I’ve been following an interesting thread on how to deal with delivery issues with item sold online that I thought would be appropriate to share. Below are the experiences of two vendors in how they have chosen to deal with the challenges of shipping and confirming delivery of their products.

We (John Wagner of Jewelex.com) uses the US Postal Service almost exclusively to deliver our packages. Because we ship a wide variety of package sizes and weights, and because the packing materials are provided free of charge, USPS is by far the most economical of the carriers for us. And they are pretty darn reliable, for the most part!

We ship from Long Island to the rest of the world and our truly disappearing packages so far have numbered about two or three legitimate ones in ten years on the internet. And over 50,000 shipments and
counting. We do get claims of non delivery but we have our own way of handling that.

Whenever we get a claim that a package did not arrive we send an email that states something to the effect that the USPS takes this sort of thing very seriously and we will file a “non delivery claim investigation form”. We tell the customer that the USPS will send a postal inspector to interview them and ask them to sign an affidavit that they did not get it, and go from there.

It is illegal to accept a package that is not addressed to you (it really is) and when they find out who took the package in, the perpetrator faces ten years in prison.

We ask them to wait another couple of days to see if it turns up and if not then of course we will replace it. Well you would be quite surprised at how many packages suddenly turn up (”the neighbor took it in…..the
doorman signed for it….it went to the next house”…etc) when we send the letter to the claimant.

We also then note in our address base in the computer that this particular customer pulled that stunt and all shipments to them are flagged for restricted delivery. Our products and shipments average in the hundreds of dollars, they are not small amounts. Insurance through the post office is expensive in relation to outside insurers but insuring for just $50, no matter how much it really is, guarantees that the post office will take action in the event of a loss. Insurance also gets you a signature delivery so you do not have to pay extra for it. Oddly, $50 insurance costs $1.65 while a signature delivery alone costs $1.75!! So insuring for $50 covers the whole thing for ten cents less!

New York City is a problem area to ship to because in many of the buildings they do not allow the postman to go upstairs to deliver the package, the doorman signs for it and it never gets where it is supposed to go. Or in unguarded buildings it is just left in front of the door and is stolen. In fact we only ship to NYC via restricted delivery to first time customers because we have been beaten a few times there. Out of our ten
or so real losses, eight were from NYC and we know for a fact that at least five of them were fakes because they re-ordered the items they said they never got, items that are no longer available on our website!!. Customers we know get the $50 insurance deal complete with signature.

Signature delivery only proves that someone signed for it, and often that someone is not the person to whom it was addressed. Which can lead to your recipient claiming with his credit card company that he
never got it and which leaves YOU holding the bag because the onus falls upon you to prove delivery.
 
The USPS has a service called “Restricted Delivery” which costs an additional $3.50. It requires that the package be signed for not by someone but ONLY by the person to whom it was addressed and that person
must prove to the postman who he is by way of photo ID. And by law the postman cannot delivery it to anyone else no matter what. If the recipient is not home he must leave a notice that it can be picked up at
the post office only by the legitimate recipient, period. The notice even tells them to bring photo ID or they are not getting it, even if the postman knows them personally on sight. If it is not picked up in ten days it comes back to you.
I (Scott Marino of LittleJammies.com) have been retailing online for 9 years now and have shipped well over 250,000 packages.

For the problem you are referring to, the USPS’s delivery confirmation (not tracking) is not what most would call a robust error-proof service. Some mail carriers scan the package as they deliver them, some scan it
in their truck and some scan it in postal facility before they even start their route. In the last 2 cases, there is much room for error for the package not really getting to the right location. For the overall shipping cost, including the delivery confirmation charge, they do a good job as almost all packages get there.

The problem comes in when the package does not get there. Most USPS shipments end up being for the lower cost merchandise and are self-insured (meaning uninsured). I just padded the shipping a
little to cover the losses and wrote the few lost ones off. I’d stall for time, because many times they would appear days later (probably the person who received the package not addressed to them finally got around
to giving it to the right home).

I made a business decision with my newest venture regarding shipping. When faced with how to get orders to the end customer, for me it came down to 2 carriers, UPS and USPS. I ruled out DHL for having too small
a network and FedEx Ground for similar reasons. In my last company, we averaged what I would term the “problem rate” for packages. That included any communication from a customer related to shipping. For the
USPS, it was around 3% of all orders. Mostly it was a “where is my package” question as many customers did not understand that delivery confirmation did not include “in-transit” scans and was only confirmation of delivery. For UPS, the problem rate was well below 1% as the in-transit scans and tracking information keeps the customer up-to-date on their shipments.

UPS’s cost is higher, but reliability comes with it. I made the business decision to not offer USPS as a shipping option. I looked at the cost of the time wasted with answering the same “where is my package”
question and the inevitable “I didn’t get my package” complaints, the self insured replacement costs and the credit card chargebacks that don’t recognize USPS delivery confirmation as proof of delivery. Those
hidden costs offset the savings in shipping for me to a significant degree.

I only offer UPS as a shipping option. Yes, I charge a little more for it, but the complaints are almost none. In the last 15,000 packages shipped with UPS, I have had 4 totally lost packages, 6 damages and 3
mis-deliveries. UPS paid on all the claims because they were all insured. For the handful of chargebacks, I have not lost a single one as they recognized UPS’s tracking as proof of delivery.

It’s all a matter of economics as to which works best for each business. Looking at the “other” costs like customer questions that have to be answered, the cost of replacing lost merchandise and the lost
chargebacks, the USPS is less of a bargain than simply cheaper rates. With UPS, you can always ask for an incentive (discount) plan as your volume grows.