How To Deal With Wholesale Dropship Product Returns

When getting started with a dropshipping business or dropshipping on eBay and Amazon and other marketplaces, some new dropship resellers ask, “How will I deal with dropship product returns from a customer?” It is mostly up to you as the store owner for how you want to deal with your own returns process, but there are several things to consider.

As the store owner and dropship product reseller there are three basic approaches for the returns.  The first option of course is to say all sales are final and no returns are allowed.  The second option is to allow some returns to be sent back to the whole sale supplier directly.  The third is to have your customer send the product to you direct, and then for you to submit it back to the wholesale supplier.

All Wholesale Dropship Sales Are Final-

While this is a valid option, and one taken by many wholesale dropship resellers, it is not an ideal choice.  It makes it more difficult to establish trust with your customer base if they feel there is no option for a return.  You do not have to be as accepting as some retail stores that take returns for any reason in 30 or 60 days or as long as it is not opened, but you might still want to allow a few rare returns.  The most significant reason for allowing a return is if the wrong item is shipped or damaged.  If you ordered the wrong SKU that did not match the customer order, then you should allow the return options since this was not a customer error.  Another issue might be that your wholesale supplier sent the wrong product to your customer.  Again, its not the customers fault, and once you point out to the wholesale supplier that they shipped the wrong item, they should be able to make amends and resolve the issue for you.  If the item is damaged this could be something that the shipping companies helps cover or something the supplier might resolve for your customer.

While it is perfectly fine to sale that all sales are final.  There are some cases where you might want to allow for some flexibility in your returns process.

Allowing Wholesale Dropship Returns Directly
The most common return option is to allow returns and many resellers have the products go back to the wholesale supplier directly.  However, before posting this friendly shopping option for your returns, the first step is to check with the returns policy at your supplier to see what they allow.   Some suppliers might only allow returns for certain product categories or if the item is the wrong item or damaged.  You do not want your customers to just pack up the item and ship it back to the supplier, if the supplier does not allow that type of return.  The issue is the supplier wont want to ship the item twice.  The customer will be out of the item.  And, you will be left to figure out a solution.  So, do not just post a return address for people to use on their own.  You should match the supplier’s policy closely and if people want to submit a return it would be best to have them contact you for approval and only then send them the return details to have more control over the process.

Typically, the wholesale suppliers have a similar process for this.  You as the dropship product reseller will need to tell the wholesale supplier why an item is being requested for a return.  If approved they will send you what is called a “Return Authorization” which is a return code showing the returns department that it is an approved return so you can submit it without issue and have it adjusted on your account.  You will need to provide this code to your customer to make sure they send it back with the item.

Some resellers are worried that their customer will discover the product source.  Most suppliers let you submit a generic return without their name like:
Attn: Returns Department
RA# 1234AABA47
60 Dropship Ave
Atlantic Beach, FL 32233

With this option you can just let you customer know this is the address of your fulfillment returns department and provide the details for them to use and they will not feel like they are shipping the products off to some company other then your business.

Directly Controlling The Wholesale Product Return Process
Some resellers prefer to have the returns come to them first.  It is not an approach you have to follow, but if the product is more expensive I would recommend this approach.   It gives you the store owner more direct control.  While there might be more shipping costs for this option, it allows the store owner to control the process more and inspect the product as well before having it sent to the supplier.  If the item is a $30 item it is likely fine to have it shipped back directly to the wholesale supplier, but if you are having a person send in a $1000 laptop, you might want to check it yourself and get it to the supplier directly.  With either approach you should only allow returns from the client that come with a tracking code so they can just say “Well I sent it, I don’t know why its not there.”  As long as you have some way to verify the item is shipped and can be tracked, you should be fine still allowing the product to go to the supplier directly.  If you do want it shipped back to you first, then you might want to add a “restocking fee” for a return to help cover some of the shipping costs.

Final Thoughts On Wholesale Dropship Product Returns
Each option listed above is fine.  We have dropship reseller members who have used each one of these approaches and been happy with their decisions.  While you have flexibility in creating the approach that makes sense for you based on your needs and the products you sell, the most important thing is to review the policy of your supplier and be more conservative.

If the supplier allows returns within 30 days, we recommend you make your return policy more restrictive, such as saying returns are allowed within 20 or 25 days.  This will give you more time for any issue with a shipping delay or make up for the processing times to avoid any issue dealing with a late return from your customer.  If they have a restock or return fee then you should apply something similar to make sure it does not cut into your margins.  Some resellers might even add a restocking fee just to cut down on people seeking a return.  If your supplier has any restrictions on returns, such as if the box is opened or because of the category for the item (a wholesale supplier might not allow returns on lingerie or swimwear or fragrances, etc), then you must list a similar level of detail to make sure you are not stuck in the middle between some issue with a customer feeling they are allowed to return an item and your supplier saying they will not accept it for some reason.

If you have more then one supplier, then just make sure you combine the restrictions into a clear and detailed policy for your site combining any restrictions from each supplier for your policy.  If one supplier is more restrictive on the returns process then the other, rather then create too many exceptions in your own return policy, you might just want to match more closely to the more restrictive supplier to keep return expectations simple for your own customers.  A short and clear policy of what items can be returns, why they can be returned, and how long they have to process that returned will allow you to effectively manage the process for your customers.

  • Do not be afraid to allow returns.  It is not a very common process, but it can happen, especially if your supplier ships out the wrong item in error. 
  • We would recommend that you review the policy of your supplier.  If you have more then one supplier combine their restrictions into a clearly defined policy.
  • Match the wholesaler’s policy in detail for your own website, but be a little more restrictive or conservative on how long someone has to return an item, just to make sure you don’t have an issue with a shipping delay.
  • Do not post the return address directly on your policy page.  Make sure the customer contacts you first so you can understand the reason for the return and if it is a valid return you can send them the address, RA number, or any next steps based on the feed back from your wholesale dropship supplier’s recommendation.
  • If a return is allowed only accept a return process that has a tracking code provided by your customer.  If they cannot provide a valid code, then it should be your policy that it will nullify the return if the package does not arrive.
  • If the item is a very expensive item, you might prefer to have the customer ship the product to you first (another reason to allow for a more restrictive returns time-line).  This lets you have the most direct control over the process.  You can inspect the item and follow up with the customer again or the supplier directly to resolve any issues while you are holding the product.  You might be able to recoup some of the cost in shipping the item by adding some re-stocking fee, but even if you have to pay for the additional shipping costs with this approach, it might be better to control the process for some items over $1,000 for example to make sure it processes as needed even if that adds another $10 to your costs in the process.
  • Returns rarely happen, but as long as you give a few minutes to layout your shipping and returns policy for your website, it will safe you a lot of time and headaches if a customer ever does need to request a wholesale dropship product return.

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