Forums: Discussions for entrepreneurs and small business.

Being a brand new company, this is something we haven`t had to deal with yet, but I know it is coming, and would love to hear how the more experienced ones handle this.

How do you prevent customers from refusing packages if they want to cancel the order after it has been shipped? Fedex tells me that if that happens, we will be charged the return freight. So a $12 shipping fee charged to the customer becomes a $24 roundtrip charge to us if they do a charge back.

We are online retail food sales - We initially were going to ship same day, but have decided to wait to ship all orders until the following day, just to help prevent this. We want to offer as fast as possible shipping, but we don`t want to shoot ourselves in the foot, either.

Our general policy is that food cannot be returned, but will be refunded if damaged in some way. Since that is the refund policy, we foresee people just refusing the shipment if they decide it was an impulse buy, or some other last minute reason.

I would love any feedback or suggestions!

Jennifer

Edited to say that customer service is not an issue with my scenario. I will quickly take care of any mistake that I make. I`m referring to impulse buys. We cannot accept mail order food back in to our warehouse to ship out to another person. I am curious if other people have issues with customers refusing shipment, in order to aide the customer in getting a chargeback from the credit card company. Thanks. :)


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http://www.ifancyfood.com

Hi Janie,

Yes, the food could be damaged. Some of it is very unlikely, that is in a softer package, but we are mostly shipping glass or plastic containers. We`re selling specialty `fancy` food, gourmet food, etc.  It`s easy to ring up a good sized ticket of imported vinegar, honey, chocolate sauce, pasta, spices, etc and then decide that really overdid it $$ wise, but meanwhile the package has been shipped. I`m sure they do want it if they buy it, but the potential for large ticket impulse buys is there.

I don`t think this will be a common thing, but I am curious how other people handle it.

Thanks,
Jennifer



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http://www.ifancyfood.com

This ties directly to your overall refund policy. Do you offer refunds on satisfaction? If so, then you also will have some percentage of customers who want that refund. Do they ship back the items? Must they be unopened? Is there a restocking fee?

If you haven`t yet had to deal with it, I agree with Janie. I`d say that you likely will get only a very small percentage of people who want a refund, and an even tinier fraction who simply refuse to accept a shipment. Factor it in as the cost of doing business until you have some way to analyze the situation.

Suppose 1 out of 5 customers wants a refund, and of those, 30% are refusing to take delivery. That would tell me there`s a huge problem with the company, the products, the customer service, the decriptions on the sales materials, and the overall company philosophy.

There`s an old platitude lying around, well-known in the entertainment industry. It basically says that "there`s no such thing as a bad audience, only a bad performance." In fact, that`s hogwash! There can indeed be a really bad audience. There also can be very badly matched performances and audiences, where the entire venue is wrong for the act.

So too, people tend to believe that "the customer is always right." That`s not at all true, yet people set up their entire business strategy on the belief. Particularly with the food-item business, all sorts of people could order your product, use it for dinner, say it was awful, and want a refund. Free dinner!

How do you handle refunds? Do you have a 100% satisfaction guarantee? If so, how many people have used that guarantee to ask for a refund? Do they have to ship back the item? Who pays for the return shipping?

Most importantly: Do you have enough transactions to where you can provide a percentage of returns at the moment?

Ok, well I`m feeling better now since it appears refused shipments don`t happen to often at least with the two of you. :) We do have a clear refund policy. No returns on food items (unless damaged). Too much potential for abuse, particularly when the customer doesn`t have to face the person that they`re trying to get a refund from. We weren`t sure about that policy, and after a lot of research, we have found that our toughest competitors don`t really offer satisfaction guarantees either. One of them does have a "100% satisfaction guarantee" but when you read it, it is really only for food that may have spoiled in transit.

Non food items can come back on their quarter and we will replace if broken, or refund.

Craig, so far we have Zero requests for satisfaction refunds and no refused shipments, but we`re new!  I`m really hoping to keep that as close to zero as possible! We`ve worked for months on photos, descriptions, competitive pricing, etc.

Janie, reading your last paragraph - I might have worded my message wrong. Prevention is what I`m looking for, to make sure this does not happen in the first place, or at least as little as possible.  I was hoping to find out what others to do keep this from happening, but it looks like it isn`t a problem. Whew. :) Yes, we are open now. But we`ve still got that new car smell. We`ve still got the paper liners in the floorboard! :)





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http://www.ifancyfood.com

Jennifer,
Kathy and I are so involved with how we feel when we`re disappointed in an online transaction, we just get miserable if someone doesn`t like our own products. We obsess about it, gnaw each others` fingernails, kick da dog, and weep copiously.

Okay...maybe not THAT dramatic, but it really does bother us a whole lot. In all the time we`ve been selling flags, we`ve had 1 customer who was upset enough to want a refund. Upon exploring the issue, we both felt that it was an abuse; it had been a gift and it started to sound as if perhaps the recipient had broken up the relationship.

We go to a fair amount of trouble to confirm the customer order, to confirm it`s exactly what they ordered. We also make sure our site has lots of closeup pictures of exactly how the product looks, flaws and all. We tell the customer when we expect to ship, then when we actually ship.

Along the way, we`ve looked at the various topics here on SuN about returns, refunds, satisfaction guarantees, and whatnot. It comes down to that 1-3% of customers who you just won`t be able to satifsy. With the ongoing care of a therapist on retainer, good American pharmaceuticals, and no sharp objects close at hand, we`ve managed to accept that.....not everyone is going to fall in love with our product.

Jamie and Craig are both right and have made some good points here.  Let’s face it, returns happen.  Concentrate on producing a product that your customers cannot live without and be up front with them when it comes to policies, product description, product quality, customer service and charges.  Then the few returns you end up with will not matter.

As for return freight charges, make sure your customers knows they can easily return the products by making arrangements with you after they receive it and they are not satisfied.  This will allow you to choose a cheaper way to get it back to limit your loss.  If you leave refusing the package as their only choice you will pay the price.

Good luck with your business...

 

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Bert at Harvey Software, Inc.
Multi-Carrier Shipping Software and Supply Chain Solutions for Internet Retailers

Also a provider of free shipping information and resources at Harvey Software`s Parcel Shipping Blog along with free tracking solutions at TrackingPage.com...

I don`t know about the food industry but in apparel, we`ve eliminated most bounced boxes by collecting at the time of shipment. We also share info on our forum about buyers who tend to do such slimey things.


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~Nurture people, not products~
http://www.fashion-incubator.com

Kathleen,

Do you collect at the time of shipment via charge cards?  What about charge backs if you do?  Also, couldn`t sharing buyer actions at a forum put you in a bad legal position?

These are the things that came to mind as I read your post...

Bert

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Bert at Harvey Software, Inc.
Multi-Carrier Shipping Software and Supply Chain Solutions for Internet Retailers

Also a provider of free shipping information and resources at Harvey Software`s Parcel Shipping Blog along with free tracking solutions at TrackingPage.com...