4 Shipping Policy Best Practices for E-Commerce Businesses

Unless your e-commerce business sells downloadable software or other services that are immediately provided, industry regulations require you to develop a shipping policy and post it on your website. In fact, if you are applying for a merchant account, your application will not be approved until you do that.

Issues with Shipping

Just like most other industry rules, complying with this one makes perfect business sense, as one of the biggest reasons online shoppers dispute transactions is that a delivery is not received when expected. The reason may be that the delivery is running late or even that it is lost by the carrier, but it also may be caused by a miscommunication regarding the delivery time frame.

Moreover, criminals often try to exploit loopholes in the shipping process, allowing them to request shipping to fraudulent addresses or to redirect shipments originally sent to legitimate billing addresses.

E-Commerce Shipping Policy Guidelines

Whatever the cause, you will have to be prepared to handle shipping issues quickly and in a way that keeps customers satisfied. Remember that an immediate financial loss resulting from a mishandled delivery can be compounded by a dispute from a disgruntled customer, which can very easily deteriorate into a chargeback, not to mention a negative review.

Although you can probably never eliminate disputes resulting from shipping-related issues, you can certainly minimize them greatly by developing a good shipping policy and then applying it consistently. When doing so, you should follow these guidelines:

• Information your customers need to know. Your shipping policy should:
  • List the supported shipping options and the expected delivery time frames for each of them. Generally, the more shipping options, the better.
  • Disclose all applicable shipping and handling fees. You should clearly list all costs associated with each shipping option. Don’t try to hide anything or make things more complicated than necessary. Confusion and misinformation will lead to lost sales at the checkout or to disputes and chargebacks later.
• Clearly display your shipping policy. Make it accessible on every page of your website through a link within your header or footer.
• Keep customers up-to-date. You need to track the progress of each delivery and notify customers of any delays. This should be an automated process and you will need to design an email response system to manage these communications.
• Do not provide tracking numbers for deliveries of high-risk products. As mentioned above, criminals have exploited a loophole in the shipping process that allows them to redirect in-progress deliveries, where allowed by the carriers. After placing an order using the legitimate billing and shipping addresses, the criminals use the issued tracking number to redirect the delivery. To limit such fraud, you may consider withholding the tracking number for deliveries involving higher-risk merchandise and higher sales amounts. Avoid doing it for all deliveries, as not providing tracking numbers to legitimate customers may backfire and lead to complaints.

Just as any other policy, an e-commerce shipping policy should communicate that your business is all about keeping customers satisfied and any issues are quickly resolved. If you can do that successfully, you will create a loyal customer base that will do the marketing for you, much like what happened with Zappos. What shipping policy procedures have worked well for you? Share your experience in the comments below.

Image credit: Wikimedia Commons.