{"id":157019,"date":"2023-12-11T07:00:35","date_gmt":"2023-12-11T07:00:35","guid":{"rendered":"https:\/\/startups.co.uk\/?p=157019"},"modified":"2023-12-11T07:12:00","modified_gmt":"2023-12-11T07:12:00","slug":"dropshipping-returns-policy","status":"publish","type":"post","link":"https:\/\/startups.co.uk\/websites\/ecommerce\/dropshipping-returns-policy\/","title":{"rendered":"Dropshipping returns: how to create a successful policy"},"content":{"rendered":"

[vc_row][vc_column][vc_column_text]Dropshipping returns influence the success of a dropshipping business.<\/a> There are several factors that startup owners and side-hustlers need to be aware of in order to create clear policies on to satisfy customers. <\/span><\/p>\n

Crucially, there are legal requirements to consider. Customers have certain rights when it comes to returns, even when they buy the item online (known as ‘distance selling’). You can still create your own returns policy that offers the consumer more than their minimum entitlement in law, however.<\/p>\n

Whether you are just starting your dropshipping adventure<\/a> – or looking to maximise your existing enterprise’s chance of success<\/a> – this article will walk you through what you need to know about dropshipping returns and refunds.<\/p>\n

Why is a returns policy important?<\/h2>\n

According to ecommerce website <\/span>Invesp<\/span>, at least 30% of online purchases are returned, compared to 9% for bricks and mortar stores.  Q<\/span>uality control procedures throughout your and your suppliers’ businesses can reduce the number of items returned. Inevitably though, any online business, particularly <\/span>dropshipping<\/span>, which involves shipping goods to customers sight unseen, will have some goods sent back.<\/span><\/p>\n

Therefore, it’s crucial to have a return policy for your dropshipping store. Businesses that provide a straightforward, hassle-free return policy that puts the customer first will retain more customers. <\/a><\/span><\/p>\n

“It’s important to have a clear returns policy,” says Ron Stefanski, a college business professor, and the founder of <\/span>BusinessGuru.co<\/span><\/a>. “This builds trust with customers and makes things run smoothly. “The key is keeping it simple and easy to find. Your policy should clearly outline the steps a customer needs to take to return something.”<\/span><\/p>\n

Handling returns is straightforward if you are consistent, pragmatic, and fair. Depending on the value of the shipped item, it can be simpler to let the customer keep the product and send out a replacement. Otherwise, request they send it back to your supplier and decide if you should cover the shipping costs or not.<\/span><\/p>\n

What is a dropshipping returns policy?<\/h2>\n

A dropshipping returns policy is an agreement between the dropshipping online store owner and their customers. It specifically informs customers of conditions when a return or refund is due and explains how the process works when the policy is activated.<\/span><\/p>\n

Advise customers to request a return via email. Then reply to their email with the address of where the product should be returned to. After you receive the product back, tell the customer how they will receive their refund, credit, or exchange.<\/span><\/p>\n

Your returns policy must <\/strong>adhere to the law but you can also create a more generous returns policy should you wish. The terms should be included on the website. In most instances there is no difference between a returns and a refunds policy.<\/span><\/p>\n

Your external suppliers should have their own returns policy, but you need one too as there will be cases where it is your responsibility. <\/span><\/p>\n

Also, from the customer point of view, it is your store they are buying from, even though order fulfilment comes from the supplier. This is why your returns policy should normally match your suppliers, to ensure consistency of service. If you use multiple suppliers, try and match the combined policies as much as is practical.<\/span><\/p>\n

What are the benefits of a returns policy?<\/h2>\n

It creates trust and loyalty between the dropshipping<\/strong> business and its customers.<\/strong> This encourages customers to select your business for their purchase and reduces misunderstandings. Be polite in customer communications as this reduces the likelihood of them wanting to return the goods or get a refund.<\/span><\/p>\n

Invesp’s research also found 92% of customers would buy again if the returns process was easy<\/strong> and 67% of buyers check the returns page for policies before ordering.<\/span><\/p>\n

Further research from <\/span>Capital On Tap<\/span><\/a> reveals the impact of returns on business, illustrating why a fair, customer-focused returns policy can benefit your business. It discovered UK retailers are losing around £5.2 billion per year due to online returns alone,<\/strong> with 18% of orders placed with UK SMEs returned. Time spent dealing with returns is the biggest issue for small businesses, with 27.3% admitting this is challenging.<\/span><\/p>\n

It impacts restocking policies<\/strong> as SMEs don’t know how many products will be returned. Over a quarter of SMEs, 26.9%, said returns cause them financial difficulties. “Linking returns to inventory<\/a> helps restock returned items fast and keeps inventory accurate,” explains Stefanski.<\/span><\/p>\n

A precise returns policy makes the process of dealing with returns requests easier for both parties, reduces customer friction, clarifies financial issues linked to returns and offers a clear and transparent process<\/strong> to follow. <\/span><\/p>\n

“Streamlining returns is key for efficiency,” says Stefanski. “An easy online returns portal greatly improves the customer experience. It can generate labels, check status, and issue refunds automatically.” <\/span><\/p>\n

Another important reason to have a returns policy is to show your business complies with the different rules and laws<\/a> relating to customers from the UK (and abroad if you are selling overseas).<\/span><\/p>\n

Legal requirements for designing a returns policy<\/h2>\n

Drafting a returns policy that informs the customer, protects your cash flow, and<\/em> meets the requirements of the law can be tricky.<\/p>\n

Legally, businesses must offer a full refund if an item is faulty, not as described, or does not do what it’s supposed to. These are quite general descriptors which means that in the majority of cases customers can successfully argue for a refund.<\/p>\n

Consumer Contracts Regulations<\/strong> also state that the consumer has a goodwill cancellation period that starts the moment they place the order and ends 14 days<\/strong> from the day they receive their goods. After this date, the buyer also has a further two weeks from the date they request a refund from the retailer.<\/p>\n

After 28 days<\/strong>, the store can set its own return policy with stricter guidelines on when a return is allowed. However, within the first six months the item is still under guarantee, which means you must offer to repair an item if it breaks or turns out to be faulty (even if refunds aren’t given).<\/p>\n

After six months, <\/strong>the onus is on the customer to prove an item is faulty and there is no obligation for the business to offer a repair or refund.<\/p>\n

Some online retailers believe they do not have to refund an item just because a customer no longer wants an item (for example because it’s the wrong size or colour). However, for dropshipping this rule does not apply because the customer bought it without seeing it and is therefore entitled to request a refund.<\/p>\n

What should you include in your returns policy?<\/h2>\n

Include details of your returns policy on the order or delivery note, offering tickbox options if a customer wants to return. They can select the reason for return, and, if you offer these options, decide if they want a replacement, refund or exchange. These options supplement information contained on your <\/span>dropshipping store front<\/span><\/a>. A dropshipping returns policy can include:-<\/span><\/p>\n