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Lost parcels: the cost and how we work to prevent it

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Everybody knows about the explosion in online sales and the convenience of home delivery. The estimated value of the UK online retail market in 2012 was £78bn. Businesses on the whole accept that there is risk involved in eCommerce, such as: fraud, online theft, damaged parcels and lost parcels. Losing parcels costs UK businesses heavily. The Interactive Media and Retail Group estimates the annual cost of failed online deliveries at £851m. However, there are other costs aside from the value of the product and any replacements. It costs businesses in time as well as money.

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Customer service

It takes time to pacify a disappointed customer properly and costs you for replacement products, delivery and packaging materials. Most businesses know they need to keep their customers happy and treat them with respect and to do this well means e-mails, time on the phone and even the odd complimentary gift on top.

Reputation

Lost or damaged parcels cost you your brand's reputation and the confidence and trust you have no doubt spend a great deal of time and effort building up through your customer service, marketing, copy, advertising and website design. The hard work and effort that you have put into building your brand can be eroded by a careless third party delivery is really unfair.

Negative feedback

The majority of online feedback tends to be consumers who are angry about late delivery, damaged delivery or no delivery at all. One of the most powerful tools the eCommerce consumer now has is the review and social media. Damning words from disgruntled customers can again damage your brand and lose you future sales from potential customers. A recent survey by eGain found that of 3,000 consumers surveyed, 30% of British online buyers would abandon their purchases because they’d seen negative reviews or ratings. This can be countered effectively with appropriate responses. This again will cost you dearly in time when it could have been avoided in the first place.

Loss of repeat purchases

Negative feedback may well prevent you gaining new customers who are review sensitive. However, a lost parcel can lose you an existing customer as well as one who may well shop with a competitor if they feel you cannot complete one of the most important stages in a customer's journey. This again costs time in customer service and brand reputation.

Carrier claims

It is very easy to blame a careless delivery person, however, they are under huge pressure to deliver on time from their management. Really the onus should be on the company to put great service above fast service and instil a culture of care. However, it is a difficult balance to get right between speed and accuracy because customers demand both. Mistakes will happen and even the best carriers will lose and damage a parcel from time to time. This is the reason so many carriers refuse to compensate for damage on a number of products. Carriers will compensate for a lost or stolen parcel. The same cost in time rears its head again. Let’s face it, Carriers do not deal with them at lightening fast speed they are in no hurry to process claims and pay out it takes persistence to get your money back and it costs you in time.

What to do to help avoid this

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Clear addressing

It may seem like a simple solution. You would be surprised by how many parcels are sent through the post and by carriers with illegible labels on them. We ensure that our labels are checked and placed neatly and firmly on all parcels we dispatch.

Address checking

Making sure the customer’s address is correct even if they give it in person as the addressee. People often make mistakes even when it’s been their own address for fifty odd years.

Be discreet

Packaging that does not give away the contents is always a good idea yet so many parcels are still sent through the post and by carriers blatantly advertising what is inside. If companies are going to do this, they may as well put another label on saying ‘Steal Me!’

Return address

If your parcel is undeliverable or has not been collected by the recipient, there is still a very good chance you will get it back as we put a discreet unbranded return address on it.

Your logo

Many companies like their logo to be on the shipping labels. However if your company name or logo gives away what may be inside and it is attractive to the casual thief it may be a good idea to not do it. See the point on being discreet above. We offer a branding option as standard so you can enjoy the value of parcel branding if you feel it’s appropriate.

Tracking services

Tracking does come with a price. We’re not suggesting you use it for every order but when the order value reaches a certain amount where a loss would cost you much more than cost of tracking then it really is worthwhile.

Insurance

Many businesses assume that just because there parcel contains something valuable, a carrier will compensate for the value of that parcel if it is lost. They will not. They have a maximum amount they will compensate for a parcel and if you want a consignment covered for the full amount you need to purchase insurance. This is vital if you are sending high value orders internationally.

Well packed?

Just like any professional organisation, we use our size and experience to ensure that we keep up with the latest standards and invest in the right equipment, materials and training that will ensure your orders are packed more efficiently, accurately and to provide the best possible protection.

Good relationships

Being nice to the people handling your goods when they collect is a small touch, but it can make all the difference. After all what business does not try to maintain a good relationship with all its partners at whatever level they work. It could mean the difference between your parcel being put carefully in a van or just chucked in. When collections are made by a carrier; we always try to be ready for them when they arrive. Hold ups will mean they are behind on their schedule and they may rush loading and take less care to try and make up the time. They could also drive a little less carefully to get to the next collection on time. We actively work at maintaining good working relationships with all our carriers.

For more insider tips on managing lost parcels, or if you're interested in what our eCommerce fulfilment service can do for your business, contact us today.

July 9th, 2013 by Hannah Newman

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