Practical Ecommerce

January Blues

It’s January and Christmas is over. The huge rush of orders has been picked, packed and dispatched. The first week or two of January is also busy with the customers spending their Christmas money. Then the credit card bills come in, the orders dry up, and the problems start.

What separates a good e-commerce business from a not so good one is how you deal with problems. Anyone can pack and send an order, but what you do when the customer complains is key to your continuing success. We would all like to think that there will never be problems, you will never make a mistake, and you will always send out the perfect product. The trouble is that no one is perfect, and not all customers are honest. You will inevitably get customer complaints, some will be valid and others will be trying it on. ALL have to be dealt with promptly. Nothing will annoy customers more than not replying to their e-mails within a reasonable period, say 24 hours.

Problems should be dealt with consistently, and businesslike. While it is tempting to take it personal feelings have no place here. Customers talk and leave reviews.

It is also a good idea to adhere to the laws of the country where the customer lives. At the very least it reflects their expectations. For the UK the two most relevant laws are the “Sales of Goods Act” and the “Distance Selling Regulations” which are explained in detail in the following links:

If a customer says that the goods did not arrive, or arrived broken, or were not as described then the Sales of Goods Act applies. Unless I can dispute their claim I have to repair, replace or refund. If I ask them to return the goods I have to refund their return postage too.

As every order leaves us it is weighed and the dispatch address recorded with the weight. So I can dispute those customers who claim to have ordered two and only got one, or got the wrong thing. I re-pack their order and weigh it to determine if an error was made. When challenged with evidence customers often “find” the missing item. It is also obvious when an error was made and further investigation can be done to ensure the error is never repeated.

For the non-delivery claims, I look to see if the parcel was sent tracked. The decision to send tracked or not is based on cost. To track a parcel in the UK costs an additional $1 (to track to the USA an additional $8). Our claimed non-delivery rate on small orders is 1%. The average small order cost is say $20. Thus less money is lost by not tracking the small orders. I monitor the non-delivery rate and reduce the threshold for tracking an order by value when losses start to get near the cost of tracking the parcels.

In the rare event that a tracked order is not delivered, I refund the customer, and claim back the loss from the courier. For untracked non-deliveries I first ask the customer to check that a delivery attempt has not been made, and that the parcel is not at a local office awaiting collection. This fixes most of the non-delivery complaints. The rest I simply refund. I rarely re-send. This is a business decision. If a postal route is unreliable then why risk a second hit?

If an item is broken, I ask for a picture and re-send it. I tend not to ask for it to be returned, why throw more money at the problem?

Finally there are those customers who simply no longer want the product. In the UK (and in the EU) I have no choice. Under the Distance Selling Regulations I have to accept the returns, I have to refund in full, and I cannot charge a re-stocking fee. Indeed I have to refund the shipping too. In fact UNLESS I specifically say so in my terms and conditions I have to refund the return postage too.

The Distance Selling Regulations seem to have been drawn up by officials who have no idea of the commercial realities.

So, at the end of January I take a deep breath, add up the refunds, and calculate the true cost of Christmas. It’s never as good as it was.


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