November 4, 2018

Shopify Returns: How to Handle Returns and Disputes

How to predict Shopify returns and minimize them? How to deal with disputes not to lose customers? What emails to send?
First, keep in mind that returns are a normal deal in ecommerce. Look also at the screenshots of those dropshippers who share their sales on Facebook groups, you may see there are thousands of dollars of returns. So, be ready. What you can do is to include an amount of money into your selling prices.
Shopify Returns
Return rates in retail and ecommerce. Source: Shopify
Returns and disputes are especially normal when you sell cheap Chinese products at the very beginning when you start your dropshipping business. They may have low quality.

How to Minimize Returns & Get More Satisfied Customers

Learn the reasons why your customers may wish for a refund or a return and make sure you minimize these possibilities. Here are 5 typical reasons of refunds and returns and things you have to do to prevent them.

1. Make shipping times extremely clear to let shoppers know how long the shipping time is going to be. Consumers may complain that shipping takes too long, here are the steps you can make:

  • Make sure you put it in the description. For instance, the text you may add to the product page: "Shipping is expected to take 2-4 weeks from our Asian (or European) Distribution Center"
  • You may also include a message that the product is on high demand in the "Order confirmation" email. Go to "Notification" section in the Settings and edit the email body:
Shopify Returns
  • Install a free Shopify app Aftership that helps consumers to track orders online in your store:
Shopify Returns
  • Don't ship to countries that ePacket doesn't support
2. Very easy to follow sizing guide. Customers may order a wrong size. Take a sizing chart from your supplier on Dropwow or other product sources you use and make sure it's super easy to read and helps people to choose the appropriate size for them.

3. Provide a description and upload pictures of the products you actually sell. People expect to get one product they see online and when description or images do not match the real products, shoppers get disappointed. Be sure you upload images and give descriptions of not similar but the products you actually sell.

4. Import products from reliable suppliers with high ratings. This way you prevent disputes and returns when products may arrive with defectives, damaged or consumers don't like quality.

5. Provide solid customer support. It is the last step to minimize people who ask for returns and refunds. Read below the examples of emails to send.

As you sell things online, you're going eventually to deal with refunds. It's just a part of doing business. What you should do is to make your customers happy.

How to Deal with Refund and Returns

1. When something is physically wrong with the item: File a dispute or ask for a refund from your supplier. Tell them that you received a damaged item. See how you can get your money back. You will be able to make a refund to your customer with this money.

2. When a customer is not satisfied with the product look in comparison with the color/material or else he or she expected in the online version: In this case a customer doesn't necessarily need a refund, however, you may use this situation to turn dissatisfaction into satisfaction providing solid customer service. For instance, an email you may send:

"I'm sorry for the difference in color, it could sometimes be due to the differences in screen pixelation or color display. We would definitely like to send you out a free …. [name a present here, jewelry may be a good choice], if you're interested.

Let me know and I'll personally send you out our new … [name a present here] that is coming out within the next month."

Your consumers are going to feel special as they should do. Then find the product you wish to be sent as a present. Be sure it has the highest rating and relatively fast delivery. Jewelry may be a good choice here, as it has very low wholesale prices for dropshippers. It means you will spend max $5 and save $20-50 which you may potentially refund.

3. When the order is lost in transit and a customer is not satisfied with the absence of the possibility to track shipping: In a situation like this, you may still provide good service, for instance, this way:

"It looks like it's shipped out on …. [shipping date] but for some reason, tracking stopped after that. There is a chance it will still arrive, however, I'll still go ahead and refund you.

Sorry for this. It seems to be the fault of the shipping company. Nonetheless, I'll refund your order."
Remember to calculate each refund as a loss in your bookkeeping. As all the losses should be included in your selling prices. Check out the pricing calculator for a dropshipping business.
4. When a customer requests for a refund for a low or mid-ticket product: When consumers complain too much you may let them keep the product and give them money back. Or, you may offer them to keep the product and send another one for free. In both cases, you won't lose much as your wholesale prices are not so high.

Customers expect free return shipping nowadays. If you dropship products that are shipped from China, a product return to a supplier may be expensive so neither you nor your customer would like to cover shipping costs.

You may request for images from your customers to get confirmation that something is wrong with the product. However, if you sell low ticket products, you may simply believe your customers without leaving their words in serious doubt.

How to send another product for free:
  • Go to Shopify to create a new order in Admin
  • Mark it as prepaid
  • Then fulfill the order as you normally do.

For those who wish to go above and beyond the situation, offer a full refund and ship a new item as a replacement. This allows you to build a long-last relationship and this approach will let you stand out of the crowd and cause WOW effect.
5. When a customer requests for a refund for a high ticket product:

  • Get a product to the warehouse of your supplier, if you cooperate with US suppliers
  • If you live outside the country you market to, use a virtual address from Viabox for instance.
Shopify Returns
Or, use AfterShip Returns Center app with 14-day free trial
Shopify Returns
  • If you live in the country you market to, you may use your P.O. box to get products.

I'm not sure how you like the idea of collecting stuff. Some dropshipping stores do it especially at the beginning to get their own experience with returns. However, there are at least 2 benefits of this situation for you:
  1. Use the returned product for a photo shoot or video creation
  2. Make giveaways on your Instagram/Facebook page

For those who wish to automate the return process, install Return Magic Shopify app to get an automated return solution. It has a 30-day free trial.
For those who use PayPal and don't want to lose it especially before or during Black Friday and Cyber Monday: when people complain to PayPal, it's better to refund right away not to have any troubles with the payment provider.
How to Make Refunds in Shopify Store
  • Go to "Orders" in Shopify Admin panel
  • Find the order you wish to refund
  • Hit "Refund items" button
Shopify Returns
  • You may refund the shipping amount in the "Shipping" field
  • You may enter a reason for a refund if needed
  • "Send a notification to the customer" is ticked by default, you may untick it when needed

  • Click "Refund" to finish

Provide a free discount code for their next order: Go to the "Order refund" template email in "Notification" section and mention info about an exclusive coupon code. In this case, you won't have to send it manually yourself. Create a triggered email with a discount code remind together with product ideas.
Solid Customer Service
Let your customers have a good experience with you. You should treat them really well as they may tell others how embarrassing was their experience with your store. According to the statistics, 95% of respondents said they usually tell at least one other person about bad customer experiences with a company, while 54% said they share it with at least 5 other people.

In addition, happy customers may come back and buy something else. As they feel that you respect them treating them well.

Even if you send a replacement for free and purchasing a new item eats your margin, you have more chances to return your customers via retargeting emails and this way of retargeting will cost you nothing. Learn the proven email marketing strategy with the ready email sequence that works.

People may be pissed off when they are embarrassed. You should still be respectful.
Refund Policy in Shopify Store
It's super important to have a Refund Policy. How to make the Refund Policy and pull it out:

  • Go to "Legal" in "Settings" Here Shopify offers dropshipping stores a general refund policy. You may customize it
Shopify Returns
  • When it's ready, go to "Pages" in "Online store" to create a page for your website

  • Then go to "Navigation" to add it to the "Footer menu"
Shopify Returns
Your return policy should be strict and detailed. However, don't make your return policy too strict. According to the study, 66 percent of customers say they check return policies before making a purchase. Your return policy should not reduce conversion.
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Content Creator at Dropwow
Gulnur Ismailova
Content Creator at Dropwow