Returns and refunds are, you’d agree, the two most dreaded words among retailers.
And it’s worse for dropshippers.
Because you don’t get to see the product being shipped to your customer and have to as a result completely trust your supplier.
Granted, refund requests can be extremely annoying but that’s where a return policy comes in. a well-crafted return policy can help reduce the hassle of the return process for you and your customer.
Crafting a return policy from scratch can be quite a chore and most store owners simply don’t know how to write (and what to include in) a return policy.
You’ll find, in this article, insight to help you craft a winning return policy and some templates to help you create it.
But first off, what is a return policy?
What is a Return Policy?
Return policy is a document that informs your customers on the terms and conditions where you offer returns and how it happens.
A well-crafted return policy is important as it serves as a legal agreement between you and your customers.
Your return policy should be clear, concise, and placed where your prospects (site visitors) can access it easily.
Why do You Need a Return Policy for Your Dropshipping Store?
In most states and countries, every dropship store is required by law to have a return (refund) policy.
This is needed to protect consumers from dishonest sellers. The return policy serves as a legal surety that protects consumers from getting ripped off.
Beyond serving as a legal surety, a well-crafted return policy can also serve as a tool for gaining customers’ trust and increasing sales as studies have shown that free product returns have a net positive impact on a brands’ future sales.
Return Policy Laws in the US, UK, EU and Australia
United States – States determine the return policy laws in the US, although the Federal Trade Commission (FTC) steps in occasionally, especially in cases related with fraud.
However, in some US states retailers are required by law to display their return policy publicly.
United Kingdom – Retailers in the UK are required by law to offer refunds for faulty, damaged or wrongly described products.
European Union – Retailers are only required to offer refunds to a customer if the product is damaged.
Australia – According to the Australian Competition and Consumer Commission’s (ACCC) Website, retailers are only required to offer refunds or exchange if the product has a major problem.
Aside the legal aspect, a good return policy also serves to establish your business as trustworthy before prospects.
Before we get into the details of what to include in your return policy, let’s, first of all, look at some of the things you need to consider before creating a return policy for your dropshipping business.
Things To Consider Before Creating Your Return Policy.
Do Your Suppliers Offer Returns?
When choosing suppliers for your dropship business it is important to find out if they accept returns or offer refunds.
This is especially important because you want to be able to send faulty items back to the supplier and get a replacement or refund for your customer.
Studying your suppliers’ policies can help you know what’s obtainable and what’s not.
As a dropshipper, your return (or refund) policy will be based almost entirely on that of your suppliers. Say, for example, your supplier offers a 30-day return window for a particular product, you may want to make your return window for the product 20 days, to cover shipping times or any other delays.
Carefully studying the return policy of your suppliers can save your business from unnecessary loses.
Study that fine print!
Can You Work With Local Suppliers?
While this is not a standard rule, it can really be helpful. working with suppliers in your region makes dealing with returns less of a headache. Plus, it reduces the time it takes to get a replacement product across to your customer which can be a big boost to your overall customer service effort.
Note, though, that this comes at a cost as, most often than not, the supplier is just acting as an intermediary between you and the Chinese suppliers.
But it’s worth it.
What Does Your Thriving Competitor’s Return Policy Cover?
You can also find valuable insight by studying your thriving competitors’ return policies. this is especially important if you’re a new entrant into the market as it gives you insight into what works and what doesn’t in your niche.
Now to the crafting.
How to Craft a Winning Return Policy
It’s important to let your prospects know, just by looking at your policy, what is obtainable and what’s not.
Set clear expectations with your return policy so your customers know when they are eligible for a return, refund or replacement.
When creating your return policy there are some basic things to include. Those are:
- Who pays for returns? (You or the customer?)
- Countries eligible for returns
- A period when customers become ineligible for returns (after 30 days or eligibility is forever?)
- If your return policy does not cover some items (e.g., underwear, items on sale, et cetera)
- If you offer product replacement
- How long it takes to receive returns or replacement item
With this information, you can now use an online policy generator like termly.io to generate a return policy for your business.
Or you can alternatively look at the return policies of similar businesses and use them as a guide if you wish to create yours manually.
Here’s a sample template for a return policy:
“If for any reason you’re not happy with your purchase, please tell us immediately. We offer a full money-back guarantee for all online purchases.
It’s ok if you changed your mind. These things happen. We’ll even cover the cost of return shipping.
If the product is faulty, we will refund your money or send you a new item – your choice.
If you purchased the wrong size or we sent the wrong item, we’ll swap it over no questions asked.
To start the process, please send us an email with the following information:
- Your name
- Order number
- The issue (faulty product, wrong size)
- What you’d like (exchange or refund)
Now for the nitty gritty – you have 30 days from the date of purchase to issue the return request form. after 30 days from the date of your initial purchase, you will not be eligible to exchange or refund your item.
If you have any questions, please don’t hesitate to email us.“
Return Policy Examples
Here’s a sample of a good return policy:
One last one:
As a retailer it is important to see returns as just another aspect of the business you have to deal with and preparing ahead of time can save you from a great deal of stress.
Use the tips and the templates shared above to craft a winning return policy that works for your customers as well as your business.
What do you find most challenging about dealing with returns? Share with me in the comment section below.