Are You Leaving Shipping Refund Money On the Table?

As a parts retailer, you spend a lot of money on shipping. In fact, shipping might be one of your biggest expenses. Therefore, when there’s a possibility of getting a refund from your shipping provider, you try to get it back. Here’s what you need to know.

Shipping refund money

What Are Shipping Refunds, and Is Your Company Entitled to Them?

All major shipping carriers offer a money-back guarantee for on-time delivery. Most will offer partial refunds on expedited shipping fees if the part doesn’t arrive on time. While the refunds aren’t sizable – often just a few dollars – they can add up.

The “catch” is that the shipper has to check each part’s arrival time vs. the expected delivery time, file a complaint, and do so within 15 days of the late delivery. If you’ve got a small volume of expedited shipping, it’s relatively easy to keep track of shipping delays. But once you start shipping out parts in volume, checking for refunds (refunds that are usually only a few dollars) just isn’t practical.

Shipping carriers

NOTE: If you’ve negotiated a special shipping program and/or rate with your provider, you can probably stop reading this article…most negotiated discounts include a forfeiture of refunds (you might want to check your contract to be sure).

What’s more, most busy shippers won’t even realize when a package is late unless a customer complains. Someone has to compare actual delivery times to expected delivery times, then check to see if the delay is eligible, then request the refund. Who wants to do that?

“Big Data” To the Rescue

Shipping refund trashcan

Most etailers can’t or won’t sit down and figure out refunds due to the work involved, but the good news is that etailers don’t have to do this manually. Instead, they can use companies that offer “shipment auditing services” – like RefundRetriever.com and 71lbs.com – to audit all shipments and automatically request refunds.

These auditing services will track your deliveries, compare the actual delivery time to the promised time, and then file claims for you when a delivery is late. While they take a percentage of the refund for their trouble, they streamline an arduous process. Most of these companies offer to save you 5-10% on your shipping expenses.

Are Shipment Auditing Services Worthwhile?

If you’re shipping enough parts to justify the cost of hiring someone to audit shipping records, than it probably doesn’t make sense to hire a service. Of course, that means you’re shipping hundreds of packages a week (many of which are expedited), and in that situation you can (and should) negotiate a discounted rate from your shipping company.

But if you’re a smaller etailer who is only shipping a handful of packages a day – and who doesn’t want to worry about auditing shipping records – an auditing service can be a good idea. Just make sure you understand your fees before you get started (some auditors charge setup fees, cancellation fees, etc.).

Finally, keep in mind that most of the shipment auditing services are designed to “hook in” to standard ecommerce systems (like Magento). If you’re not using a standard ecommerce system, getting your data to the auditor may require some effort.

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