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Wednesday, August 26, 2015

Shipping Claims We Deal with As Online Sellers

Shipping orders by online sellers is probably the longest run discussion in the history of e-commerce.  I know that when The Crabby Nook first started selling on eBay in 1999 we had discussions about shipping every few months...sometimes every week.  Shipping has evolved as fast as online selling changes.  Rates go up, methods change, tracking, insurance, signature confirmation...on and on and on.

When we sell on marketplaces like eBay and Amazon we agree to shipping orders in a timely manner so they are received by the buyer within a specific timeline.  Both eBay and Amazon accept when you add a tracking number to show that an order has shipped and a scan of the tracking number while in transit to acknowledge that you, the seller, have actually shipped your package.  However, not every package gets scanned in the delivery process unless you make arrangements to have your packages scanned.  And, when we try to save our customers money by shipping the cheapest way possible, these choices are normally the slowest methods of shipping.  This is a real dilemma for an online marketplace seller because both eBay and Amazon grade a seller's performance on shipping times and delivery, and, can downgrade the visibility of your products for sale on their websites if your packages consistently do not arrive within their specified time frames.  

We offer Free Shipping on all of our orders.  Everyone knows that shipping really is NOT free so we include the cheapest method of shipping in our price of the product.  We then offer upgraded or faster methods of shipping to our customers as an option.  Shipping is calculated by all carriers by rounding up to the next pound.  So, if you have a package that weighs 1 pound 1 ounce, you will be charged for shipping a two pound package.  We handle the difference in upgraded shipping options to our buyers, since they are paying for the slowest or cheapest method of shipping in the price of the item, by adjusting the shipping weight usually by one pound.  USPS Priority prices always start at one pound.  We have also found that if a customer purchases several items in one order, most of the time this allows us to upgrade to the faster shipping method because the customer has actually paid for the slower method several items.  I say "most of the time" because we do sell heavy stone sculptures and sometimes the weight of the package prohibits upgrading to a faster shipping method across country.  We ship boxes of rocks out regularly.

As sellers, we all deal with shipping issues. Some may be legitimate, some may be fraudulent. Here's The Crabby Nook's top tips on how to identify, deal with and prevent those problems.


We seem to get most complaints of packages not received when the order is shipped to an Apartment, Lot number, Suite or a street address that includes A, B, C, etc.   It always seems to start with the least expensive item we sell in our store.  In the past, eBay has accepted the tracking number as proof that the package was delivered and found the claim in our favor.  However, Amazon does not always recognize the tracking number as valid proof that a package was delivered.  We have lost several claims on Amazon when all we had was the tracking number as proof of delivery. This problem seems to have grown uncontrollably for online sellers.  We have talked with Postal Inspectors at length on how to combat this growing trend of theft. What I want to share with you today is how we are proactively reducing the number of claims our company receives for "package not received."

Two years ago we had a buyer on Amazon that finally made us change the way we relied on delivery confirmation and was the final straw.  We had had numerous claims that year on packages not received and after a while the losses start to add up especially for a small business.  When you first look at it and it is just an in-expensive item, you are most likely just willing to ship out a replacement.  No big deal...right?  But we started to see a pattern....  least expensive item shipped to an Apartment building address, or Lot number or Suite number, of package not received.  We would usually add Signature Confirmation on packages over $100 but we know sellers who required Signature Confirmation on orders over $50.  So, it made sense these buyers wanted to stay below this order limit and test at what point your company would require Signature Confirmation.  Two months later this same customer purchased another item and again claimed package not received...they wanted us to send another one.  This time I decided to contact the Post Master at the local post office for this address.  The Post Master told me that the mail boxes at that location were locked boxes!  And, it was a known problem residents there would claim that their packages were not delivered.  However, since the tracking number showed they were delivered, USPS would not pay the insurance claims and the company shipping the packages were just out the money if they replaced the shipments to these "buyers".  Since USPS was not out any money on these claims, they did nothing and let the practice continue.

We filed a complaint with the Postal Inspectors.  We were told that really the claims were too small for them to take on a full blown investigation into this matter.  The only way we could absolutely prove that our packages were delivered was to require a signature confirmation upon delivery and especially to apartment buildings, etc.

Since that incident, we started requiring a signature confirmation on all packages being delivered to an Apartment number, Lot number, Suite number, A, B, C, etc in the address.  In the past year we have had zero claims of packages not received since implementing that policy.  This is amazing! Especially since this type of theft is on the rise for e-commerce companies.  I'm not saying that everyone who has their orders shipped to an apartment or lot number or suite number is filing a claim for packages not received.  The majority of our customers are honest.  It is the few bad apples who make it hard for the rest of us.

Signature Confirmation is incredibly expensive to add though and it makes you want to cry when you are mailing a $5 item.  Right now it costs an additional $2.45 to add Signature Confirmation to a shipping label.  We add $0.20 cents to each item price that we list to sell to cover this cost.  Some weeks we have a lot of packages shipped to apartments, etc and some weeks we have very it all works out in the end.  It is too bad that our honest customers end up paying for the actions of thieves.  I wish our shipping software would automatically add that cost to orders with an apartment number...I guess it just isn't sophisticated enough prediction is that the time will come you will be able to program it to do this.

On occasion we will get a "package not received" claim from a residential address.  Here we request that they first ask the other members in their household if they brought the package in and to contact their local post office to see where the package was left.  Most of the time now when you run the extended tracking information report through USPS it will say where the package was left, the date and the time.  If they still cannot find it, we request that they file a stolen package report with their post office and their local police department.  The crime of stealing packages off porches has increased the last few years and is a very real problem.  Our responsibility as an e-commerce business is to make sure a customer's order is delivered...pretty big responsibility when you are in another part of the country.  But, it is hard for a seller to take the responsibility of a customer's package being stolen from their porch.  

Once the customer makes a police report, we normally contact the police department or post office to provide any information that the customer did not have.  And, now we are able to file an insurance claim to show that the customer filed a police report of theft and the package was believed to be stolen.  We will send a replacement order immediately upon receipt of a police report number.  


How many times have you received a complaint that an item arrived damaged but the customer refuses to send you a photograph of the damage or refuses to return the item and the customer just wants a refund?  I can tell you if the customer goes directly through the marketplace customer service to make a complaint that the item arrived damaged instead of contacting you, the seller directly, it is most likely a fraud customer trying to get the item for free.  This is only our opinion because this has been our experience.

When a customer reports to the marketplace about an item being damaged instead of contacting us directly, we used to request that they return the item to us.  Please note!  This back fired on us numerous times because most of the time, the customer will sufficiently destroy the item before returning it.  We have found that if we request a photograph of the damage instead, the fraudster customer will usually say they don't have a camera, or don't know how to send a photograph in a claim.  Some times they will get a bleeding heart customer service representative who feels sorry for them and your only option is to have them mail it back to you.  

On occasion we get a customer who claims the item arrived damaged but they fixed it ... can we send them a partial refund?  I don't know anyone in my circle of friends who would spend good money on any purchase and it arrived damaged that they would fix it before contacting the company to get a replacement.  My friends don't want a damaged item in any form and would be adament about sending them a new one!  

Our company policy is to request a photo of the damage....period.  We are not going to send anyone a refund or a replacement without proof that the item is, in fact, damaged.  We want photos of the box it arrived in and the packaging too.  USPS only requires photographs of the damage to file an insurance claim.  We will take the time to explain how to take a photograph with their phone and upload the photo to send to us if we have to. I personally don't want a broken item returned to me, but, if it was broken in transit and I have paid for insurance, I want the carrier to take responsibility for damaging my shipments.  USPS usually won't pay if they claim it was broken when they received it and return it to us before sending us a photo of it while in their hands.  USPS will say it could have been broken while being returned to us and of course the customer didn't buy additional insurance.  

In conclusion, this is how our company has evolved in handling fraudulent shipping claims for items not received and items arriving damaged.  How we have chosen to handle these types of claims may not work for every company but at this time it works for us.  Our claims have dramatically decreased over the last year or so because we are following these policies.  Need I say that we have less stress over shipping issues?


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