Whose delivery is it anyway? Why your customers don’t care where your responsibility ends
A customer orders something from your online store. You pack it and hand it over to your courier. Somewhere along the way, the parcel goes missing.
When the customer gets in touch with you, you explain that the courier is responsible for the delivery, and direct them to take it up with them.
Fair enough, right?
Not according to Australian Consumer Law, in many cases. And not according to new research commissioned by Parcel Protect.
A survey of 1,039 Australians found that while 56 per cent believe couriers should ultimately be responsible for lost or damaged parcels, 63 per cent would think less of a retailer that told them to contact the courier themselves.
It’s an apparent contradiction, and it says a lot about how customers experience online shopping, and what they expect from retailers when things go wrong.
And with Black Friday and Cyber Monday approaching, it’s an issue worth considering now. The same research found that 58 per cent of Australians are concerned about parcels being lost, damaged or stolen during major sales events.
So when a delivery goes wrong, whose problem is it, really?
Key takeaways
- Customers may believe the courier is responsible for delivery problems, but they still expect the retailer to resolve them.
- Australian Consumer Law can require retailers to provide remedies when goods are lost or damaged, and customer expectations often go further.
- A poor delivery experience can affect repeat purchases, customer reviews and brand reputation.
- Insured shipping better places retailers to resolve delivery problems quickly, without passing their customers on to the courier.
How customers see the delivery experience
Most retailers know the concept of market orientation, but it’s easy to lose sight of day to day. Put simply, it means seeing your business from the customer’s perspective, rather than assuming they see it the way you do.
It’s a useful lens for ecommerce deliveries. For a retailer, delivery can involve several businesses, each with its own contracts and obligations. Once an order is dispatched, it’s understandable to see getting it to the customer as the courier’s job.
But customers see things differently, according to Bert Webster, National Development Manager – Distribution at Parcel Protect.
Bert explains.
“They bought the product from you, and you chose the courier. They expect you to make things right for them, then resolve the issue with your delivery provider.”
Bert says retailers can also end up building shipping policies around their couriers’ requirements, rather than their customers’ expectations.
“A lot of freight providers have strict reporting timeframes, for example, so retailers will often write their shipping conditions around those requirements,” Bert says.
“They might tell customers they've only got 24 or 48 hours to report damage. But customers don't necessarily open their parcels straight away, and those timeframes don't always reflect their rights or expectations.”
That can leave retailers with policies that frustrate customers and, in some cases, sit at odds with their legal obligations.
What does Australian Consumer Law say?
Customer expectations aren't the only consideration here. Under Australian Consumer Law, retailers can still have legal responsibilities when deliveries go wrong, including in some circumstances where a third-party courier may have contributed to the problem.
Broadly, these include:
- Damaged parcels: If a product arrives damaged and fails to meet consumer guarantees, the retailer must provide an appropriate remedy, such as a repair, replacement or refund, depending on the nature of the problem.
- Lost or delayed parcels: Retailers must supply goods within the agreed timeframe or, if none was agreed, within a reasonable time. If they don’t, customers may be entitled to a remedy which can be a refund.
Where the retailer has engaged the courier, it will generally deal with the courier separately, rather than requiring the customer to do so.
“The customer has a contract with the retailer, and the retailer has a separate contract with the courier,” Bert says. “If there's a problem with the delivery, it's up to the retailer to deal with the courier, rather than leaving the customer to chase it up themselves.”
These rights apply whether or not the customer has paid for shipping protection.
But there are also situations where the law may not require a retailer to provide a remedy. For example, if a parcel is correctly delivered to an authorised location and subsequently stolen, the retailer may not be legally responsible for replacing it.
Customers may still expect help, though, and the way a business responds can have lasting consequences for the relationship.
When a delivery problem becomes a brand problem
Bert says there’s often a gap between the experience retailers offer at checkout, and the support they provide when something goes wrong.
“Retailers have invested heavily in their brand identity and the customer experience up to checkout,” Bert says.
“They've also developed good processes for returns and exchanges. But lost, damaged and stolen parcels can still sit outside that experience.”
That gap can be costly. Parcel Protect's research found that 32 per cent of Australians wouldn't shop with a retailer again based on how it responded to a delivery issue. A further 44 per cent said their willingness to return would depend on other factors, such as price.
In other words, a poor delivery experience can cost repeat business, and even customers who do return may need a discount or a deal to get them there.
The damage can also spread beyond one customer.
Almost three in 10 Australians (29 per cent) say they would leave a negative review after a poor experience with a lost, damaged or stolen parcel, while another 51 per cent say they might.
But the reverse is also true. The way a retailer handles delivery problems can become a reason for customers to buy.
Parcel Protect’s research found that 93 per cent of Australians consider a retailer’s policies for lost, damaged or stolen parcels important when deciding where to shop online. And 86 per cent would be more likely to purchase from a retailer that covered these risks at no additional cost.
Bert believes many retailers could express their brand promise more clearly through their shipping policies, so customers know what will happen if something goes wrong during delivery.
“Most retailers tend to set and forget their shipping policies,” he says. “They might look at what their competitors are doing or use a standard set of terms and conditions, without giving much thought to how those policies are presented to customers.”
It’s worth reviewing them before the Black Friday and Cyber Monday rush.
What does a better post-purchase experience look like?
Consider two retailers, each contacted by a customer whose parcel has arrived damaged.
The first retailer directs the customer to the courier, or asks them to wait while a case is investigated. What follows could be lengthy delays, requests for more information and uncertainty about whether a replacement is coming.
The second retailer takes ownership of the enquiry, promptly arranges a replacement or refund for the customer, and handles the matter with their delivery provider separately.
For the customer, the difference is obvious.
But Bert acknowledges that resolving delivery issues quickly isn’t always simple.
“Some retailers will just send another item out or issue a refund straight away, but they're absorbing that cost themselves, and losing the sale on the replacement item,” he explains.
“Others go back and forth with the courier to investigate the case. And if they're using two or three different couriers, they might be dealing with two or three different processes, each with their own requirements. They have to remember which process applies or, worse, create an extended process that covers every base, just in case.”
The challenge for retailers is finding a practical, commercially sustainable way to respond to all of these situations.
How insured shipping helps retailers deliver on customer expectations
Insured shipping gives retailers a way to take greater control of the post-purchase experience, helping them resolve eligible delivery problems without leaving customers to navigate courier issues themselves.
With Parcel Protect, retailers can have replacements for eligible lost, damaged or stolen parcels arranged through their own store, protecting the customer relationship while managing the financial impact of delivery problems.
“Retailers spend a lot of time and money acquiring customers,” Bert says.
“When a delivery goes wrong, the last thing they want is to hand that relationship over to a courier and wait days for a decision. Insured shipping allows them to respond quickly and keep that relationship intact.”
Rather than asking customers to buy extra protection at checkout, Parcel Protect covers these risks for them. That’s exactly what 86 per cent of shoppers said would make them more likely to buy.
When something goes wrong, customers open a case through a portal linked to the retailer’s online store, so the process feels like part of the retailer’s service.
Parcel Protect then manages the case on the retailer’s behalf, from initial contact through to resolution, including arranging eligible replacements or refunds.
For retailers using integrated ecommerce platforms, replacement orders can flow back into their existing fulfilment processes, making it easier to get products back into customers' hands.
More than 70 per cent of cases are resolved within a day, without the retailer having to manage a courier investigation.
The customer's experience doesn't end at checkout
The line between retailer and courier responsibility might be clear inside your business, but customers don’t see it that way.
They expect the retailer they bought from to stay involved when a delivery goes wrong. And as Parcel Protect's research shows, how you respond can influence their willingness to shop with you again.
As Bert puts it, “Consumer expectations have to be reflected in the brand experience.”
Insured shipping helps you respond to delivery problems quickly, protect hard-won customer relationships and deliver a consistent experience from checkout to doorstep.
Give your customers greater confidence in every delivery. Get Parcel Protect for your business.
The information in this article is general only and does not take into account your objectives, financial situation or needs. Statistics and other data may come from internal, commissioned or third-party sources. Figures, examples, timeframes and outcomes are indicative only and are not guarantees of future results. Policy terms, conditions, limits, exclusions and eligibility criteria apply. Insurance products are provided by National Transport Insurance, a joint venture of CGU Australia Pty Ltd trading as CGU Insurance ABN 62 004 478 960 AFSL 700014 and AAI Limited trading as Vero Insurance ABN 48 005 297 807 AFSL 230859, and administered by NTI Limited ABN 84 000 746 109 AFSL 237246.