Customer service question

[John Loftis]

HI folks, sorry I've been AWOL. We've been busy (new website, new e-commerce platform, new shipping platform, 3 kids trying to do virtual school, and lots of orders to make).

I wanted to get your thoughts on an issue that pops up a couple times a year. I make and ship an order, UPS or FedEx marks it as 'delivered,' and the customer subsequently reaches out to tell me they didn't receive it. Could be delivered to the wrong address, could be porch pirates, or something else. FedEx and UPS cover a maximum of $100 unless I buy extra insurance. Extra insurance is somewhat expensive and I typically don't buy it unless the order itself is unusually high.

Do you think I should assume financial responsibility for the missing package? Is it the seller/shipper's responsibility for the customer to RECEIVE the item, or only to SHIP the item? I try to apply the Golden Rule in my business, but the 'right' thing to do here is a little less clear to me.

What do you guys think?

 

[Matus]

That is not an easy question. One possibility would be to include the extra cost for full insurance coverage in the cost of the product. Or - if such possibility exists - requite a sign-on-delivery (something like that exists here in DE and does not cost much). Accepting responsibility for receiving of the package sounds like the right thing to do, but if that should cost you too much money you need to reflect it in your business strategy either via the more expensive shipping, or by slightly raising the cost of the product so that it averages out in the end. Third option would be to let the customer decide whether he/she wants to pay for a full coverage and make it clear that if they cheap out, than they will bear the cost in the case the package does not make it to their doorstep.

 

[ma_sha1]

IMHO, You are responsible for item delivered. The expectation is really not up to you, it’s defined by leading e-commerce giants eBay/PayPal, as well as credit card protection.

You can go against it, but risking pissed off customers. In a dispute, they’ll likely get their money back via PayPal or credit card anyways.

 

[MarcelNL]

Agree with the two previous posters, in the long run the fuzz around who is responsible is not worth it, neither your time nor the fact that it likely is more damaging to your business than creating transparency from the start.
Sign on delivery for me as entrepeneur would be the minimum, although you'd be surprised what couriers accept...go find 'Joe' who apparently signed off for receipt in a place where more than a few hundred people work....

Why not simply add insurance over an x amount and allow the customer to decide NOT to take that coverage by explicitly accepting the risk at a reduction of the cost of insurance? But do check how Paypal and the likes would handle that in case of a dispute, they are quick to decide against the seller!

 

[esoo]

Sign on Delivery is really the only option but drivers will fake that if it suits them. This however does possibly put the customer out as they have to potentially make a pick-up at depot.

As a customer, I've always preferred sign-on-delivery, as that was I know I'll get the package.

 

[John Loftis]

Thanks for the feedback. I've always eaten the cost in the past; I just wasn't sure if I should be doing that or not.

 

[MarcelNL]

Most companies that 'eat' the cost simply include it in the price without transparency, some even do not deduct S&H when picking up, for me it is cleaner to be transparent about the cost and offer to subtract at the risk of the customer. Again, DO check with Paypal and the likes how that works out!

 

[M1k3]

Eating the cost is better customer service. It also eats a bit at your bottom line.

I'd say as a non-business owner, if you can afford to eat that cost, then good on you. If you can't, try to pass on as little cost to the customer while staying in business.

 

[parbaked]

You might consider using PayPal as your merchant or at least adding as an option.

PayPal offers seller protection as long as you it's an eligible transaction meaning shipped to the buyer's registered PayPal address with tracking. Signature is required for items over $750.

PayPal Seller Protection for Merchants – PayPal US

Our transaction monitoring and fraud protection tools better protect your business from online fraud and help reduce chargeback losses.

www.paypal.com

 

[Bensbites]

as someone who rehandles knives I ship a few. I basically insist the client pays return shipping costs for fully insured items.
This week was the first time I had a close call. The package was marked as delivered on Friday, it was actually delivered Monday. By lunch on Monday I was already planning on how to make things right.

 

[ModRQC]

Most businesses would use the risk assessment vs. typical cost per case to adjust. It's pretty simple especially when you mention "a couple of times in a year". Losing 500$ vs insuring 50K of sales for example. If it is more expensive to insure each order, then there is the case to up the prices, but again, some would choose to lose the 500$ - especially if said 500$ is resell value, not your actual cost. It depends on the bottom line really what's best for you. I think you had great suggestions about what you can do to protect yourself and your customers without losing even 500$ a year. Signing on delivery is indeed something hard to count on when shipping to a customer's workplace for example - I do so with my packages and my workplace is safe, but I never myself signed for much more than 5-10% of my orders. Moreover with COVID they don't require any signing anymore - temporary but yet not about to end tomorrow.

 

[Nemo]

I gotta say, I find it incredible that delivery/ postage businesses (whose core business is, after all... delivery) get a pass when they fail to provide the service which you pay for.

Essentially, if you want to guarantee that the service actually gets provided, you gotta pay a big premium ("insurance"), which they will then try their best to wriggle out of when you need to make a claim ("it wasn't packed properly").

#Customerservice ... not

Having said all that, for the little guy, disappointing customers is terrible for word of mouth reputation. So doing whatever it takes to prevent this is probably worth it.

 

[ModRQC]

So true @Nemo. This shouldn’t be either buyer’s or seller’s fault in many cases. Meanwhile, I can understand that they’ve dealt with human error not being on their end but costing them enough that they have now wiggled out of any responsability per see. @John Loftis is entitled to do the same. In the end who says the customer ain’t plain lying with that small amount of cases? I think John must sell quite a number of things in a year, and a couple of cases to me falls within « moron » percentage of any population.

 

[VICTOR J CREAZZI]

FedEx and UPS cover a maximum of $100 unless I buy extra insurance. Extra insurance is somewhat expensive and I typically don't buy it unless the order itself is unusually high.

So, do you get $100 when the customer says it never arrived? I've always assumed that I would get the $50 when I send something priority if the customer claimed not to get the package, and I also assumed that the P.O. would investigate the loss, putting the customer in jeopardy of mail fraud if they were being dishonest.

 

[juice]

Free delivery is never free - someone is paying for it somewhere along the line.

I prefer the pricing model that has the price for the item and then shipping as an additional expense (for expensive items like a knife). Explain upfront that items ship insured (which means they have to sign for it) because they're valuable and you can't trust shipping services, and give a couple of example pricings (CONUS, Europe, whatever) and I think you're covered. SURELY people who want to buy an expensive bespoke knife also want to make sure they actually get it, thus the most secure shipping route should be a given.

(I'm assuming you're not shipping out hundreds a week (in which case your assistant can do this bit, unless your new ecommerce program can do it so doing shipping shouldn't be a massive impost.)

 

[Bensbites]

Free delivery is never free - someone is paying for it somewhere along the line.

I prefer the pricing model that has the price for the item and then shipping as an additional expense (for expensive items like a knife). Explain upfront that items ship insured (which means they have to sign for it) because they're valuable and you can't trust shipping services, and give a couple of example pricings (CONUS, Europe, whatever) and I think you're covered. SURELY people who want to buy an expensive bespoke knife also want to make sure they actually get it, thus the most secure shipping route should be a given.

(I'm assuming you're not shipping out hundreds a week (in which case your assistant can do this bit, unless your new ecommerce program can do it so doing shipping shouldn't be a massive impost.)

I ship insured priority USPS all the time, under a certain value (last time I checked it was $500), no signature is required. In fact my UPS driver has signed for me and left packages on my doorstep or he will hand them to me and say I signed for you.

 

[Bensbites]

So, do you get $100 when the customer says it never arrived? I've always assumed that I would get the $50 when I send something priority if the customer claimed not to get the package, and I also assumed that the P.O. would investigate the loss, putting the customer in jeopardy of mail fraud if they were being dishonest.

With USPS, you need to document value as in, a sales recipt or similar.

 

[Bensbites]

Most businesses would use the risk assessment vs. typical cost per case to adjust. It's pretty simple especially when you mention "a couple of times in a year". Losing 500$ vs insuring 50K of sales for example. If it is more expensive to insure each order, then there is the case to up the prices, but again, some would choose to lose the 500$ - especially if said 500$ is resell value, not your actual cost. It depends on the bottom line really what's best for you. I think you had great suggestions about what you can do to protect yourself and your customers without losing even 500$ a year. Signing on delivery is indeed something hard to count on when shipping to a customer's workplace for example - I do so with my packages and my workplace is safe, but I never myself signed for much more than 5-10% of my orders. Moreover with COVID they don't require any signing anymore - temporary but yet not about to end tomorrow.

Talking about risk vs reward, generally (very generally) self insuring is cheaper. So one is making money on all those insurance bills.

 

[juice]

I ship insured priority USPS all the time, under a certain value (last time I checked it was $500), no signature is required.

OK, here you can choose nothing, signature required, or insured (over and above the $100 included) which automatically includes signature required (which seems to make sense from their POV).

 

[daveb]

I gotta say, I find it incredible that delivery/ postage businesses (whose core business is, after all... delivery) get a pass when they fail to provide the service which you pay for.....

You've just captured USPS business model. "Yes I know you paid for 2 day delivery. Yes I know it took 10 days. Yes I know there's not a thing you can do about it. No there will be no refund" Small wonder that when the US Govt wants to ship something to be there on time they use FedEx.

@john, I'm with the give the customer the option to pay for additonal insurance crowd. You could probably figure an equitable flat fee to apply (or not) to all packages.

 

[ModRQC]

Insurance is usually a percentage, pretty easy to apply to any value in the package - and to be calculated at checkout.

 

[John Loftis]

To be clear, I do buy extra insurance all the time. I also spend a fortune on custom foam corner blocks to protect our butcher block. There's a threshold value for me, above which it makes sense to bite the bullet and get insurance. For packages under the threshold value, the way it works when there is a claim (either for damage or for loss):

1) I solicit photos (if damage) from the customer-- of the box, the shipping label, the packaging, and the damaged item.
2) submit those and do a full write-up when I file the claim online
3) UPS almost always denies the claim. Not our fault, there's nothing to see here, please move along.
4) I call and petition the denial, waiting on hold 20 minutes to get a rep. They continue to deny until Iose my temper. Losing my temper is key. If I stay calm, they argue until I get mad. I'm fairly sure UPS customer service reps are fueled by customer anger. Or maybe they have an anger quota...
5) They require more paperwork. Pictures of my third-born, proof that I have a woodshop, love letters from first girlfriend.
6) They approve the claim. This generally takes two weeks, and a physical check is mailed to me for $100 + shipping charges two weeks after that.

I've just switched to FedEx for most domestic shipments. We'll see how that goes. My strong belief is that UPS is awful because they can be awful. There aren't a lot of choices out there, so they only have to be as good or better than 2 competitors. It's like the old adage, "If a bear is chasing a group of you, you don't have to be fast; you just have to be faster than the fat kid." USPS is the fat kid. FedEx is the only thing possibly keeping UPS honest.

 

[Matus]

You've just captured USPS business model. "Yes I know you paid for 2 day delivery. Yes I know it took 10 days. Yes I know there's not a thing you can do about it. No there will be no refund" Small wonder that when the US Govt wants to ship something to be there on time they use FedEx.

It's basically the same here Dave (when things go south) - and I mean also inland shipping. At least the reliability seems pretty good though.

 

[MarcelNL]

I deal with quite a bit of couriers, and it's not a question if they screw up but when and how often -taking longer than advertized is the least problem. More important than that is HOW they handle screw ups...biggest issue IMO is that courier performance varies regionally, so courier A may be great in the North West US, but they suck in the south, or they suck internationally - or everywhere...

Once you get to an X amount of traffic that warrants a 'personal' account manager, or direct contact, things become more manageable with most couriers, some couriers offer that when setting up a business account versus making single shipments. There ought to be general wisdom on this gathered on a forum or something for (small) business owners.

 

[GoodMagic]

The only delivery service I have not had an issue with is Dhl. Fed ex is worse than ups imo. As a customer I would expect the seller to cover an item not delivered. If I purchased an expensive item that did not get delivered and I contacted the seller who then toled me sorry you’ll have to deal with the delivery company, well I would never buy from that seller again. Damage is slightly different. also, I am always willing to pay more for insured, signature required, traceable delivery. Not sure if that answers your question, and just my opinion.

 

[josemartinlopez]

I would offer a reasonable shipping option with full insurance and be very clear on the pricing for shipping. If it doesn't arrive, the customer would surely expect the store to figure it out and claim against the insurance. But if the customer wants to pay less for shipping and accept a shipment not fully insured, it has to be clear that the customer shoulders that risk.

If the package is valuable enough, it should be worth driving out to pick it up or using a secure package locker option if that is available.

 

[Slim278]

I know some places like Knives Ship Free use a third party insurance. May be an option worth investigation.

 

[Tristan]

As an international customer who has bought from your predecessor and would likely buy again in the future:
1. International I would prefer DHL as they have been the most reliable service prior to and also all throughout the Covid situation
2. I would pay for an option to insure if it was a higher value, though I have never experienced lost mail to Singapore prior. Some pieces Have gone missing for long periods, though that’s almost always free delivery options. Luckily they all showed up in the end.

It would never make sense for a customer to pay for everything in advance and be out a product if a genuine case of non delivery occurred.

 

[juice]

1. International I would prefer DHL as they have been the most reliable service prior to and also all throughout the Covid situation

To you, maybe. DHL is certainly not the "most reliable" in Australia. "International" is far from being one homogenous basket.

 

[BillHanna]

With BoardSMITH now being on Amazon, it's still more financially advantageous for you with direct orders, correct?