we recommend using the automatic refund option whenever possible since it takes care of the actual refund right away. All in all, WooCommerce refunds are easy to set up and process. 

What Are the Most Common Causes of a Return and Refund Request?

There are many reasons why a customer can request a return. Here are some of the main ones:

The product doesn’t match the description

One of the most common reasons an online store has a high rate of returns is that the customers receive a different product than what they expected – usually, in a negative connotation. 

Although your product description should be well-written, it shouldn’t be deceptive and give false expectations about a product. 

The product doesn’t fit or is the wrong size

The second most significant reason for having a high return rate is if the product isn’t a good fit or is the wrong size. That can be a common concern, especially for dropshippers who sell clothing or jewelry. 

To avoid this as much as possible, you could have a size chart to help your customers find the right fit. If you do have a chart and it’s correct and updated, you could mention in your return policy that you won’t accept returns based on wrong sizes. 

The product arrived with defects or damage

The next reason for high refund rates is products that arrive damaged or defective. 

Since the supplier is typically the one shipping out the product, they should also have a return and refund policy that covers damaged products. 

The product didn’t arrive at all or comes later

And finally, long shipping times and missed delivery deadlines are two other common reasons for refund requests. 

Trustworthy suppliers and warehouses close to your customers can help you prevent this issue. 

What Dropshipping Products Have the Highest Return Rates?

According to a 2021 Statista report, clothing and shoes have the highest return rate. Clothing is definitely the number one niche with the highest return rate – 25%, while shoes have a 15% return rate.

If you’re in the shoes and clothing niche, there are still ways to decrease your return rates and soften the blow as much as possible.

Dropshipping products that have high return rates

Sizing tables and charts

If you’re selling dropshipping products like shoes, clothing, accessories, or jewelry, always place a sizing table in your product description listings. Tell people the measurements of your sizes in inches and centimeters – to satisfy customers worldwide. 

Real-life product photos

Show the product on an actual person instead of just 3D rendered images and mockups. Doing this will help your buyers get an accurate picture of the product size, colors, and fit and decide if it suits them or not.

Customer reviews and user photos

Reading actual reviews and testimonials and looking at photos made by satisfied users is the best way to decide if a product is a good fit. So, let your customers see all those happy customers and reap the benefits of user-generated content. 

How to Get Fewer Customers to Request a Return?

Often, we get sidetracked trying to make as many sales as possible, so we start drafting the most eye-catching headlines and product descriptions ever. But what happens when the description doesn’t match the product? 

Well, you start getting more and more refund requests! Let’s see how to decrease your return and refund requests:

Write a fitting product description

The product description block is a great selling point, so we’re all aware of the importance of making it sound appealing and attractive. 

However, watch out not to cross the line from well-worded to just plain lying. It’s okay to embellish a little, but don’t misinform or make fake claims about the product. Doing that might increase your sales, but it will also increase your return rate. 

Upload good product photos

High-quality product photos where potential customers can see precisely what they’re buying are vital to your success. 

Good quality product photos

Pixeled or smudged photos where the actual condition, colors, or product fit aren’t too visible are a recipe for dealing with returns. 

Decrease your delivery time

Another reason customers might submit a refund request is the long shipping and delivery times. Today, nobody wants to wait 60 to 90 days to receive a product. And if they do agree to this, it’s because they read it all upfront. 

The best ways to shorten your shipping times are finding a supplier with warehouses close to your customers or working with a dropshipping agent with a worldwide fulfillment center

Often, primarily if you’re dropshipping with AliExpress suppliers, you might have the problem of long delivery. In this case, there’s nothing you can do to shorten these delivery times. 

However, informing your customers upfront can make them aware of this before deciding to purchase. Even though all your instincts scream that that’s a bad idea, it’s the best way to avoid return requests and refunds. 

Stay in touch after the purchase

Another mistake we often see dropshippers make is forgetting all about customer service after a sale is closed. 

Stay in touch after the purchase

Don’t just disappear after a customer makes a purchase. Failing to follow up feels very scammy and can push many customers to request a refund just out of fear of getting tricked. 

Remember that, ideally, you want customer loyalty and repeat sales. So, your job doesn’t end when you make a sale – quite the opposite. 

Your customers and clients should be your top priority, and you should work on building long-term relationships with them based on trust. 

A solid return policy that’s easy to find

The dropshipping return and refund policy should be written in plain words, include every necessary point, and cover every imaginable scenario. 

Furthermore, it would help if you displayed it on your online store in a way that’s easy to find, locate, and read. With this, you inform your customers about the conditions and stay on the safe side of the law. 

How to Handle Returns when Dropshipping from China?

Although the delivery costs from China to the US are usually acceptable, shipping vice versa can be much more expensive. So, here are several options you could try:

Collaborate with a dropshipping agent

Getting the help of a dropshipping agent in China with a worldwide fulfillment center and warehouses close to your customers can help you reduce your return shipping costs. 

A dropshipping agent can help you buy in bulk and store in a warehouse that’s close to your customers, resulting in faster delivery as a bonus. 

Dropshipping agent in China

Find suppliers closer to your customers

Another option is to change your suppliers and look for ones that are closer to your customers. 

You could check out marketplaces like CJDropshipping since they keep stock in different warehouses worldwide. Or, maybe give Spocket a try since it’s full of US and EU suppliers. 

Offer refunds only, without returns

And your third option is to offer your customers a full refund, store credit, or a replacement item without asking them for a product return. If the return delivery costs more than the product itself, it’s not worth having it returned. 

Find suppliers who offer free returns

If you’re lucky enough to find a supplier that accepts free returns from your customers’ countries, keep them, and you’re good to go!

How Are Dropshippers Affected by Returns?

Selling dropshipping products with high return rates can negatively affect any business. Naturally, the most significant problem here is the loss of profits and the inability to plan your income in advance. 

How are dropshippers affected by returns?

However, more issues arise from having many customers submitting a refund request, such as an increased need for customer service and shipping logistics. 

And finally, you’ll have the return shipping costs to think of – who pays the return shipping? Is it the customer (not recommended)? Or you (better for customer loyalty but could result in losses? 

To avoid these return delivery costs altogether, often, dropshippers allow cash or store credit refunds without asking for the product to be returned. Doing this can save you some money, especially if you’re selling low-cost products. 

Can You Offer Refunds Without Returns?

Absolutely! If you’re selling low-cost dropshipping products, it’s often wiser to simply offer a refund or a replacement without asking for a product return. 

You might want to consider this possibility in cases when the return shipping would be way too expensive for the customer or yourself to handle. 

Typically, shipping from China to the US will be significantly cheaper than vice versa. So, it might be worth letting the customer keep a product. 

What to Discuss with Suppliers before Drafting Your Return Policy?

There are several essential questions to ask your suppliers before writing your dropshipping return policy:

  • In what cases do you accept returns?
  • What’s your deadline for requesting a refund (for instance, 14, 30, 60, or 90 days)?
  • Do you offer a free return option (or who pays for the return shipping)?
  • What if there are multiple items to be returned?
  • Do you offer a replacement product?
  • Do they exchange wrong sizes?
  • Will you accept a return if the package is opened?

By asking these questions in advance, before drafting your own return policy, you’ll learn your suppliers’ return policies and be able to match them to yours.

What Are the Pros and Cons of Accepting Returns?

On the subject of a dropshipping return policy, accepting returns shouldn’t even be a question but a given. 

In fact, if you dropship in Europe, you’ll have to provide a 14-day, no questions asked, money-back guarantee required by the law. Also, your customers in the US have the Federal Trade Commission (FTC) protecting them as buyers. 

Accepting dropshipping returns

So, if an item doesn’t come as described or arrives damaged, it’s often your legal obligation to accept a return request. 

However, offering free returns is where most dropshippers disagree. So, here are all the pros and cons of accepting free returns:

Pros

  • A better customer experience;
  • Increases customer loyalty;
  • Promotes repeat purchases;
  • Creates trust and credibility;
  • Better sales and conversions;

Cons

  • Some customers can take advantage of it;
  • Losing profit;
  • Challenging to plan profits long-term;

Does AliExpress Have Free Returns?

As a marketplace with different sellers, AliExpress has one general Free Returns program where you can return an item within 15 days for free if it’s unpacked and undamaged. 

That’s not the most useful option when dropshipping with AliExpress since the buyer will typically unpack and open the package, which means they’ll break the seals. 

There’s also the AliExpress Buyer Protection which is a guarantee that you’ll receive a refund within 60 days if the product:

  • Doesn’t arrive within the deadline;
  • Arrives damaged;
  • The product that came doesn’t match the description;
  • The buyer was promised a genuine but received a fake product;

If you use AliExpress suppliers for your dropshipping products, we recommend asking them individually about their dropshipping return policy. 

Does AliExpress Have a Return Policy?

As we’ve mentioned before, AliExpress offers a free return up to 15 days from arrival for products that aren’t opened or damaged in any way. 

AliExpress

They also have a Buyer Protection, which guarantees 60 days (for some countries 90 days) in which the buyer can ask for a refund. 

You can use the AliExpress Buyer Protection if the item doesn’t arrive within the deadline, comes damaged, or is different than described. 

What Should Be the Dropshipping Return Address?

In the case of dropshipping stores, the supplier is almost always in China. If that’s the case, then the return shipping address will have to be the one at your supplier in China. 

However, suppliers or dropshipping agents often have warehouses in the US and addresses closer to your customers. So, always ask if that’s a possibility. 

If you’re working exclusively with one supplier, and you don’t mind website visitors seeing it, you could place the return address on the return policy page itself. With this, you’ll decrease your customer service tasks and reduce unnecessary emails back and forth. 

However, if you’re working with multiple suppliers, simply have an email where customers can request a refund and get in touch with you. Then, give them the correct return address. 

Who Pays the Return Shipping Fee: the Customer or the Dropshipper?

Unfortunately, dropshippers often leave the customers to pay for their returns. But, if your supplier and return address are in China, this can be very costly to your customers, making them unlikely to buy from your store again. 

To avoid that, you could try one of these two things:

Return shipping fee

Free return shipping

Your first option to keep your customer loyalty and integrity as a dropshipping store is to send the product back for free. That’s typically the case for dropshipping high-ticket products where it’s more worth it. 

Offer a refund without a return

If a customer wants to return a low-ticket and cheap item, where shipping probably costs more than the item itself, it’s a good idea to allow them to keep the old product and offer them a refund or a new product. 

To Sum Up

Although dealing with returns can seem tricky at first, remember that having a quick and no-fuss return process can help you improve customer experience and retain loyal customers in the long run. 

And, instead of being secretive and pushing the policy page in the depths of your footer, we recommend being transparent about it. 

Having a structured dropshipping return policy that requires minimal effort from the customer’s side is the best way to succeed in eCommerce!

NicheDropshipping has an established return and refund policy that you can work around while dropshipping products from China.

Message us for more details.

About the Author

stanley nieh ceo
Stanley​

Over 10 years experience of foreign trade
Help 2k+ customers improve their dropshipping business

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stanley nieh ceo
Hey, I'm Stanley Nieh. My team & I are determined to help Ready-to-Scale drop-shippers grow the business rapidly to the next level. My only question is, will it be yours?

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