April 7, 2020
Dropshipping Returns: How to Handle Returns and Refunds with Oberlo

Dropshipping Returns: How to Handle Returns and Refunds with Oberlo

In this video I’ll talk about how to handle
returns and refunds when dropshipping. When running a business, it’s inevitable
that you’ll have to deal with returns and refunds at some point. But what do you do when you’re dropshipping
products from the supplier straight to customers? I’ve helped many dropshippers process refunds
and returns, and I’ve seen what works and what doesn’t. Today, I’ll be giving you simple answers
to your biggest questions: How do returns and refunds work when dropshipping? What do you do with a returned product? And how can you turn a return into a repeat
customer? I know time is of the essence, so let’s
dive right in. Hey everyone, it’s Jessica from Oberlo. If you’re watching this video, you’re
probably the kind of self-starter who’s always learning and always hustling. But you don’t have to do it alone. Click subscribe to join our community of entrepreneurs
and get notified when we publish new videos every week. Now let’s talk about why returns and refunds
work a little bit different for dropshippers. In a traditional ecommerce business model,
the merchant keeps products in their home or in a warehouse. When a customer orders a product, the merchant
ships that product directly to the customer. If the customer isn’t satisfied, the customer
returns the product to the merchant. But when you’re dropshipping with Oberlo,
the merchant–that’s you–doesn’t carry inventory. Instead, when a customer orders a product
from your store, you then order that product from your supplier. The supplier ships the product directly to
your customer. In this scenario, if the customer isn’t
satisfied, what happens next? To answer that question, you need to keep
one thing in mind: customer experience. Think back to a time when you were the customer
looking to return or refund for a product. If the company fought with you or questioned
your intentions, you probably didn’t want to do business with them again. On the other hand, if the company was apologetic
and quick to fix the issue, you likely felt relieved. Personally, I’ve gone back to shop at stores
like that, because I know that if there’s a problem, I can trust they’ll take care
of me. Actually, we dropshippers can learn a lot
from our own experiences as customers. If you’ve had great, or not-so-great, experiences
when returning products, share them below so we can all learn from it. Keeping customer experience in mind, let’s
talk about how to address returns and refunds while dropshipping. [1. Ask reason for return or refund] If a customer requests a refund or wants to
return a product, the first thing you need to figure out is why. Politely ask the customer why they’re seeking
a return or refund. Make sure your tone is apologetic and positive,
not suspicious and negative. It’s really important that you ask this
question. Depending on your customer’s answer, you
could save a lot of money. That’s because you and your customer are
entitled to a refund if If you work with Oberlo suppliers and the product is broken, defective,
does not match the description, or never arrived. [2. If entitled to a refund, open a dispute] If your customer’s complaint matches one
of those reasons, you’ll get your money back and your customer will get their money
back. And the process for getting your money back
is easy. First, ask your customer for a photo of the
broken or defective product. If the customer never received their product,
you don’t have to ask for a photo. Once the customer sends you a photo, your
next step is to open a dispute within Oberlo. Here, I’ll show you how. In the Oberlo orders page, beside the order
you want to view, click the …. button followed by Order Details. In the help section, click to expand the category
that matches your dispute. In the expanded section, click Create Dispute. On the Dispute for order # page, select a
reason for your dispute. Describe the problem and attach pictures that
show the affected products. Click I would like to ask for a refund. Click Create Dispute. The supplier has two business days to get
back to you. They may ask some questions before they process
the refund. If there’s any cause for concern in this
process, you can always reach out to our Customer Success Managers. I’ll just note that the few times that I’ve
requested a refund, I’ve received it quickly and without any problems. Now, your supplier will probably ask if you
want a refund or if you want them to resend the product. It’s up to you to decide what is best for
your customer. Although you can offer a replacement or a
refund, I actually suggest doing both if your average product price is low. Yes, the supplier will only do one or the
other. You’ll have to pay out-of-pocket to do both. But, the extra cost is a small price to ensure
customer satisfaction. Your exceptional customer experience will
be a huge help in having them come back and suggest your business to others. Ok, so you’re entitled to a refund if you
work with Oberlo suppliers and your customer’s product is broken, defective, does not match
the description, or never arrived. Now, if your customer simply does not like
the product, you are not entitled to a refund from your supplier. I should mention that this doesn’t happen
very often. If you verify your product’s quality with
test orders, describe the product accurately, and price the product fairly, customers will
likely be satisfied with their purchase. But on the rare occasion that they’re not,
you have to have options. You can either either accept the returned
product, or let the customer keep the product and give them a refund. Let’s talk about returns first. [3. If not entitled to a refund, accept returns] How you handle returns depends on your return
and refund policy. Make sure customers can access this policy
on your website. Create a Return and Refund
policy page and include a link to it in your store’s header
and footer menus. Shopify has a handy refund policy generator
that allows you to make a refund policy page in minutes. I included a link to it in the description
below. [link: https://www.shopify.com/tools/policy-generator/refund] From seeing what works in successful dropshipping
stores, I suggest allowing returns within 30-60 days of delivery. Just make sure to let customers know you’ll
only accept returns in perfect condition. And where should customers send returned items? To you! Give customers either your home address or
a PO box that you rent out for your business. To refund your customer for their return,
you’ll need to log in to Shopify. Simply go to your Shopify
Orders and click on the order you’d like to refund. Below the order number will be a
refund button. You
can refund the entire order, or just a particular product. Now, it may not be practical to send the returned
product back to the supplier for a refund from the supplier. But that doesn’t mean you’ve lost a sale
entirely. You can do some really creative things with
a returned product. For example, you can use it to create product
photos for social media and ads. You can promote it in a product giveaway. Or you can just ship the product to the next
customer who orders it–in which case you make your money back. But if that sounds like a lot of work, there’s
another option. [4. If not entitled to a refund, give one anyway] If you’re not entitled to a refund from
the supplier, you can simply give your customer give one anyway. Yeah, you’ll take a loss. But you want have to hand out your address
or stockpile products at home. If your average product cost is less than
$10, this might be a simpler way to go. No matter how you handle returns and refunds,
this next hack could help you turn your customer’s frown upside down. [5. Turn a return into a returning customer] It’s entirely possible to turn a return
into a returning customer. I love this hack, because it’s something
most new dropshippers completely look over. If you handle returns and refunds politely
and professionally, you’re actually in a great position to make a new sale. Here’s how: In your Shopify admin, create
a custom discount code for 15-20% off any order. Then send your customer an email. Explain that you’ve processed the return
or refund. Then share the discount code as a token of
apology. If all goes well, they should appreciate your
professionalism and might make another purchase right then and there. Returns and refunds are part of running any
retail business. After all, The average return and refund rate
of ecommerce businesses, not just dropshipping, is around 6-8% If you try to avoid them altogether,
you’re setting yourself up for failure. Successful entrepreneurs are realistic and
find solutions to problems rather than fearing them. Good communication, a clear returns and refund
policy, and a genuine care for your customer experience will help you handle returns and
refunds like a pro. You’ve got this! And all of us here at Oberlo are available
to help. If you have any questions or doubts about
the stuff we talked about today, let’s get a conversation going. Leave me a comment and I’ll reply as soon
as I can. That’s it for me, just make sure to subscribe
so we can see each other next week. And until then, learn often, market better,
and sell more.

64 thoughts on “Dropshipping Returns: How to Handle Returns and Refunds with Oberlo

  1. I don't live in the US, and shipping from the US to my country costs around 30-50 dollars. How can I solve this problem?

  2. the email i receive for this video was saying "How much does it cost to start dropshipping in 2019?

    We crunched the numbers to find out.

    Watch this video for a realistic, line-by-line dropshipping budget. " but this video talk about refunds….

  3. *Hey…does it make any difference if the B2B clients notice that I'm dropshipping… some clients ask where the invoice will be coming from , some ask for VAT / Business Registration number , but I simply answer we are located in China….still waiting when Chinese new year holidays going to finish… 1250 orders waiting pending 😫 worth of $9000+πŸ˜•πŸ™‹πŸ™ŒβœˆπŸŒŽπŸ’–πŸ’•πŸ’ŸπŸ’πŸ˜˜

  4. Hey all! Jessica here. When handling returns, customer experience is SO important. Have you had any really good (or really bad!) return experiences at other stores? What did you learn from them?

  5. Dear Jessica, I've watched thousand of videos about dropshiping, you are the best I ever see explaining about anything, specialy dealing with comments, I saw your answer regarding some comments here and its sooo professional, MY QUESTION : how can I find a good costumer support for my store who can react like you 😁? Is there a video fulfilling this subject ? Kind regards, Elias

  6. hey i want to dropship remote control cars from aliexpress website, most of them are chinese brands will there be a problem with it..

  7. What if a buyer buys all ur product for thousands and they request a refund on everything and they ship u back rocks in the products weight instead of what u sold them? Somthing like that can bankrupt u.

  8. Hi, I am based in Australia and wondering if the customer has to return the item to me personally and they were say for example in the USA, how is the returned shipping cost handled with the customer?

  9. When dropshipping an item may take up to 25 days to arrive, what are we supposed to do then? Since 14 days will have already passed before the customer finds out that the item is defective.

  10. Thank you for this video, returns/complaints etc was one of the things that I had been unsure of , which in turn had me hesitating moving my shop forward, you have made it so simple. I love these explanatory vids so much

  11. How about when the customer dint like the product and wants to send it back, if i give my address(Which is in other country) who should bear the shipping charges?? and how can my customer do that??

  12. If i did get the current stats right, the overall return rate of fashion products are somewhat around 30% to 40% and the general return rate of any product is like 15%, way more than what was stated in this video. Now, if you have a fashion store as a shopify dropshipper, with a return rate of 30% you are going down pretty fast. I havent seen any reports from actual shops and how they deal with that. Can you clarify that please, since it looks like a fashion shop as a dropshipping business is a realy bad idea.

  13. I'm curious, in the "How to Deal With Long Shipping Times when Dropshipping," you recommend refunding if it's a low cost item and here your recommend not to. I'm trying to figure out what path to take. Do you not offer refunds or do you know of other dropshippers who don't and are customers are fine with not getting a refund?

  14. For returns, what is a good email to use instead of your personal one? Who or what should I use as a support email address?

  15. Hi I have a question. If you do refund on oberlo do you have to do it on Shopify also?and another question is who gets the refund from the supplier you or the customer?

  16. Hi! Jessica, great video. But what Shopify app do you recommend to handle return authorizations numbers so you and your customers can track a returned item?

  17. Am I right in saying that the 14 days start from the day customer physically receiving the item ? would it be the from the delivery date on the tracking information? my shipping policy on shopify auto populates 30 days return policy

  18. Great Video. though I think A lot of drop shippers are wondering this. "when putting something from Oberlo on your site, how do you know the color of product if all they show is #'S? and they only use the same photo for all the colors. The reason im stating this here is because this is a huge deal with returns, as the customer may get the wrong color. please help!

  19. Hey Jessica, Great video. Just wondering how the customers should handing returns. Let's say I am in US and customers returns a product from UK. Does he have access to epacket? Who pays for return shipping fee? Does the drop-shipper handle return label the way Amazon does? Thank you for great videos and tips

  20. What if you live in Thailand and are dropshipping via Aliexpress to the USA? Were can the customer send it to? I am just starting out so forgive me if this question isalready obvious for everyone else

  21. What if I got the product from Aliexpress and not from Oberlo? What if I just dropped my product from aliexpress to Oberlo? Would I still be able to do the dispute thing at Oberlo? If not, what should I do and where should I go?

  22. One thing that I wish Shopify/Oberlo/Aliexpress would get right is a common tracking system for packages. These days, largely thanks to Amazon, customers expect to be able to track their package and know exactly where it is and how long it will take before it reaches them at any time. Too many of the companies on Aliexpress don't do this. I've had packages disappear into thin air for weeks at a time and then resurface on the day they are actually delivered. In the meantime both me and the customer are freaking out not knowing where it is. This is especially troubling if the customer has paid for expedited shipping and it's late. Sometimes they want a refund for this. The sellers on Aliexpress are often unhelpful in this regard. So please Jessica, use your considerable charm and influence to push Oberlo to do this. There's no reason why in 2019 a customer shouldn't know at any time where their package is no matter where they live.

  23. Hey there , Jessica I've a question , like I'm from india . I've online shopify store . If customer want to return a product than which location I should provide to them because I'm not living in usa so where they can return products to me if customer wants refund ??

  24. Has the process for doing this changed in Oberlo? Under "Managed Orders" in the Oberlo app, I can't find the "3 dot buttons" to start filing a refund with the Aliexpress supplier.

  25. If the owner of the shopify is based outside US, is it a downside if the customers saw the address/where to return is not in US?

  26. Hi Jessica, this was a great tutorial, it was very helpdul to me. I am just starting my business, do you think you could be my mentor and help me with some consultations sometimes ?

  27. what about, if i am drop shipping but located in the UK, but drop shipping inside of the us with a USA supplier, then if a customer wants a refund, i dont have a USA address, then they will have to ship it internationally to the UK which will be expensive, how would you handle this issue, this is a good topic thanks

  28. Great video with valuable content. I have bookmarked this video on my Computer to review regularly….Thanks Jessica.

  29. Hi Jessica, thank u for this great video, it realy explains how to handle a return. Altough, I have a question, does this model works with Aliexpress supliers?

    Thanks in advance

  30. Hi! I have question about refund policy. If I wanna my customer return a product back to aliexpress supplier for refund or exchanging what adress I should write to my store? (Hope you got me πŸ™‚ )

  31. The supplier is contacted by Oberlo for the refund. However, the customer must send the product to you. But won't the supplier be asking for the product as well? As because they are giving the refund.

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