A new supplier is saying that they will only accept returns if there is damage or if the wrong item has been delivered. Where does this leave me if the customer returns due to a 'change of mind'?
All suppliers should be fine with returns due to damage in transit, faulty item or wrong item being sent out, so you're covered on all of those.
Most good suppliers will be ok with returns (if an item is unused), however some may charge a restocking fee. One option would be to mirror that in your own returns policy for that particular brand and also charge a restocking fee to customers if an item is returned due to "change of mind".
So on that brand, it's up to you on whether you think the sales you could generate by working with them would outweigh the hassle of having to accept any change of mind returns back to a parcel forwarding centre and then potentially listing them on your site as "as new" or "ex-display" or even selling them on eBay or gumtree.