So now it's time to start talking about returns and refunds.
Not the most exciting subject I know, but it is essential because it is simply part of doing business
as an e-commerce store owner.
At some point you are going to have to deal with this.
But please don't worry because typically we count on about a 1 to 2% refund rate, so it's by no means
enormous.
So what are the most common reasons for returns or refunds?
Well, in no particular order, they are simply don't like the product.
It's broken.
Not what they ordered and it never arrived.
Now of those four, we can certainly manage two of them quite well.
So when it comes to the product being broken, you will remember the golden rules.
And I said, do not ship fragile products.
So if you don't ship fragile products, it's likely that you shouldn't get too many returns or refunds
based on the fact that the product is broken.
And then when it comes to the product having never arrived, let's not forget you are tracking the products,
which of course doesn't mean it guarantees delivery, but at least you can see exactly where the product
is.
Now, of those four, I would say that number three is the least common, not what they ordered, because
at the end of the day, they're ordering from an e-commerce site.
It's pretty difficult for somebody to say, well, that's not what I ordered, when in fact we can see
that that was exactly what they ordered.
But of course, if they simply don't like the product, then there's really not an awful lot we can
do about that.
But in any case, what we need is a refund policy.
And that refund policy, and this is really important, should work with the customer, not against
the customer.
Don't forget, the customer is always right.
Okay.
So with all that in mind, let's head back to the policies.
So coming down to settings and then scrolling down towards the bottom here I click on policies.
Now I'm sure you remember many lectures ago we set up the privacy policy and the terms of service.
And at that time I said later on in the course we will create the refund policy.
So of course that time is now.
And so clicking into the refund policy, you can see that the text is currently blank, and it would
seem that the obvious thing to do is to simply click on Insert Template in order to insert a ready made
return and refund policy.
But in fact, this is not a great refund policy for us.
And the reason for that is because this refund policy is not ideal for dropshipping.
It is a very generic policy that could work for any business, and in particular larger businesses where
they perhaps have warehouses where they can receive return products and teams of people to deal with
those returns.
Because one thing I want you to clearly understand is that returns and refunds can take an awful lot
of time.
First of all, you've got to enter into discussion with the customer.
Then you've got to ask them to send back that product and track its return.
Once you've then received the product, you might then need to go back to the supplier to open a dispute
with them.
You may then also need to resend a replacement product back to the customer.
And of course you'll need to make the refund itself.
I think you can clearly see how much time that could take.
Now keep in mind, as I just showed you on the last slide, only 1 to 2% of sales can result in refunds.
So if you spend an awful lot of time doing returns and refunds, it's disproportionate.
It doesn't make sense.
Your time could be way better spent elsewhere developing your business.
And it's therefore for that reason that we put together a very different looking return policy for dropshipping,
which might surprise you.
And this is what that refund policy looks like.
Instead of returning items, you can contact us for a full refund.
Why returns run counter to our emphasis on sustainability, as every return has a carbon footprint.
To be eligible for a full refund, please send us a picture of the item to info at.
And then of course your shop would be your domain.com.
After that, you can either keep the item or you might want to donate it.
Now.
At first sight that might seem a little bit crazy, but if you step back and think about it, it has
huge advantages.
First of all, this is a very customer friendly returns and refund policy.
You are never going to get into a dispute with your customer with this in place, which can only have
a very positive implications for your customer service and the overall credibility and reputation of
your store.
Secondly, we are not asking them to return the product, which means we are not potentially spending
a large amount of time dealing with the whole refund and return process, which, as I just pointed
out, can be incredibly time consuming.
Now, although we're asking them not to return the product, of course we are offering a refund.
We can still give them back their money, and that process is very quick and simple as I'll show you
in a moment.
So sometimes what happens when I show this to students is they say, well, surely this is open for
abuse.
Somebody could buy a product from our store, make a complaint and then they get to keep it.
Plus we could give them a full refund.
They have effectively got something from our store for free.
Now, there's no denying theoretically at least, that that could happen.
But in the many years that we've been using this returns policy, We have never seen that kind of abuse.
But even if that were to happen, yes, we would lose money.
But compared to the amount of time and money required to manage a full returns and refunds policy,
it is absolutely minuscule.
So, in short, the overall objective here is to have a very customer friendly returns and refund policy
that hardly occupies any of our time at all, so that we can spend our time building the sales and profitability
of our business, which of course is our primary objective.
Now, I want to make it clear that you're also not obliged, of course, to use this refund policy,
but I strongly suggest that you do so.
And so of course, that's what I'm going to do.
I'm going to take out all of this text and then replace it with my chosen refund policy.
And just in case you're thinking I'd rather not type out all of that text, I have good news because
in the resources section for this lecture, you're going to see a PDF with this text included.
And so all you need to do is to copy and paste it.
And then with that done all I need to do is to click on publish.
I'll then come out of the settings and then open up the store itself, because you will remember that
we put the other policies down at the bottom here, the privacy policy and the terms of service.
But because our refund policy is so customer friendly, in my opinion, rather than putting it at the
bottom with the other policies, it's better to include it here under the customer service menu.
So let me do that.
Heading back to admin, going to the online store and navigation.
We'll go to the main menu.
And then here under customer service I can add a new menu item, which of course I'm going to call the
refund policy.
And then I will link it to the refund policy itself.
So clicking on refund policy and then on add I can save this.
And then let me go back to the store and refresh.
And now when I open up the customer service menu here is the refund policy.
And so now the only thing left to do is to actually make the refund itself.
And to do that you're going to see that it's very straightforward.
If I go back to admin where you see that I'm already on one of my orders, if I wanted to refund this,
then I would simply come up here and click on refund.
You then see this little warning.
It says once an item is refunded, you can't start a return for it.
To return an item, create a return first and then process the refund.
Well, of course this doesn't apply because we're not asking the customer to return it.
And so all we need to do is to come up here, make this a one.
You can choose to restock the item if you wish, and you may want to include a reason for the refund,
but otherwise you can now see that the refund total is 29.95.
And therefore all I need to do is to click on the refund button itself.
And after that, the payment provider, in this case PayPal express is going to take care of actually
making the refund to the customer.
There is nothing more for you to do.
And with all that in place, not only do you now know how to actually make the refund itself, but you
have also created what I hope you would agree is a fantastic refund policy.