The blessing and the curse of running a dropship business is that you never handle the products. While this arrangement is highly convenient, and often saves you a lot in inventory storage costs, there is one important sticking point. What do you do if a customer wants to make a return or exchange? Understanding dropshipping best practices is essential if you want to arrange your business in this way.

Steps in a dropshipping return

There are several elements involved in returning a dropshipped product. They involve the customer initiating the return, communicating with the supplier, the customer sending the item back, handling the return, and issuing the refund or exchange.

1 - Customer initiates the return

First, the customer contacts you to initiate the process. Ideally, you should have a clear and transparent policy on your website that specifies time frames, conditions, and the returns process.

2 - Communicating with the supplier

Next, you need to communicate with your supplier. They will let you know if a return or exchange is acceptable to them.

3 - Customer sends the item back

According to previous  agreements made with your suppliers, the customer sends the item back. It might be returned to you, to the supplier, or to a third-party destination. For low-value products, a return might not be cost-effective, making it more practical for the shopper to keep the item.

4 - Supplier processes the return

Next, the supplier processes the return. This involves inspecting what they receive and determining whether an exchange or refund will be granted. They then contact you to let you know that the process is complete. At this point, you can issue the funds or the exchanged item.

Creating a strong returns and exchanges policy

When you create and prominently post a strong returns and exchanges policy, your customers will know exactly what to expect. As a result, you will experience fewer glitches and misunderstandings.

Make a policy that is detailed and specific. Be clear about how long a customer has to return something they have bought. Also, be fully transparent about what is and is not eligible for returns. For example, state that items must be in new and unused condition. Further indicate what particular items or conditions are ineligible for returns (e.g., sale or clearance goods).

Additionally, be clear about who pays for the cost of shipping the products and about what results a consumer can expect. For example, do you offer a full refund, store credit, or an exchange? This policy transparency enables you to protect your revenue while remaining fully communicative and credible.

More dropshipping best practices

Picking the best suppliers is as important as picking the best merchant account provider. Select those that have fast shipping times and minimal to no importation fees.

Instead of requiring that shoppers ship returns or exchanges to an international warehouse, set up a PO box to take orders as they come in. Then send a bulk shipment to the supplier at a significant cost savings.

Finally, work hard to convert refund requests into exchanges. Offering to let your customer exchange the product without the need to request a refund enables you to maintain a positive relationship with the shopper. It also keeps your brand and products in their homes and at the top of their minds, making future purchases more likely.

Returns and exchanges might be the most complex aspects of owning a dropshipping business. However, with a set of clear policies and good practices, you can provide excellent products to your customers while continuing to enjoy the cost savings and convenience of this model.