Handling Returns

Returns are a fact of life when you drop ship on behalf of a retailer. The main considerations are: how to communicate with your trading partner, how to deal with inventory coming back and what to do about payment. This guide walks through each of those areas and discusses best practice.

Identifying Returns

Returns are initiated in most cases by the consumer. When this happens, they will get in touch with the retailer they bought the product from, your trading partner. They may be returning other items from other suppliers at the same time or not, the key thing is whether one of your products is being returned.

Handling Returns

Once this is established, the retailer needs to refund the consumer according to their policy, you need to refund the retailer (this can be done in your gateway account ie. Stripe) and you need to receive the products back at your address, where they were originally shipped from.

Payment

  • Your retailer can issue a refund to the consumer for the returned item through their payment gateway.
  • You can either issue a credit or a refund to the retailer, depending on your own return policy.
  • Generally we see people offer a credit through their payment gateway for a returned product.

Inventory

  • Your retailer will share your warehouse address with the consumer
  • The return will arrive at the warehouse, and you can decide whether to sell or scrap the product
  • If you decide to resell it, you will need to enter the inventory
  • Convictional will share the updated inventory with all your trading partners

Policy

A typical return policy for a drop ship supplier might be:

  • Products can be returned to the warehouse within 30 days
  • A credit will be offered to the retailer in exchange
  • The consumer pays shipping back to the warehouse
  • The product does not have to be in original packaging

Conclusion

How you handle returns is ultimately up to you as a business. Convictional generally helps by sharing updated inventory with your partners when it happens and you bring it back into stock. The payment side goes through your gateway, and the communication with the customer is handled typically by the retailer.

It is a good idea when establishing drop shipping relationships to share your returns policy with each trading partner. This can be part of your onboarding process, when you set pricing and get connected.