How to define a good returns strategy for your e-commerce

Your e-commerce returns policy is one of your most important strategic decisions. We know that defining it isn’t easy, but all digital business policies have some minimum requirements to meet at a European level, such as the right of withdrawal. 

All digital businesses that sell products or services have to deal with returns for withdrawal and it is a very common practice that all online sellers already have. But what exactly is the right of withdrawal? 

Withdrawal refunds: what are they? 

Quite simply, the right of withdrawal in the e-commerce world is quite similar to a return or to cancelling a signed contract. This is a right at European level that is provide for in the General Law for the Protection of Consumers and Users, by which: consumers can return a product or withdraw from a contract purchased online, within a minimum period of 14 calendar days, by notifying the seller and without any penalty or need to justify their decision. 

Just as users have a minimum period of 14 calendar days to exercise their right of withdrawal, the seller also has a period of 14 calendar days – from the moment the user informs of their decision to withdraw – to refund the money.

BigBuy Returns Policy 

In the case of dropshipping shipments with BigBuy, each distributor decides on the after-sales and returns policy of their business. They must, of course, give the right of withdrawal as an option. 

Being a European dropshipping supplier, all products offered in the BigBuy catalogue have a two year warranty (one in the case of reconditioned products) according to the law. In addition, we offer our distributors tools to facilitate the management of after-sales and warranties with the end customer: RMA management tool and a SAT [Tax Administration Service] in Europe for the analysis of possible items with manufacturing defects. 

Tips for managing dropshipping returns 

As we mentioned before, refunds for withdrawal are commonplace for all European e-commerce. And we have good news for you, dropshipper: it’s not as difficult as it looks! 

Here are our top tips to get started with dropshipping and manage your returns confidently. Here are a few good tips! 

Apply a clear Returns Policy in your online store

This may seem obvious, but we have noticed that this is not always the case. Poor return conditions may lead to the user abandoning their purchase. In fact, according to SendCloud’s latest e-commerce study, more than 50% of European consumers always check the returns policy before deciding to buy from an online store.

Before you start writing your returns policy, the first thing you need to do is make decisions. Here are some things you should decide on and what information customers value most when reading returns policies: 

• Who bears the costs of the return, the seller or customer? If you decide that the return costs are to be borne by your customers, the returns policy must clearly specify this, otherwise you will have to bear the costs yourself. 
• Whether the minimum period of 14 days for returns is extended. 
• What to do with defective items. Sometimes, it is better to return the money to the customer without receiving the item back, in order to avoid additional logistical costs.
• What the returns process will be like, step by step. 
• When users will receive a refund.

Opt for products that are exempt from withdrawal (cosmetics, hygiene, and other perishable goods)

If you do dropshipping – or are considering doing so – and the issue of returns is slowing you down, you can always choose to sell products for which the right of withdrawal does not apply. According to European law, these are: 

– Perishable goods. 

– Sealed items that cannot be returned once opened for hygiene or health reasons. 

– Products made to consumer specifications or clearly customised

– Transport tickets, tickets, reservations, etc. for specific dates. 

Choose categories with a low return ratio

Another option to try to minimise the impact of returns is to choose product categories that have a low return rate. This leaves out the fashion and accessories market, for example, which is one of the categories with the highest return rate (58%) due to dissatisfaction and size. 

Returning to the SendCloud e-commerce study, the categories that European online shoppers return the least are usually: 

• Toys, games and video games 
• Products for Pets 
• Entertainment 

Start with small products 

Not having to invest in logistics and warehousing is one of the main advantages of dropshipping, so large products – such as furniture, appliances, etc. – are not a good idea to start with, as managing and storing returns without a physical warehouse can be a problem. 

At BigBuy we do not repurchase the merchandise of dropshipping returns from our customers, although we do help manage orders with incidents or defective items from the factory, with a free pick-up service.

How to resell returned products

This is one of the big questions within dropshipping. If you want to re-stock those products that have been returned – and they are in perfect condition – just apply some marketing techniques. 

Some ideas that come to mind are: create an outlet feature within your e-commerce or marketplace, open an additional channel just for these offers or launch a limited offer to generate a sense of urgency. If, for example, the products have small defects, you can also create a reconditioned section in your e-commerce.

In any case, you would have to assume the shipping management as a seller, since BigBuy can no longer participate in this process. 

Conclusion: how to effectively manage your online dropshipping store returns 

As we have seen throughout this article, returns are a common issue that most professionals in the sector have to deal with. That is why it is important to learn how to prepare and manage them from the beginning. 

The most important things you need to focus on to manage your returns policy are: 

• All customers have a period of 14 days to exercise their right of withdrawal and proceed to return the items. As a seller, you can extend the deadline but never make it shorter. This is a law that is enforced at European level.
• You also have 14 days to return the amount paid. These 14 days start from the moment the user informs you of their decision to return the product.
• It is important to have a clear returns and exchanges policy and, contrary to what many people believe, it is one of the most important pieces of information in an online store. For more than half of European users, the information on them is decisive in deciding whether or not to make a purchase. 
• If you don’t want to deal with the hassle of returns, opt for products for which the right of withdrawal does not apply, such as: cosmetics, toiletries, perishables, etc. You can also do dropshipping with products with a low percentage of returns, such as entertainment, pet accessories, etc. 
• If you’re just getting started, don’t do dropshipping with oversized products. As there is no warehouse, it is complex to handle returns.
• Try to resell your returned items. You can create offers, an outlet area and even a reconditioned section.