Cross-border e-commerce is expected to grow 75% by 2020, International Post Corporation estimates. Yet you might be surprised to learn that only one in four EU-based e-tailers currently sell across borders, according to the EC’s Retailers’ attitudes to cross-border trade and consumer protection report. While the challenges of handling international returns have served as a deterrent for some, it’s reassuring to know that the process is becoming easier as governments , and postal operators are working hard to optimize cross-border e-commerce delivery and returns.
Easy Return Solution
The International Post Corporation, a global network of 24 postal operators, has launched several initiatives to make cross-border returns as easy and affordable as domestic returns. Launched in 2010, the Easy Return Solution allows customers to easily make postage-paid priority returns. This is done through a reliable E-Parcel Group network – an integrated delivery network comprising 31 postal operators. The e-tailer issues a returns label with the items sold, which the consumer can return to designated points like post offices. A track-and-trace service gives peace of mind to both customer and e-tailer, who can monitor and manage returned items and process refunds easily. Watch out for an article arriving soon on monitoring and logging returns and stock/inventory.
EU distance selling regulations
Distance selling rules vary between countries – even across 28 EU member states. For instance, in Germany sellers must pay all return costs for items priced above €40, while cooling-off periods vary, from seven days in the UK and Spain, to 14 days in Germany or Belgium. However, the Consumer Rights Directive stipulates that EU member states must comply with a 14-day cooling-off period from June 2014.
EU customs duties
It’s important to understand your responsibilities in each jurisdiction and monitor the news for changes in customs rules. Across the EU, for instance, customs duties are levied on consumers who return items worth more than €22 to a non-EU state when they arrive back in the source country. Be aware that customs authorities may determine the duties levied on damaged goods based on their residual value. Help your consumer avoid such duties by issuing proof that the item is a return. More than one proof of returns, such as the original customs document or packaging and label, is usually needed.
Beyond the EU, there are no internationally accepted distance selling regulations regarding returns (interestingly, Australia has no cooling-off period at all). Postage costs are also obviously higher.
For customers outside of the EU, retrieving duties/taxies is sometimes complicated or expensive enough – because of administrative fees – to deter them from even trying. Thankfully many countries, such as Canada, are formalizing and simplifying the process for retrieving duties and taxes on returned items.
Do rival e-tailers selling within your target country generally charge for returns? Consumers may not share the cultural expectation of free returns that their counterparts in the US, UK and many other countries have. And consider offering discounts as an alternative to returning faulty goods; some consumers are willing to accept discounts where the defective good is still usable (Aggregate Report, Dec 2009, EC).
Communicating a clear message to the consumer
Because cross-border returns take longer and customs rules vary, you should create a set of terms and conditions specifically for overseas customers (e.g. like ASOS). 68% of shoppers don’t know where to get advice about cross-border shopping (EC’s Retailers’ attitudes to cross-border trade and consumer protection report) so perhaps link from your website to useful resources to help the customer – thereby boosting your credibility. Taking Canada as an example again, you should, during the sales process, flag clearly on your Canadian domain that free returns, with a full refund on duties and taxes, are available and uncomplicated. Issue clear instructions for returning goods with the package and help the buyer prove the return’s status with customs by emailing them a credit note.
With regulatory and financial barriers becoming more surmountable – and between the EU’s 28 member states customs regulations are fairly straightforward – you don’t need to be among the 75% of e-tailers that currently miss out on the manifold opportunities offered by cross-border e-commerce (according to a report of the European Commission) . To name but three: 26% of EU consumers expect to make a cross-border purchase in the next 12 months (aforementioned EC report); the chance to sell in the world’s largest e-commerce region, North America; and opportunities in rapidly growing emerging markets, notably in the Asia Pacific region, projected to overtake North America as world’s biggest e-commerce region in 2014 (estimation from eMarketer).