The moment I had my first refund request on my dropshipping store, I panicked. I didn't know what to do because the product came directly from my supplier.
After some research, I found out that handling refunds and returns is not that hard when you're dropshipping in 2023. I will give you a short answer below to then dive deep into this subject!
The best way to handle refunds and returns when
Recognize the products that might not require returns at all
Before learning about the different kind of refund requests and how to handle all these refunds and returns in your own dropshipping store, it's important to know that some products might not be worth returning to your dropshipping supplier at all.
Some products can cost more with return shipping than sending a replacement to your customer. Furthermore, some dropshipping suppliers charge a restocking fee for products that are getting returned.
For example, a customer bought a bracelet worth $3, but it doesn't fit well. Now, this customer wants to return.
You're not at fault here. In such a case, you can simply offer your customer to send the replacement and let them keep the original product as well.
This would be much easier than taking care of the full returns process
And it's not only easier…
If you follow the example of the bracelet, it would be cheaper as well. Just let your customer keep the wrong one and just send a new bracelet.
Furthermore, this small act may have converted your customer into a repeat customer for your dropshipping store.
Common causes of refund requests when dropshipping
Learning about the most common causes of refund requests is a great way to get fewer refunds.
You will know what to focus on and where to double-check.
1. The product doesn't match your store's description
One of the most common reasons for refund requests is that the product your customer got delivered doesn't match your store's description.
Say that your store's description states that the product is 5 cm by 5 cm, but the product is like ten times bigger. Or that you say that the product color is coffee brown, but the real color is more black.
This would be either your fault by copying the data from your supplier wrong onto your store's description, or your supplier's fault by giving you the wrong data or sending out the wrong product.
You should double check the data your supplier supplied you with.
Like the example above, say that you checked again and it definitely says the color is coffee brown, this would be your supplier's fault.
If you think it's your supplier's fault, what you should do is directly send an email (or AliExpress message if you use AliExpress) to your supplier asking about this problem.
Ask him/her to send your customer a replacement or give you a refund (if they are at fault).
2. The product doesn't fit right or they ordered the wrong size
This could always happen when you have something like clothes or jewelry in your dropshipping store.
You can’t try things on when shopping online.
Maybe you've had this happen before as well when you were shopping online. Like you ordered some pants or t-shirts, and they didn't quite fit as expected.
When this happens, your supplier likely won’t cover the return costs. Unless, of course, they’re great.
Knowing your supplier’s policy about refunds and returns is going to make all the difference.
If you don't know your supplier's refund and return policy then you should ask about it.
In this situation, I recommend you allow returns regardless of your supplier’s policy.
This kind of customer service will give you lifetime customers.
But first check if the product is worth returning at all. Check if it might be cheaper to send a new one to your customer and to let the customer keep the product they have now.
Otherwise, I would just ask that the customer pays for return shipping since the mistake wasn’t on your end.
Clothing has one of the biggest return rates online
One thing you should make sure of is that you have a sizing guide on your
Also, make sure that the sizing guide is in the sizing of the country you want to dropship to and does not contain the Chinese sizing which tends to be smaller.
Personally, I don't suggest dropshipping any products that need sizing if you don't have much experience yet.
But if you think you're ready, check out this list of the best clothing dropshipping suppliers!
3. The product is damaged or defective
Although this won't happen that much if you have a reliable supplier, it could still happen sometimes.
If you're using AliExpress then use my guide here to select the best AliExpress suppliers!
What could happen is that the product doesn't work or it might be damaged while in transit to your
Ask your customer to send you pictures or a video of the damaged product. Then send these to your supplier.
If you have a good business relationship with your supplier, you might not even need pictures or videos, but it's a great way for you to know if your customer is speaking the truth or not.
Then most of the time you just have to send a message to your supplier and ask them to send a replacement to your customer or refund you the money.
All you have to do now with your customer is to apologize and convince them to wait for the replacement. More on how to handle refunds and returns below!
But what if you don't use AliExpress suppliers?
The above is true for most AliExpress suppliers, but most dropshipping suppliers won't cover return costs for defective items because in their minds, they didn't manufacture the products, so they aren't liable for defects. They simply view it as a risk of selling products to a retail market.
I suggest reading this forum post to get a better understanding of dropshipping suppliers and their return policies.
4. The product did not arrive on time or it was lost in transit
This is mostly for the people who are dropshipping from China.
Your customer might think that their package is lost because it's been already one week, while the usual shipping time will be between 2-3 weeks.
Or you're looking at the tracking information of your customer's order and you see that the last update was like a month ago.
The good thing now is that if you're using AliExpress and you can't agree with your supplier that the package is lost, you can open a dispute.
Do you want to learn more ways to deal with long shipping times when dropshipping from China? Then I suggest reading my article here!
In case you want to learn how to get a faster delivery time when dropshipping to decrease the chance of people asking for a refund while their package is still on its way, I suggest reading this article.
How to handle refunds and returns in your dropshipping store
Of course, knowing about all kinds of different refund requests is one thing, but learning how to handle refunds and returns in your own dropshipping store will bring it to the next level!
How do I respond to a refund request?
The best tip I can give you for writing the first response is to not mention a refund yet because this will mean that you lose all your profits from that customer.
This doesn't mean you should never refund, but if they accept to wait for a replacement, this would almost always be better for you profit-wise.
So what to say then?
First, check if it's cheaper for you to let your customer return the product to your supplier or to let your customer keep the product and just send a new one. You learned this at the beginning of this article!
If you've figured out that it's cheaper for you to send a new product to your customer then what I like to do is write something like this to your customer:
I'm so sorry to hear that your bracelet was not the same as it was described in our description.
Hello“First name of the customer”,
What I can do for you is send you the correct bracelet, free of charge. You won't have to send back the bracelet you got from us now!
Let me know if that would be alright for you.
What if your customer still wants a refund?
If your customer replies negatively to your email offering them a replacement then in your second email offer them a refund.
Sometimes it's best to just give the refund and never hear from that customer again. Some customers will be such a pain for you that it might be hard to keep giving them great customer service. I always try to turn it around, but otherwise, I will just refund.
Of course, you should not forget about the lifetime value of your customer.
This means that even though your customer raised a refund request, you can still make that customer come back to your dropshipping store again.
Just make sure your customer service is on point and that you did everything you could to solve the problem for your customer. Even though maybe, in the end, you still gave a refund.
You now have a chance that that customer will come back again to
Keep reading to learn more things you can do; things you can add to your refund or apology email so that your customer is more likely to come back!
Extra things you can do to turn a refund request into a lifetime customer
Sometimes just giving a refund or sending a replacement is enough, but this doesn't automatically mean that this customer will come back to your store again.
Here are some extra things you can do to make sure your customers are happy after their refund request.
- Exclusive Coupon Code: Give your customer a discount code for their next purchase. This is a great way to get them to come back.
- Store Credit: Give them store credit for the refund amount, maybe even with something extra.
- Offer a Product Upgrade for Free: Just make sure you have an upgrade available for that product.
- Free Product: If your customer accepts waiting for the replacement, you could send them an extra product. This could be low-cost for you, but could mean a lot for your customer because they are getting something for free!
Although these things are relatively small for you and might be low cost, they can help your customer rebuild trust in your dropshipping store.
This is for one goal: To get them to purchase again!
How do I deal with returns in my dropshipping store?
So what if you let your customer return the product? How do you deal with returns when you are dropshipping?
When a customer is returning a product, the process will look like this:
- The customer contacts you to request a return.
- You request an RMA number (return merchandise authorization) from your supplier.
- The customer sends back the product(s) to your supplier. And your customer writes the RMA # on the address.
- The supplier refunds you for the wholesale price of the product(s).
- You refund the customer for the full price of the product(s).
The only thing now to decide is if you pay for the return shipping costs or if you let your customer pay for it.
Another way to deal with returns is to use the AfterShip Returns app.
If you're interested in how the return process looks with this awesome app, take a look at the image below:
You can click here to see a demo of the return page.
What if I get a chargeback?
A chargeback is when a customer disputes a charge with their bank or credit card company, rather than asking for a refund from your store directly.
This can happen for various reasons, such as dissatisfaction with a product, failed delivery, or even fraudulent activity.
Chargebacks can be a headache for dropshippers as they are typically time-consuming to deal with and could even lead to your account being banned by payment processors if they occur frequently.
This is where Chargeflow comes in:
It's an automated solution that uses artificial intelligence to manage and fight chargebacks on your behalf.
It is designed to increase your win rate in chargeback disputes, saving you time and potentially a lot of money. And the great thing about Chargeflow is that you only pay when they successfully recover a chargeback for you!
How to get fewer refunds and returns requests when dropshipping
Now you know about the most common causes of refunds and returns and how to handle them in your own dropshipping store.
But do you know the best way to handle refunds and returns?
Of course… Get less of them!
1. Check for fraud
Before shipping any products, you should make sure the order is legit and that chances are low that it might be a fraud order.
Shopify has a great tool in their platform available which is a fraud analysis.
If you have a big order, you can always send an email to that customer asking them if it's correct that they ordered for that amount.
But nonetheless, don't forget to use your gut feelings as well.
Like when the billing address is in America and the shipping address is somewhere in India. This could be an example of a fraud order.
One great last tip is to be careful with PayPal eChecks. Wait until the payment arrives in your PayPal account and then fulfil the order. People might cancel the check once you send the products they ordered.
If you're interested in learning more, take a look at these credit card fraud signals.
2. Great customer service
This one is important for all the refund requests listed above. Always try to be as polite and understanding as possible.
I know… You're probably thinking, how?
This is definitely for the people who are dropshipping from China, but it could also apply for shorter delivery times.
The number one question you will get is where their order is.
If you don't answer polite and with a good answer then this could turn into a refund request.
You might think the same as me when you're getting your first refund requests. I thought, why do all these people ask where their package is while we send out an email automatically when their order was shipped with the tracking information inside?
Don't think too much like this because some customers clearly don't know, or they might think that you have more information that you're not sharing with them.
How do I respond to customers asking where their package is?
Always make sure you include the tracking information. Don't forget to explain that they can follow their order on that site.
I always include the tracking information as a link to 17track, or any other tracking site you're using (like this: https://t.17track.net/en#nums=”tracking number here”). Otherwise, you might get questions about how to use the tracking number.
I like to write something like this to my customers when they are asking about where their package is:
I tracked your package for you at:
Hello“First name of the customer”,
(link to tracking information of the order)
(write something about the latest tracking information update)
As you can see your order has arrived in the UK and is currently being processed in a distribution centre close to you.
(now you can write something about your estimate when the package comes)
We expect that your package will arrive before the end of this week.
Please let us know if your package hasn't arrived at that time. We will do our best to solve this for you then.
This way your customer has all the information he or she needs.
This will reduce the chance that this customer will ask for a refund. Most of the time you won't even hear back from them after you send this response.
How to reduce the number of people asking where their package is
The solution? Simple. Keep your customers engaged throughout the whole delivery process.
The app that I suggest you use for this is called AfterShip.
They will keep your customers engaged while their order is on the way. For example, this is what it will look like without using AfterShip:
And here you can see how much that changes once you integrate AfterShip on your dropshipping store:
Do you see how many more updates your customers get after using AfterShip?
Another great thing that you can do with AfterShip, is that you can create a branded tracking page. Just take a look at the image below so you know what I mean:
The current price of AfterShip depends on how many trackings you will do per month, but the great thing is that they offer a free trial of 14 days and they have a free account option:
You can click here to see their current pricing.
How to handle refunds and returns on your ecommerce platform
Now that you know how to deal with refund and return requests, you might have decided to give your customer a refund (his / her money back). It's important to know how to do that on the ecommerce platform you use.
How do I give refunds if I use Shopify?
Firstly, go to the order you want to refund. Then you see on the top a button called Refund items. Click on that.
Then you can select what you want to refund and how much you want to refund.
You can also refund less than the price of the product. This can come in handy if you agreed to give a partial refund.
You also have the option to notify your customer of the refund. This is a great way to let your customer know that their refund is on the way.
This saves you time sending an email every time you process a refund!
How do I give refunds if I use a different ecommerce platform?
I mainly focus on Shopify, but of course, you could use a different platform.
I personally don't have much experience on these ecommerce platforms, but I will link to great websites below to give you the information you need to handle refunds!
- How to give refunds if you're using WooCommerce
- How to give refunds if you're using BigCommerce
- How to give refunds if you're using Volusion
If you haven't picked an ecommerce platform yet, I suggest you pick Shopify. This way you can use tools like DSers which will make your dropshipping store a lot easier to handle. If you're interested then you can start a free 3-day trial + pay $1/month for the first 3 months here.
How do I write a refund and return policy when dropshipping?
Last but not least, to be able to handle refunds and returns like an expert, you need to have a refund and return (or return and refund) policy on your dropshipping store.
This is the agreement where you inform customers about your policies regarding refunds and returns.
It usually includes information like how many days they have to return a product, and how they will receive the refund (store credit, bank account, replacement).
Some great tips to follow for your refund and return policy:
- If your supplier gives you a 30-day return window, you’ll want to give your customers 20-25 days. This gives you and your customers some room to account for shipping delays, forgetting to send out the package, and so on.
- If you have multiple suppliers, try to cover all of their return policies within your policy . Say one supplier has a 25-day return period and the other a 15-day return period. You can give them a single return policy of 10-12 days for products from both suppliers.
- Remember you’re a dropshipping store and in case you have no physical office (many dropshippers don’t), then do not specify any return address on your refund and return policy page. You can just share an email address and let your customer contact you for more information about the return process.
- Only accept returns with a tracking number. The last thing you want is for them to claim they shipped your item, and it gets “lost” in the mail.
If you want to learn more about how to write a good refund and return policy for your dropshipping store, I suggest reading this article here!
That article also contains a return policy template that you can use.
How do you handle returns when dropshipping from China?
Before we close off the article, I wanted to let you know that we have created an extra article for you!
This one is perfect if you're wondering how to deal with returns when dropshipping from China. It contains a few more tips, specifically for when working with Chinese dropshipping suppliers!
You can check out the article by clicking the link below:
So, there you have everything you need to know about how to handle refunds and returns on your dropshipping store!
You see that you could get a lot of different refund requests, but one thing is for sure, just be as polite as possible to your customer so that the chances of you giving out a refund get lower and lower.
If you were scared before about handling refunds and returns on your dropshipping store, I hope you're not anymore after reading this!
Don't forget that it all comes down to you and how you treat your customers. Treat them good and they might come back to purchase more!
If you have any questions or suggestions, let me know by commenting below or contacting me directly by pressing the “Contact Us” button at the top!
Getting started with dropshipping in 2023
So, are you ready to get started with dropshipping? Or maybe you have already started, but you’re looking to get some inspiration?
If so, then I suggest reading my complete Shopify dropshipping guide!
It's a huge article, but it contains everything that you need to know to create your own Shopify dropshipping store in 2023. It's like a dropshipping course, but for free!
Reading this article will surely help you to get started and to stay motivated while beginning and continuing your dropshipping journey!
Just don’t forget that success takes time. Keep improving each and every day!
Here are some of our best articles:
- AliExpress Dropshipping: A 20-Step Getting Started Guide (2023)
- The Complete Guide: Can You Start Dropshipping Without Money in 2023?
- How to Find Winning Dropshipping Products? (Product Research Methods)
- 23 Awesome Shopify Dropshipping Store Examples
Also, if you don’t have a Shopify store yet, then you can click here to get a free 3-day trial + pay $1/month for the first 3 months!