How to Handle Refunds and Returns as a Dropshipper

Refunds. Returns. Two words that are dreaded for ecommerce entrepreneurs and dropshippers.

Refund requests aren’t always bad – you can still impress and delight your customers when they ask for a refund, even if it didn’t work out this time. It is very important for you to remain positive when a customer wants to return an order or ask for a refund. 

This will help to ensure that the customer has a positive experience and that the return or refund is handled smoothly. After all, you are the business owner. You are the face of your brand.

It is your responsibility to handle the situation in a professional manner and provide the best service possible for your customers. There are a few different ways to handle refunds and returns when selling on dropshipping platforms. What works best for you will depend on your product and customer base. 

Running a business is an essential part of success, but it can be challenging.

We’ll provide you with all the information you need to make returns and refunds a smooth process for your customers, and show you why a strong return policy can increase both your conversions and your revenue. 

Are you ready? Let’s dive deeper. It can be helpful to be aware of all the different ways people may want refunds, but it’s also important to be realistic about what can and can’t be done.

How do I respond to a refund request?

The best advice I can give you for writing your first reply is don’t mention a refund just yet, because that would mean you would lose all your profits from that client.

 If the customer agrees to wait for a replacement, this would almost always be better for your profit-wise. Then what to say? If return shipping is cheaper for you than replacing the product, let your customer return the product to your supplier. 

If replacement is cheaper for you, let your customer keep the product and send a new one. 

What if your customer still wants a refund?

If your customer replies negatively to your email and is persistent for a refund, offer them a refund in your second email.

Some customers can be such a pain that it might be hard to provide great customer service to them. I always try to turn it around to find out why they want a refund.

Here are the common scenarios customers what a refund and how to turn it around:

“I found it is cheaper in Amazon” – Offer them a price match to keep the order

“I decided not to buy” – Offer them a 20% discount and refund them 20%

“I need it urgently” – Fulfill the product from a supplier with a warehouse in their country for faster shipment

“It is from China” – Explain to them it is shipped from China that is why you can offer them such an attractive price.

“Where is my order? – Pass to them their tracking code and let them know where the parcel is

“Wrong size” – Ship a new one with the right size for free or 0ffer them a very small fee to cover the shipment cost

“Poor quality” – Request the customer to ship back and offer than a 50% refund (depends on your retrun policy), probably they will keep the item then go through all the trouble to ship back

Remember to consider your payment gateway chargeback and dispute rates when making these decisions. You won’t want your payment gateway to ban you. That is the worse case scenario.

How does other dropshippers reduce refunds?

  • State clearly the shipping delivery times to reduce disputes of customers complaining about not receiving their orders after a week.
  • Add in a clause that COVID-19 may cause delay to shipment to some countries
  • State clearly all sale items are non-refundable in your refund policy and direct customers to the refund policy so that you won’t have to refund them
  • Reply to customers in 24hrs on email and social media platforms
  • Change a slow supplier to a faster supplier
  • Change a new supplier who has a better quality if there are constant complaints on product quality
  • Change your product descriptions if it doesn’t match the customer’s product descriptions
  • Stock up in a warehouse and use a fulfillment center to speed up delivery times

How to make customer happy after a refund and come back again?

Here are some quick ways you can make your customer happy after a refund.

  • Coupon Code/Credits: Offer a discount code to your customer to make them come back to purchase again.
  • Send a Small Gift: You can send them a low-cost gift to express your gratitude if they decided not to refund and they might come back again in future.

Although these things might not seem like a big deal to you, they can help rebuild trust in your dropshipping store for your customer. This is for the purpose of getting them to purchase again.

To be a successful dropshipping store owner, it’s important to have a policy for refunds and returns. This will help you to handle customer issues smoothly and efficiently. This document outlines our policies on refunds and returns.

The return policy usually includes information like how many days they have to return the product, and how they will receive the refund (store credit, bank account, replacement).

Hope this sums up how to reduce refunds on your store and improve your margins.

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