Minimising “lost” Deliveries over Christmas
One of the often forgotten costs of Ecommerce is theft. Either in transit, or “never arrived”. In the current recession too many chancers try to fund their Christmas from the retailer's pocket. Obviously we do everything we reasonably can to minimise this, but no matter what we do, there is always theft. So far this year, I am getting more than usual.
The first thing to do is reduce the initial problem. Consider sending every parcel tracked. This has a cost. For me to send a parcel tracked in the UK will cost me an additional $5.50. Since the actual postage is about $2.50 and my average order is just $20, this is an expensive luxury. Basic economics thus forces me to reserve tracking for the more expensive orders. The exact cut off depends on the rate of loss verses the additional cost of tracking.
Then go for faster postal services. For most of the year I use 2nd class post. This can take 3-5 days. For Christmas I change to 1st class. 90% of this arrives next day, and 99.99% within 2 days. This significantly reduces the number of “where is my parcel queries”, as it eliminates the worried impatient ones.
This leaves the ones who claim it never arrived.
After 15 years of Ecommerce some things stand out. When the “my stuff has not arrived” e-mail comes, the scammer ones seem to stand out. I am not saying I can spot 100% the fake missing delivery e-mails, but some just stand out. Either by they way they are worded, or the timing, or something that just does not feel right. You just “know” you are being scammed. There is however nothing you can do about it now. You have to treat all missing delivery e-mails in the same way. Although it grates, you have no choice. You must do it in a professional way. Emotion must not get in the way.
There are only three possible outcomes, it “arrives”, you send a replacement, or you refund. I have a standard set of actions to employ, and depending on first impressions when I get the initial missing order e-mail, I may miss out the first few steps. If it really think it is a scammer, then I make them work for their refund. If I think they are genuine I try to make the path as smooth and fast as possible.
1 Play the waiting game
At this time of year there is always a reason for parcels to be delayed. Either snow, floods, strikes, or just too many other parcels. Sometimes if you just ask a customer to wait another week and get back to you if it still has not arrived, then that is the last you hear from them.
2 “You were out when they tried to deliver”
Postmen are meant to leave a card if they fail to deliver when there is no reply. Sometimes they do not. I ask my customers to contact the local delivery office to see if they have their parcel and arrange re-delivery or collection. In 50% of cases this again is the last I hear of it. Some scammers reply within minutes and say something like “I have just phoned them and they do not have my parcel”. One optimist tried this on a Sunday afternoon. This was one of the few times I reported this to Amazon and the upheld my side of it.
3 Imply you can actually trace the parcel
This is a bit difficult. Because you have not used a tracking method, you cannot really track the parcel, BUT chancers may not know this. So sometimes I say that I am asking the post office to investigate this delivery because I am concerned that too much is going missing in their area. Implying that my worry is that the theft is being done by the post office. This CAN get the nervous scammer to suddenly “find” the parcel. This CAN get the seasoned scammer to likewise “find” the parcel because they do not want the post office investigators to spot a pattern. Its a long shot though, experienced scammers know I am bluffing and demand “their” refund.
4 Refund or Replace.
If all else fails you have to offer to refund or send a replacement. Naturally a scammer will prefer money, and a genuine customer will, time permitting, prefer a replacement. Even if you are 100% sure that they are scamming you, you cannot afford to say no. All that will happen is you will get a chargeback claim, or a Paypal claim, or an Amazon A-Z claim. Without proof of delivery you will loose, and in loosing this will cost you more.
In some very rare cases I have asked the customer to raise the claim, as there is a chance they will not. Amazon certainly monitors non receipt claims and if they spot a pattern will ban a buyer. Experienced scammers know this, and realising that their bluff has been called will suddenly "find" the package. This really is a dangerous option, as if they do raise the claim, you have to pay up, and your metrics will look bad as a result.
I record the cost of these losses, all the costs, together with type of product, destination, and value. This information can be analysed to see if there are areas or countries where I should not ship or should only use tracked; types of products where I have to go for a higher profit margin due to losses; and any other metric that I think may affect the likelihood of theft. It is a constantly changing picture. The only winners are the scammers, the loosers are the honest customers, who have to pay more as the losses are built into my costs.
Have you used fraud prevention services like Subuno or maxmind to minimise "missing package" occurrences by screening cardholders and flat out refusing to conclude a sale to those that get flagged?
Richard Stubbings says:
Yes, but many of my sales are via Amazon, and they do the "fraud" screening and pass the buck onto us. There is never 100% screening.
Mike Darnell says:
Great article, thanks for sharing your expertise.
Elizabeth Ball says:
I use tracking for each delivery and in the few occasions it had not arrived, the customer had entered the gift recipient's address incorrectly. In their email confirmation they see the address once more so they can quickly contact me if they've made a mistake. As a sidenote, it is fascinating (and a little sad) to realise that many people don't know their neighbours' names as these wrongly addressed packages have simply been sent to the adjacent house.
Richard Stubbings says:
I would use tracking too, if my average order value merited it. One tracked method I did use on some orders did not require a signature on receipt. But it did track all the way to receipt. I actually got more "missing" deliveries than non tracked, percentage wise. However as I could then say exactly when (to the minute) the parcel was delivered, they all "found" them. Their partner or child had taken delivery and "misplaced" the item. It appeared to a cynic like me that the people assumed that the postman had forgotten to take a signature and thus there would be no record of delivery. Hence they were tempted to try it on.
Great post Richard, really useful. I would try and negate these problems in the first instance by using address validation software in the checkout process. The cost of missed deliveries is too expensive to leave this to chance. A customer making a simple mistake such as missing a K in their postcode could mean the difference between a delivery ending up in Manchester rather than Milton Keynes.
Richard Stubbings says:
True, or alternatively use the Royal Mail despatch express program, like I do, or the Royal Mail Despatch Manager Online, which automatically validates addresses and lets you know if there is a problem. I prefer not to have too much validation/error reporting during my checkout. The Post Office Address file is not 100% accurate nor up to date, and there is nothing worse than a checkout telling a customer that their address is wrong, when the address is not wrong.