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Restocking fee - does it work?



12:55 pm on Jul 18, 2012 (gmt 0)

We offer free shipping on domestic orders over $50.
However, at times a customer will put the wrong address and the package is not deliverable.

We tell them they are responsible for the shipping charges to have it shipped again.

They say they will just cancel the order and then re-order again.
I saw some other web sites that charge a restocking fee of 25%.

Does this work?


1:24 pm on Jul 18, 2012 (gmt 0)

We usually just reship it domestically (in the US) but our shipping costs are usually fairly low. Only on foreign orders do we recharge for wrong address or no customs pick up. I have never had a problem with cancellation and re-order and we do not charge a restock fee.


1:34 pm on Jul 18, 2012 (gmt 0)

The customer that called yesterday had a shipping charge of $10
It was priority usps from florida to california.

If it was just first class mail, then we could just eat the cost, but this package does not qualify because of weight.


5:16 pm on Jul 18, 2012 (gmt 0)

I don't know your business but I would consider the lifetime value of the customer and your reputation management


5:57 pm on Jul 18, 2012 (gmt 0)

I agree, just hard to swallow that pill. But you are correct.


8:28 pm on Jul 18, 2012 (gmt 0)

Many of our items are $30-60 to ship, so it's hard for us to 'suck it up'. Invariably, some customers will take exception to requests for additional shipping, but I find there's a couple of ways that sit better with customers:

1) Most importantly, have a very clear policy in place that outlines your procedures. Customers hate to feel like you're making up rules on the fly targeted to them. By having very clear policies, it also creates a more careful customer which benefits everyone.

2) Offer a gift card on their next purchase for the said shipping charges.

Returns are one of the costliest parts of retail. I often think some small businesses avoid the uncomfortable experience of dealing with a perturbed customer on the pretense of 'good customer service'.


12:07 pm on Jul 20, 2012 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member

What about restocking fees on merchandise returns?

Some of our longtime competitors charge a substantial (20% range) restocking fee on returned orders where the customer merely changes his mind or doesn't like the product when he sees it. Almost no brick/mortar stores charge such fees. These competitors don't have conventional stores (we do).

Even tho the sellers explain the restocking free, I'd think it would be an unending source of friction. Yet some sellers have had such fees for years.


4:35 pm on Jul 20, 2012 (gmt 0)

10+ Year Member

Charging for re-ship: You have to judge this by your cost and the nature of your products or business.

Since you offer free shipping, it's almost impossible to open up the can of worms to charge for address input errors. Do you utilize address verification? If so, then shouldn't a bad address been pre-flagged?

If you do decide to charge, make sure you create an easy-to-understand explanation and include some sort of "Buy Now" button directly to the re-shipping charge in the email. Let the customer input the charge.

I do think it is important to create a well-written explanation that doesn't focus on the customer's error, many customers are easily affronted; the last thing you want is an insulted customer who thinks you are scamming for more money. A photo the returned shipping label is always good.

Restocking fee? Yes, it's become very common and customers do understand it. The return fees have to be easy to find on your site. Refunding customers promptly takes some of the sting from the fees.

I keep my re-stocking fee at 8%, which is a nice friendly number that covers my cost and doesn't create enemies.


4:53 pm on Jul 20, 2012 (gmt 0)

Thank you for your reply.

We only utilize address verification when we attempt to print the USPS label. That would not help us if they provide the incorrect street number or forget to add the apartment number.

Ok, then we may do a restocking fee in the future. No more than 10% just to help us recover some of the costs.


9:02 pm on Jul 20, 2012 (gmt 0)

If you do decide to charge, make sure you create an easy-to-understand explanation and include some sort of "Buy Now" button directly to the re-shipping charge in the email. Let the customer input the charge.

Excellent idea.


4:18 pm on Jul 30, 2012 (gmt 0)

We use stamps.com for our shipping now. We had a big surge in chargebacks and decided to upgrade so that we get TRACKING numbers for every single package- even those sent parcel post for $1.60. It costs us a little more for every package- however we no longer:
(1) Have any chargebacks
(2) Have yet to have anyone not get their package
(3) Have anyone complain because they can't track their package (most customers assumed we would give a tracking number and would complain when they hadn't received a package- and we were getting 20+ requests a day for tracking numbers) Now we very rarely get someone wanting to know where their package is- because our system sends them an email with the tracking number when their order is shipped)

Sometimes international orders don't make it through customs- so our policy is that IF and ONLY IF the product is returned to us from customs- that we will issue a refund less shipping charges. (it's customers responsibility to make sure their packages will get through customs) However, if their package gets confiscated or destroyed by customs- we will not replace the product. Again, all of this is state in the TOS which they agree to when they check-out.

When we had a customer who claimed to not receive the package- we would make sure they waited enough days (ie- parcel post can take up to 14 days with USPS) so as long as it was after that- we would just eat the cost and send them new product. Again, since we no offer tracking on EVERY package we have not had a SINGLE PERSON say they didn't receive their package in 3 months now.

If a customer claims they don't like the product etc.. we offer returns/exchanges ONLY on UNOPENED/unused product and they have to pay the shipping charges to ship it back- plus a 25% restocking fee. We've maybe had 2 customers choose that option this year- most of the time they jsut want an exchange (which again compared to overall sales and orders- that number of customers is VERY small- not even 1 a month)

Our return policy is in our TOS- which they must agree to in order to check-out.

This system seems to work well for us- and since we've implemented it- we've had ZERO chargebacks and ZERO customers saying, "I didn't get my order." Well I take that back- we had one customer who placed an order and it was delivered but he entered the wrong address- so it went to another house and we sent him new product.

Also to get to the point- we have it set up to do address verification/matching for billing address. So as long as it's being shipped there- in theory there shouldn't be a problem- or the address won't match and then their card won't process when they try to check-out. Now if they are having it shipped somewhere else-

My suggestion is to put in your TOS/Policy that it is the customers job to ensure they are entering the CORRECT address and that you cannot be responsible for incorrect addresses. If a customer contacts us before the item is shipped- to let us know of a wrong address- then of course we change it.


3:25 am on Aug 1, 2012 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member

However, at times a customer will put the wrong address and the package is not deliverable.

Treat the package as a Return. Refund the customer for the price of the product, less the shipping they paid. You can't refund the shipping, because you already gave it to the shipper, when you shipped the package.


10:53 am on Aug 1, 2012 (gmt 0)

Thank you, that is what we have been doing. Most since some of orders qualify for free shipping, there is not much we can do but eat that shipping cost.


8:23 pm on Aug 1, 2012 (gmt 0)

Most since some of orders qualify for free shipping, there is not much we can do but eat that shipping cost.

That's the problem right there. On the checkout, don't call it free shipping. Customers invariably misjudge the cost to send a package, and while they know it doesn't cost $0 for you, they believe you get some ultra discount that allows you to send packages for pennies on the dollar. Call it a shipping discount (or as Amazon calls it, a Super Saver Shipping Discount).

Consider these two example invoices.

Invoice A
Widget: $99.99
Shipping: $0
Total: $99.99

Invoice B
Widget: $99.99
Shipping $9.99
Promo Discount: -$9.99
Total: $99.99

You can be sure that the backlash from customers when you let them know they're on the hook for the return shipping charges will be far less with Invoice B.

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