Return Policy for Dropshipping

Last updated on 02 August 2021 by William Blesch (TermsFeed Legal and data protection research writer)

Return Policy for Dropshipping

Many dropshippers overlook a critical aspect of store creation when setting up their businesses. Namely, they neglect writing many of the legal agreements that can protect them and their customers.

One of the agreements that are most often ignored is the Return Policy. Perhaps the reason for this disregard is due to the fact that it isn't legally required.

However, while laws don't demand that dropshippers include a Return Policy on their website, most experts agree that choosing to write and display one is a smart move.

Why?

To begin with, a proper Return Policy can help you to retain customers. Think about it. No one likes to return goods they've purchased. Even more, people cannot abide having to return something when they have no idea what the rules are for doing so.

A clearly written Return Policy in plain, simple language can help avoid confusion when returns must be made. Remember that just one complicated, poorly managed return could cause you to lose that specific customer for life.

Why risk losing customers when you can easily avoid angering them in the first place?

In the article below, we'll review how to write a suitable Return Policy for your dropshipping website, what you should include in it, and where you should correctly display it.


What is a Return Policy?

Before we go over how to write your Return Policy, let's clearly state what it is. A Return Policy is a policy that plainly outlines the scenarios and terms under which cancellations, returns, and refunds may occur.

Many customers will check a Return Policy agreement before making a purchase since it is a legally binding agreement between the buyer and seller. Remember, many SaaS, ecommerce, and dropshipping companies do not share the same policies regarding cancellations, returns, or refunds at all.

One may provide refunds during a specific time frame, while another may not give refunds under any circumstances. Where you stand as a dropshipper on these issues ought to be clearly laid out in a publicly posted Return Policy for the benefit of your company and its customers.

Specific issues to address within a proper Return Policy are the following:

  • Countries eligible for returns and refunds
  • Whether time limits exist for the return of items
  • Whether your company offers replacements for returns
  • Whether returns are free (i.e., do you pay for shipping on the return?)
  • Whether there are items that customers are prohibited from returning
  • How fast refunds are provided (i.e., how many business days it takes)

Why Should You Post a Return Policy?

While we already mentioned the advantage of retaining customers, a Return Policy provides that benefit in two primary ways:

  • A clear Return Policy written in plain, everyday language that is publicly posted can boost the potential confidence customers have in doing business with your dropshipping company. The more confidence customers have, the more likely it is that they will do business with you, which in turn means an increase in sales.
  • Since a Return Policy is a legal agreement, it allows you to control the circumstances under which you'll accept returns and make refunds.

It's important to note that some return and refund laws demand that you accept all returns during a specific time frame if you don't publicly post your own Return Policy.

What to Include in a Dropshipping Return Policy

What to Include in a Dropshipping Return Policy

Remember that your dropshipping Return Policy ought to be customer-centric. While you obviously don't want to harm your own interests, you want to build trust between your company and your customers.

The easier you make things for customers to trust you and be happy with their overall experience in doing business with you, the more likely they'll buy from you more than once.

Therefore, you want to craft a Return Policy that appeals to a customer's sense of fair play.

Time Frame for Returns

Make sure to include a section in your Return Policy that stipulates how long customers have to return items. Make sure customers know precisely how long they have after receiving an item to let you know they intend to return it.

Here's how Best Choice Products lets its customers know this information in its Return Policy:

Best Choice Products Return Policy: Intro section with return time frame highlighted

Additionally, a good Return Policy will let customers know what kind of refund you'll provide them, if any. For example, will you give them store credit? Will you provide them with a product similar to the one that was returned?

Meowington's, a dropshipping company inspired by one woman's unconditional love for cats answers this question by allowing exchanges for returned items:

Meowingtons Shipping and Returns Policy: Easy Return and Exchange Process section

Who Pays for Shipping

You should also include a statement regarding who pays for the shipping on returns and under what circumstances.

As you can see in the following example, Pet Boutique places all of the financial responsibility for returns on its customers.

Pet Boutique Refund Policy: Return shipping costs section

The Process of Returns

Different dropshipping companies obviously have different Return Policies. However, all of those that have policies are able to follow them because they have a process for cancellations, returns, and refunds in place.

Having a process has the following benefits:

  • Gives customers the chance to decide what they ought to do when making up their minds about whether to return a product or not
  • Helps you to create order
  • Gives you an official document that you can use as a point of reference when dealing with customer returns

Best Practices for Return Processes

When creating a process for returns, the following are best practices to follow:

  • Ensure that your customers know about your Return Policy
  • Let your dropshipping supplier know about the return
  • Request a shipping label from your supplier and then send it to your customer
  • Customers will have questions about the status of their return shipment, exchange, or refund. It's, therefore, a great idea to provide tracking. You can also automatically text them once you receive their return.
  • Do not give your customer a refund until your dropshipping supplier has received the return and has issued you the refund first

Remember that you can take a lot of the frustration regarding returns out of the equation entirely by ensuring that label and shipping information is included in your Return Policy as well.

How Customers May Initiate Returns

How Customers May Initiate Returns

Again, making things as straightforward as possible for your customers is a best practice. Here's the simple way that Best Choice Products provides for its customers to start the return process:

Best Choice Products Return Policy: Contact us for a return form section

The Condition of Returned Items

Some companies specify that a returned item must be in its original packaging and unopened. Others aren't quite as strict.

Here are the requirements Woowlish demands regarding the condition of all returns:

Woowlish Return and Refund Policy: Conditions of item being returned section highlighted

Restrictions on Returns

Some dropshippers put restrictions on exactly what may and may not be returned. If you don't allow certain things to be returned, you should clearly spell this out in your Return Policy.

For example, Bestsellingus.com is explicit about the types of returns it will not accept:

Bestsellingus Refund Policy: Non-returnable items section

Type of Refund Given

It's also the right idea to spell out what kind of refund you'll provide to your customers. Some people want their money back, but others might be happy with an exchange for the same type of item or for another item with equal value.

You should take the time to make it perfectly clear what type of refund you'll provide your customers when a return takes place.

In the following example, Buymorex simply puts a credit on its customers' credit cards.

Buymorex Refund Policy: Method of refunds gives section

While your Return Policy may need additional clauses depending on your industry, your personal business practices and what you personally desire to do with how you handle returns and refunds, the above sections are fairly standard and a great place for you to start with creating your Return Policy.

After you have your Return Policy written, it will be time to display it for your customers to find with ease. Here are some tips and tricks for that.

Where to Display Your Return Policy

Where to Display Your Return Policy

Return Policies are like other legal agreements displayed on websites. They should always be displayed in a conspicuous, easily accessed area on your company's site.

One of the most common areas to display an Return Policy is in the footer, as seen here on Duvely's website:

duvely-website-footer-refund-policy-highlighted

Often, you will see other agreements such as a Privacy Policy and a Terms and Conditions agreement in this area as well.

A best practice is to add a statement within your Terms and Conditions agreement that summarizes your Return Policy, provides a link to the full policy, or that at least references the other policy.

Here's how Best Choice Products does in its Terms agreement:

Best Choice Products Terms of Sale: Products or Services clause excerpt with Return Policy highlighted

Other areas where you may wish to include links to your Return Policy are on the website chat and product, shopping cart, checkout, and FAQ pages. This will give your customers extra opportunities to take a look at your return policies before making up their minds about making a purchase.

Summary

The bottom line is that how you manage returns to your dropshipping company hugely affects both customer loyalty and sales.

  • Before making purchases, more than 60% of dropshipping customers review Return Policies.
  • Only 49% of online retailers (dropshippers included) actually post a Return Policy on their websites.
  • The vast majority of consumers expect return shipping to be free.
  • As long as the return process is simple and hassle-free, up to 92% of consumers say they'll purchase from the same store again

Remember that making a purchase decision without ever interacting with someone real and without ever seeing or touching a product in person is a reality in today's online world of E-commerce.

The very nature of the business creates a certain amount of uncertainty. The fact that a clear and straightforward Return Policy helps to reduce insecurity on the part of the buyer makes it a necessity.

Keep in mind that:

  • A Return Policy is a policy that plainly outlines the scenarios and terms under which cancellations, returns, and refunds may occur.
  • A clearly written Return Policy helps increase trust and confidence in your company.
  • An Return Policy allows you to control the circumstances under which you'll accept returns and make refunds.
  • A proper Return Policy should be written in plain, easy to understand language.
  • The Return Policy should be conspicuously displayed on your website in a common location, such as the footer.

You should always include important information within your Return Policy, such as:

  • The time frame under which you will accept returns
  • Who is financially responsible for the shipping of returns
  • How customers may initiate the return process
  • Requirements for the condition of returned items
  • Whether there are restrictions on what type of items may be returned
  • What kind of refund you provide in the event a return takes place

You cannot please everyone. As you work to grow your dropshipping business, it's almost a given that some customers are going to be unsatisfied with one aspect or another of doing business with you.

However, data shows that you're much more likely to find long-term success if you're able to craft a return and refund strategy that makes the entire process of cancellations, returns, exchanges, and refunds as painless as humanly possible.

Return Policies are a powerful tool which you can use to preemptively cut down on lousy customer experiences while simultaneously building trust and protecting your company.

William Blesch

William Blesch

TermsFeed Legal and data protection research writer

This article is not a substitute for professional legal advice. This article does not create an attorney-client relationship, nor is it a solicitation to offer legal advice.