Merchant Question—“Ship” is a Four Letter Word Sometimes
Thursday, June 15th, 2006
A merchant sent in this question recently:
What is the best way to deal with a customer who orders using an incomplete address (for example, a work address at a large building and they don’t include the floor number or company name) and then they contact you all mad that they haven’t gotten their order? The customer of course wants the store to foot the bill for a replacement order.
Shipping. It can literally make or break your business. Offer free shipping for orders over a certain dollar amount, and your average order size may jump way up. However, if you don’t have specific shipping policies outlined, choose the wrong shipping options, or don’t take time to get use accurate weight and package sizes, you may be undercharging buyers for shipping and/or facing chargebacks that cut into your profits. So how do you avoid issues like the one described above? I can offer a few tips, but in reality, there may be no 100% solution.
Keep in mind with the situation above, the shopper may feel more secure sending the package to a business address.
Tips to Avoid (or, More Likely, Mitigate) Delivery Issues
- Add extra fields for business addresses such as company name to your checkout. Spell out in clear terms that shoppers must provide the company name and mailstop in order to ship to a business address if that is your policy.
- Follow up with the customer by email or phone if the address looks incomplete for a business address. While this may take some time, you may make a favorable impression with the customer by showing concern for the safe arrival of the order. You can use the “map” link appearing beneath the shipping address in the Order Manager to look up an address in Yahoo! Maps.
- Ship your package with a carrier that offers email notifications to both you and the buyer when the package is shipped, delivered, or when the carrier is having problems with the delivery. This allows you and the buyer to quickly resolve the problem before you have to reship the order.
- Require a signature for delivery. If you can prove the item was delivered by having a signature, then the shopper’s issue with your delivery of the order, becomes an issue for the shopper to take up with the mail room at their company. This may cost extra for some carriers, but if the value of the order is large enough, it may give you more peace of mind. Sometimes just using a service that allows for tracking will avoid this problem altogether because you can clearly show when a delivery was made, who it was delivered to, and at what address.
- Refuse delivery to business addresses. While this may require some research if reviewing manually, some carriers may have tools that can tell if an address is commercial or residential. If delivery to business addresses pose a consistent problem for you, or if an order is large enough to cause concern, contact the buyer and ask for another shipping address. Remember though that buyers may prefer shipping to a business address.
Even with extra measures in place, such issues may still arise. How you deal with them can also, (perhaps even more so), impact your business in the long term.
When Things Go Wrong
- Put it in writing. Outline your shipping policies in detail so you can reference them to customers that may have issues. Review shipping policies of stores that have been around for some time. Their policies will likely cover cases you may face in the future. Adopt those policies that make sense to you, but adapt them so they make sense to your shoppers. You may wish to consult a lawyer to determine if your policies will stand up to a legal challenge.
- Review each case individually. While your policies may be crystal clear, it may make sense to review each case individually. In some cases, the customer may truly not be at fault. If the carrier loses the package, you may be able to recover costs from the carrier. You also will come off as more reasonable if you are willing to talk with shoppers with an issue and come to an amicable agreement. Remember that winning by not refunding a $20 order may cost you a hundred fold in bad word of mouth.
- Factor some loss into your business planning. You may want to consider shipping losses to be similar to fraud where you can plan and implement ways to reduce them, but you may never get rid of it. How hard you dispute with buyers should be determined by your willingness (and financial ability) to accept some losses, the likelihood that the buyer may issue a chargeback, the likelihood you may win the chargeback, and how much negative impact to your company’s name may happen if the shopper feels they have been “cheated”.
This does not mean you should roll over when challenged, nor does it mean you should battle each case knowing you are in the right. Rather, you should take all reasonable steps to prevent these issues before they occur, and if they do, take a pragmatic approach to finding a resolution. The same customer you could make into an enemy by fighting could be turned into a loyal customer that evangelizes your company to many others because you took the time to find a reasonable solution.
Sound off, merchants. I know some of you may have dealt with shipping issues. Post your take on dealing with shipping issues in the comments.
Paul Boisvert
Yahoo! Small Business
Comments
I think you nailed the key issue Ed–communication. Good service is all about communicating expectations. When you take the extra moment to speak with the customer and tell them your concerns, you guard your brand against bad word of mouth by setting the expectation based on your experience that there may be a problem. The customer can’t say you didn’t try to warn them–not that they will always be happy if there is a problem.
Comment by Administrator — June 15, 2006 @ 5:39 pm
I have found that offering free shipping over a certain dollar amount definitely helped to bring in larger orders. I started out with $49 and after a while jumped it to $59 very successfully.
I ship primarily with the US Post Office. If the address can’t be verified, I always contact the customer. Sometimes they have just mis-typed their house number.
When they contact me saying that they haven’t received their order (if they’re in an apartment or whatever), I tell them to double-check with any person who might take packages for them — or if it’s a business, to double-check the mailroom. Most of the time they magically find their lost package! Sometimes the package is waiting for them at their local post office — so I tell them to also check with their local mailman.
International shipping is a whole different ball of wax. I offer my customers either regular international airmail without tracking, or global express mail with tracking. I email them the shipping options and spell out all the terms — that customs fees are not included, etc. This way there are no surprises. Sometimes international orders get held up in their country’s Customs office. I clearly state in my shipping notification that we are not responsible for packages held up in Customs.
There have been a few times when I have had to re-ship an item to a customer, eating the cost. But that has been rare. I view it as one cost of doing business. Fortunately they have never been large dollar amounts!
Comment by Lynn — June 22, 2006 @ 6:44 am
Thanks Lynn for relating your experiences with shipping. This seems like one topic new merchants may just need some time and experience to really “solve”. The more advice experienced merchants can pass along, the less chance they may learn a lesson the hard way.
Paul
Comment by Administrator — June 23, 2006 @ 3:30 am
I would like to have the customer enter a project name early in the order process and have this value passed to the checkout manager. Is there a way to do this?
Comment by James Clements — July 13, 2006 @ 4:46 pm
Our products are complex, for example each brochure has different sizes, inks, paper types, etc. with each combination ending up as a different product. I cannot offer every possible combination to the customer as it ends up being thousands of possibilities so I `construct` the product name from the user’s choices. What is the best way to pass this constructed product to the checkout manager? The way I’m doing it now works but I feel it is a kludge and I want to do it the right way.
Thanks.
Comment by James Clements — July 13, 2006 @ 4:49 pm
James,
You can add a required text field as early as the Shipping page (or single page checkout). This field will get passed with your order data. Checkout the help for adding fields in Checkout Manager. You can label the field whatever you wish and even add help text to inform buyers of the purpose of the field and why it is required.
Paul
Comment by Administrator — July 13, 2006 @ 5:08 pm
I run a small business and i offer free shipping on orders over $60 dollars. At first I was skeptical, but my friend told me about shippingsidekick.com and when I checked it out it allowed me to find the absolutely cheapest shipping possible by comparing the prices of UPS, USPS, FedEx, and DHL. This allows me to always offer my customers a good deal while keeping the cost low.
Editor’s Note:There are free services such as iship.com and redroller.com that allow you to compare rates between carriers (though these have some drawbacks). The site mentioned above does require a credit card even to register for the 14-day “free” trial.
Comment by Rick Nerlik — January 25, 2007 @ 9:56 pm
Is there a way I can add $30 for handling fee and have it display on the item line in checkout, and I want to know if I can use that variable to calculate the TOTAL handling fee for the order. Not all items in the order would have this fee, just certain items.
Comment by Jerry — May 18, 2008 @ 3:20 pm
Jerry,
There is no way currently to add handling as a line item to the cart. For handling charges that are universal (regardless of item ordered) you can add a rule to cover handling which will add your handling charge to the shipping cost. For handling charges that exist on a per item basis, you can use the Option field to add a Handlign option with an incremental price. This “option” will show up in the Options column of the cart and the handling option fee would be added to the unit price of the item (but for each item).
Paul
Comment by pboisver — May 19, 2008 @ 5:13 am
In a similar case we made an agreement with the purchaser to ship another package out with the understanding that if the package was returned to us due to insufficient addressing (it was) that we would be charging them additional postage.
Comment by ed fielding — June 15, 2006 @ 4:12 pm