I'm not open for business yet but I plan on selling knobs and pulls for home cabinetry. Most orders will be in the $50 - $200 range.
These products will lend themselves to being shipped via USPS given their small size and fairly light weight, but my concern lays in shipping something of that value without documentation that it was in fact received.
What's to stop a customer from claiming he never received the goods? Am I being paranoid or is this a legitimate issue for concern?
How do you folks handle this?
There is no sure answer for every store, it all depends on your profit margins and whether or not you can afford to absorb, or it is likely you can increase your product/shipping cost to incorporate a 'signed-for' delivery method.
From my experience, in the UK anyway, that most stores operate a risk factor - in that if a product costs £5 and they sell for £10 but signed-for delivery will cost £2. Less taxes, they are likely to make somewhere in the region of £3. Is it then worth their risk to ship by a non-recorded method, to increase their profit to £4 on the basis that 1 in X customers will be dishonest (or as is fairly common, Royal Mail really did lose it)? Provided similar profit margins are held throughout the store, the signed-for method comes less a risk to maintain a healthy profit margin. You'd be mad to send $50-$200 products without a signed-for delivery method being used, how you incorporate this, is down to your overhead costs.
For a while, 'Free Delivery' became the norm. Most of the 'big guns' offered free shipping, and a lot of smaller online retailers followed suit. In the past couple of years, a lot of the 'big guns' are moving to a yearly shipping subscription. In the UK, both Amazon and Asos have done this for quite some time now. Charge customers a yearly subscription of £XX for free next day delivery. Some you'll make money from because they only order once or twice, others, you'll lose. All depends on your product cost, retail price and cost of your business overheads.
@ Stellar, I have been thinking of sending “non signed for” royal mail for a while now for some of our items.
So I would offer 2 delivery options for Royal Mail for our lighter weight items,
Royal mail ( in an envelope and through your letterbox plain and simple) but as above , open to tight wads who want something for free.
and
Royal mail “signed for” knock on the door
I have been looking around to check if it is viable or acceptable to put the onus on the customer, with a condition that they can choose the cheaper “non signed for” option if they accept that we will not replace for free if it doesnt get there as long as we have proof of postage, but I cant find any info on it. Any one else doing this or have any legislation on this in UK
John
It is the retailers responsibility to ensure delivery of the item. The customer is protected under Distance Selling Regulations in this circumstance in the UK. Since the DSR is EU legislation, I would expect the same principles apply across the EU.
Even if you did add something to your terms to say it's the customers responsibility, Trading Standards will almost always swing the other way. You've got to look at the potential harm it could do your business in terms of negative reviews on the web and loss of repeat customers, that is if you choose to stand your ground on a “not received” item. Will your minimal profit increase bring you more financial benefit than losing the sale (and stock item plus delivery cost) of a “not received” order? Or will you sleep better at night with a minimally lower profit margin without the hassle of knowing you've got to deal with RM the next day as well as lose the sale and goods?
If you obtain Proof of Postage, this will allow you, the retailer, to file a claim against Royal Mail for non-delivery. In my experience, retailers rarely get compensated for this - and the hassle of filling in forms and supplying additional details - so it's a waste of time trying. It always falls down to some excuse along the lines of “We checked with the local delivery office and their staff member distinctly remembers delivering this parcel on this date. You should consider our signed-for services in future”. Who are you to say RM didn't even bother investigating, or the customer isn't being honest.
Another thing you've got to take into consideration is chargebacks. With no proof of delivery, I'm yet to see a single chargeback going in the retailers favour. Although you might only get 1 in 1000 orders, will that 1 order lose you more or less than the cost of sending hassle free signed-for delivery?
[quote name='johnbol1' timestamp='1361026894' post='155550']
I have been looking around to check if it is viable or acceptable to put the onus on the customer, with a condition that they can choose the cheaper “non signed for” option if they accept that we will not replace for free if it doesnt get there as long as we have proof of postage, but I cant find any info on it. Any one else doing this or have any legislation on this in UK
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In this instance, I believe you cannot make the customer pay for the goods again, but you can make the customer pay for re-delivery. If the customer claims they never received the item, the onus is on you, the retailer, to fulfill the contract by way of delivering the items paid for or refunding within 30 days of the customer requesting to cancel the order, which must be done within 7 days from the date of delivery. Notice the legal loop hole here?!
Also, another major loophole. You dispatch February 1st. Customer receives February 2nd. Customer requests cancellation and refund of a non-perishable item within 7 days, you must oblige. From the date of their cancellation request, the retailer has 30 days to issue a refund. There is no legal framework for the time period in which the customer returns the item, but it must be returned in a resellable condition. You then must refund by March 4th (30 days), but the customer can then return it after the 30th day in any condition and now the onus is on the retailer to take action against the customer for not returning the item in a resellable condition.
[quote name='MFD' timestamp='1361016894' post='155538']
I'm not open for business yet but I plan on selling knobs and pulls for home cabinetry. Most orders will be in the $50 - $200 range.
These products will lend themselves to being shipped via USPS given their small size and fairly light weight, but my concern lays in shipping something of that value without documentation that it was in fact received.
What's to stop a customer from claiming he never received the goods? Am I being paranoid or is this a legitimate issue for concern?
How do you folks handle this?
[/quote]
Michael,
Based upon your product line, customer base, & local, I would focus almost entirely on USPS Priority Mail shipments & heavily utilize the Small Flat Rate Box, Regional Rate A, & Regional Rate B packages in your mix. I would Insure every shipment by adding a $1.00 flat fee (your actual cost for insurance will typically be approx. 80-90 cents from your descriptions) on top of my realtime rates returned from USPS, and this would not be an optional choice for our customers. Through your Endicia or Stamps.com postal account, your Priority Mail shipments will include “Delivery Confirmation” which although not as beneficial as “Signature Delivery” in proving a disputed delivery, I am quite certain you will find this sufficient over the long haul.
Thanks for the responses guys. Struck, your input was especially helpful. Charging the mandatory fee for insurance seems to solve a lot of problems.
As a matter of curiosity though, I wonder what percentage of sales that you guys ship via USPS wind up as “claiming undelivered”?
Now that I think of it, just about everything I've ever bought from Amazon has been sent via that means.
[quote][color=#282828][font=arial, verdana, tahoma, sans-serif]As a matter of curiosity though, I wonder what percentage of sales that you guys ship via USPS wind up as “claiming undelivered”?[/font][/color][/quote] I would say right around .0001%, considered negligible! 
[quote][color=#282828][font=arial, verdana, tahoma, sans-serif]Struck, your input was especially helpful.[/font][/color][/quote]
Most likely because the other guys are from Great Britain, and everything has a touch of royalty sprinkled on top! 
We are actually having an addon developed now that will drop down a couple of radio boxes when selecting the shipping method. There will be an option for the user to choose; No signature required or Signature required with an additional fee. There will be a disclaimer for the no signature required releasing liability so the customer cannot claim undelivered.
[quote name='idslamyou' timestamp='1361224416' post='155727']
We are actually having an addon developed now that will drop down a couple of radio boxes when selecting the shipping method. There will be an option for the user to choose; No signature required or Signature required with an additional fee. There will be a disclaimer for the no signature required releasing liability so the customer cannot claim undelivered.
[/quote]
Depending on what countries you fulfill orders to, you could be in breach of law, certainly in the EU you would be in breach of Distance Selling Regulations (UK law, however, it derives from EU laws). Personally I would take legal advice before making this one of my shipping terms. I do agree it's a good idea from a retailers point of view, but may cost you in the end.
[quote name='StellarBytes' timestamp='1361227842' post='155730']
Also, another major loophole. You dispatch February 1st. Customer receives February 2nd. Customer requests cancellation and refund of a non-perishable item within 7 days, you must oblige. From the date of their cancellation request, the retailer has 30 days to issue a refund. There is no legal framework for the time period in which the customer returns the item, but it must be returned in a resellable condition. You then must refund by March 4th (30 days), but the customer can then return it after the 30th day in any condition and now the onus is on the retailer to take action against the customer for not returning the item in a resellable condition.
[/quote]
So you are telling me that in Europe they require you to have a 30 day return policy? That is absurd. The government sets your return/cancellation policy for you? On a couple of our sites, we don't allow any returns because the items are made to order. I highly doubt we will be breaking any US laws with the addon.
Us Americans find this all rather confusing!
[quote name='idslamyou' timestamp='1361237393' post='155746']
So you are telling me that in Europe they require you to have a 30 day return policy? That is absurd. The government sets your return/cancellation policy for you? On a couple of our sites, we don't allow any returns because the items are made to order. I highly doubt we will be breaking any US laws with the addon.
[/quote]
A customer can request cancellation/refund within 7 days of the item being delivered. The retailer then must provide a refund within 30 days of the cancellation request. There is currently no legal guideline for the amount of time the customer has to return the item - only that the retailer must refund within 30 days. Yes, that does indeed mean a customer could cancel, we have to refund within 30 days, and they return it any time after and there's nothing the retailer can do about it, unless the item is received back in a “non-resellable” condition, even then, the hassle caused to retailers to make the customer pay for the item, unless it's several £XXXX's worth of goods, wouldn't be worthwhile. Made to order and perishable goods are exempt from these rules, however, there are no set guidelines to what exactly is 'made to order'. If I sell a bed, that was manufactured 6 months ago in the Middle East, wasn't that “made to order”? The system is so full of flaws, you've got to wonder who made them up…corrupt politicians, that's who.
[quote][color=#282828][font=arial, verdana, tahoma, sans-serif]If I sell a bed, that was manufactured 6 months ago in the Middle East, wasn't that “made to order”?[/font][/color][/quote]
Only if you accepted the order for this bed 6 Months ago…