• The eternal theme of online retailers is "undelivered packages", i.e. packages that we send to customers, but for some reason they decide not to pick them up.

Based on practice and more than 320,000 sent packages and 27,000 undelivered packages worldwide as part of our online sales, we will try to answer the questions:

• • What is the expected proportion of unreceived packets in relation to all sent packets?

• • Why don't customers pick up the package they ordered?

• • How can we prevent or at least reduce the number of unreceived packets?

• • What should we do with customers who repeatedly order from us but never pick up?

• • Can I pass on the cost of an undelivered package to the customer?

• • Is simply canceling cash on delivery the best solution?

• • 2 special tricks you might not know yet!

What is the expected proportion of unreceived packets in relation to all sent packets?

The percentage of unclaimed packages depends very much on the country to which you are sending, the method of payment, the type of item, the method of informing the customer and the delivery service.

Na splošno veljajo naslednja pravila:

• • In countries where online trade is less developed, a higher percentage of unclaimed packages is to be expected, while in developed countries it is lower. It is also related to the fact that in developed countries, customers no longer use cash on delivery, which has the greatest impact on the number of unclaimed items. In the EU, the countries with the highest percentage of undelivered packages are Romania and Italy. Some merchants also report 30-40% of unclaimed packages. The "best" countries in this regard are countries where everything is paid in advance and COD (cash on delivery) practically no longer exists, such as e.g. in Germany. There, the share of unclaimed packages is usually around 1-2%.

• • The majority of unclaimed packages occur with cash-on-delivery payments, as there the customer is not "in fear" of being financially harmed in any way due to non-collection, and at the same time, pre-payments are mostly used by buyers who are used to online purchases, who know what to expect even after the purchase.

• • The amount of unclaimed parcels is related to the type of item, where among those with the highest % impulse purchases of smaller values lead, while on the other hand, among the least frequently unclaimed, we find essential goods of higher values (e.g. washing machines, dishwashers, etc.). This is also related to store websites, where those who target impulsive buyers pursue only one goal - to close as many sales as possible. Such customers often forget that they have ordered something or do not know how and when the item will be delivered.
    

    Selling online is a business. If you want to be a smart and prudent entrepreneur, don't act on your emotions but trust statistics and analyses. Don't cancel cash on delivery just because "you think it's right" but test what you lose

Aktivno obveščanje je ključ

• • Več obvestil kot kupec prejme o svojemu naročilu, manj je možnosti, da ga ne bo prevzel. Tu v prvem koraku veliko zavisi že od dostavne službe – ali ta obvesti kupca po sms-u in e-mailu dan pred dostavo in na dan dostave. Ali mu na dan dostave pove časovno okno, v katerem lahko pričakuje paket in kako široko je to časovno okno (v kolikor je zelo natačno, npr. 1-2 uri, obstaja večja možnost, da bo kupec paket prevzel, kot pri nenatančnih časovnih oknih, npr. 8 ur, saj kupec ne more cel dan čakati na isti lokaciji). 

  • Na odstotek prevzetih pošiljk močno vpliva tudi dejstvo, ali dostavna služba kupca tudi pokliče, ko se nahaja na njegovem naslovu, ali pa zgolj pozvoni na zvonec/domofon. Dodaten korak lahko vpeljejo trgovci sami, ki kljub obveščanju s strani dostavne službe vpeljejo še lastno obveščanje in kupca obvestijo kdaj so zapakirali njihov paket, katera je sledilna številka in sledilna povezava za paket, ter ga ažurno obveščajo o pričakovanem datumu dostave oz. mu ponudijo pomoč, v kolikor zaznajo, da kupec med prvo dostavo paketa ni prevzel.

Kvaliteta dostavnih služb

• • Some delivery services traditionally have a higher number of undelivered packages because they leave the packages in their branches, parcel machines or parcelshops instead of at the delivery address. Therefore, before choosing a delivery service, it is very important to check whether the delivery person (the last person in the entire chain of online shopping) is allowed to leave the package in such locations without the customer agreeing to it in advance. Avoid this, despite the fact that the delivery services will convince you that this is a great solution for the customer. Parcelshops and parcel machines are an excellent solution for those customers who want to use them on purpose. However, if someone is expecting a package at their address, but receives it at a parcel machine a few kilometers away, there is a high probability that the package will not be picked up.

• • The expected share of unclaimed packages is therefore between 5% and 15%, depending on all the above factors. If you have less than 5% of unclaimed packages, you don't need to worry, but if the number of your packages is above 15%, it is probably possible to improve this number.

Zakaj stranke ne prevzemajo paketov?

Tekom našega sodelovanja s fulfillment centrom Warehouse.si we often conducted surveys in countries with a higher percentage of undelivered packages and called customers who did not collect the package in order to get answers as to why this happened. It is usually for one of the following reasons:

• • The delivery man did not call the customer and simply assumed that no one was at the address.

• • The delivery person couldn't find the address/bell, so he wrote that it was the wrong address.

• • The customer changed his mindbecause he ran out of money in the meantime, or he read on the Internet that this product is not right for him.

• • In the meantime, the customer found the same product more favorable and decided not to take the first (more expensive) one.

• • The customer has a package delivered to a parcel machine/parcelshopand does not want to collect it, as she ordered it to her address.

• • During the purchase, the customer did not pay attention to the other costs (delivery costs, insurance of the package, etc.) and as a result does not want to pay the entire cost when taking over the parcel..

We have noticed that it is mostly a shared fault between the delivery service and the buyer, usually this happens with buyers/deliverers who are not flexible (e.g. the delivery person does not want to enter the building and wants the customer to reach the road, but the customer resists and does not collect the package ).

Determining the reasons is also quite time-consuming, and in addition, many buyers do not want to admit their own mistakes, so the answers are questionable. Therefore, we recommend checking the reasons only if you have a really high above-average number of undelivered packages and you suspect that most of the fault lies with the delivery service (you will not change the customers' habits).

How can we prevent or at least reduce the number of unreceived packets?

• • Introduce all possible ways of notifying the customer that exist - sms, email, Viber and call before delivery. Each notification will reduce a certain % of unclaimed packets.

• • Send packages regularly every day (if you can't do this, we advise you to send through fulfillment centers like Warehouse.siwho will pack and send all your packages daily, regardless of location). It has been proven that every day "delay" raises the % of unclaimed packages.

• • When deciding on a delivery service, do not look at the base price of the package as the only factor in your choice. Check with merchants from the same industry and country what proportion of unclaimed packages they have with certain delivery services and take this into account in your calculation before choosing.

•  

The calculation is quite simple:

I send 100 packages a day, the average basket is 30 euros. I choose between delivery service A, which offers me €3/package and has 10% of unclaimed packages, and delivery service B, which offers me €4/package and has 5% of unclaimed packages.

Monthly number of packages: 3000

Monthly cost of delivery service A: €3000 * €3 (+ €300 * €3 because 300 packages will be returned) = €9900

Monthly turnover of delivery service A: 2700 * €30 = €81,000

Strošek dostavne službe B: 3000 * 4€ (+ 150 * 4€) = 12.600 €

Promet dostavne službe B: 2850 * 30€ = 85.500 €

Roughly speaking, in this theoretical example, we could conclude that despite the much more expensive delivery price (€4 instead of €3), it makes more sense to choose delivery service B, especially if we have products with a high margin, since we will cover the entire price difference due to fewer unclaimed packages ( not to mention that we will also have a better quality delivery service and, as a result, more satisfied customers, fewer complaints, bad reviews, etc.).

What should we do with customers who repeatedly order from us but never pick up?

We have to disappoint you - due to the GDPR, it is officially forbidden to create any lists that traders would like to share with each other and warn about "disputable customers". But no one prevents you from making the logic that suits you in your system, e.g.:

• • Toleranca za 1 neprevzet paket

• • After the second unclaimed order, disable cash on delivery orders for the customer and offer them one of the other payment methods (credit cards, paypal, pre-invoice). In order to optimize time, this process can be automated - the system can search for such orders via phone number and/or email, and if there are several undelivered packages, an email is automatically sent to such customers explaining the situation and offering an alternative payment option.

• • If you have few customers, you can of course also solve such cases personally and, based on a conversation with the customer, decide whether or not he has adequate arguments for packages that have not been received in the past.

Can I pass on the cost of an undelivered package to the customer?

In principle, this is not allowed or you will most likely have to explain your decisions to the market inspection. You can introduce some "penalties" into your terms and conditions for customers who intentionally cause you costs, but before doing so, consider the following:

• • How will you explain to the market inspection that non-receipt of the package is not a "decision to return the package within 14 days without the need to give a reason". Namely, the inspectors with whom we were in contact are mostly of the opinion that with this the buyer clearly expresses his intention that he does not want the package.

• • How will you claim the buyer for those €5-10 costs that he caused you by not picking up the package, if we take into account that this happened with cash on delivery? Are you going to sue him? Probably not.

• • How much is your time worth and how much time will you spend arguing with such a customer, sending invoices and convincing them that they have to pay for the return of the package (and the whole thing will probably still be unsuccessful, because the buyer will not pay, and you will have no real leverage , to force him to do so).

We know that it is difficult with such customers. We know that sometimes your heart aches or you are really angry with them because you spent a lot of your time and effort to package the package and make the product. We know that sometimes your ego hurts because they act condescending towards you. But we have to accept that this is part of the business and work with these customers in a different way - so that we spend as little time as possible with them and disable them from doing us harm in the future. Any kind of arguing with them will probably only lead to them intentionally causing you additional damage with some bad public review.

It's not worth it.

Is the best solution to simply cancel cash on delivery (COD)?

We guarantee that this is the worst possible solution to this problem. Let's just take our local market as an example.

Abolishing COD in a country where buyers publicly let it be known that 60-70% of them want to pay with COD is a sales suicide. Of course you can do this, but you will save some 10 or 100€ on unclaimed packages, but at the same time you will lose 30-50% of the total traffic.

You have to accept that your products are almost certainly not so urgent and unique that you will convince all 70% of customers who want to pay cash on delivery to suddenly pay by card because you forced them to.

Pogosto slišimo tudi teorijo “smo ukinili COD in prodamo isto kot prej, tako da se sploh ne pozna” . Ta teorija je žal popolnoma napačna in popolnoma napačno merjena. Ker ne delate pravilne primerjave v času (da bi npr. nekaj časa pol kupcev usmerjali na trgovino, ki ima omogočen COD in pol kupcev na isto kopijo trgovine brez COD) ne upoštevate dejstva, da na prodajo vplivajo tudi drugi faktorji. 

Če ste torej ukinili COD in še vedno prodate 50 paketov na dan kot pred 2 leti zgolj zanemarjate dejstvo, da bi z vključenim COD verjetno prodajali dvakrat več kot prej.

We cancelled cash on delivery because customers who don't pick up packages get on our nerves.

For consideration: There are probably around 1-10% of such customers. On the other hand, with this you have achieved that you, as an online store, are now getting on the nerves of 60% of customers who also want to have the choice of cash on delivery. Is this really a smart business move - to punish 60% good customers because of 10% of bad customers?

Don't cancel the COD payment method for the sake of those 5-10% unclaimed, if you even have that many. Take a breath and analytically judge/calculate how much this is actually costing you, how much it's costing you in time, and how much it's costing you if you only lose 20% traffic because you're going to turn off COD in anger.

Enostavna matematika

For those who do not like mathematics or statistics, let's do another basic calculation (without taking into account the other parameters, which are not important for the display of logic):

A merchant sells 30 packages per day and has 10% unclaimed packages. The average purchase value is €30. Postage costs €4.

In such a situation, his monthly income is (30 daily packages * 30 days * €30) – (90 unclaimed monthly packages * €4 for returning unclaimed packages) – (90 unclaimed monthly packages * €30 package value) = €27,000 turnover – 360 € - €2,700 = €23,940

If a merchant decides to stop COD payments and thereby bring the number of unclaimed to 0, while losing only 20% of customers due to this (which would be very positive, considering the fact that 60-70% of customers want to pay with COD) his proceeds were as follows:

(30 daily packages * 30 days * €30 package value) /1.2 = 27000 – 5400 = €21600

So, in a very optimistic situation, the merchant did damage for more than €2,000 per month (or €24,000 per year) simply by canceling the COD payment method, even though he has no more unclaimed packages. If you want, you can of course calculate what it means if he loses 30-50% of his customers.

2 special tricks you might not know yet!

I've decided to give you two more tricks that you may not know yet and that can help you stop worrying so much about unclaimed packages.

Trick 1: 

Dostavne službe se zavedajo problematike neprevzetih paketov in pogosto med pogajanjem (klikni in preberi ta članek) okoli pogojev komunicirajo, da so v tem najboljši in praktično nimajo neprevzetih paketov. Izkoristite ta trenutek pogajanja in se spogajajte za klavzulo, po kateri so vam neprevzete pakete dolžni vrniti brezplačno. Imate dober argument, saj so vam ravnokar trdili, da boste imeli minimalno število neprevzetih artiklov, torej jim to ne bo povzročilo nobenega resnega stroška, če ta njihov argument drži. 

V kolikor to ne bo uspelo, jim podajte višino neprevzetih artiklov, ki je za vas sprejemljiva (npr. 3%) in karkoli je več od tega, se vam na mesečnem računu ne zaračuna. Lahko vam povemo, da smo točno na tak način z določenimi dostavnimi službi dogovor dosegli tudi sami. Če nič drugega, boste na tak način vsaj na licu mesta dobili odgovor ali tržnik dejansko verjame v to kar govori, ali pa vas je zavajal s prodajno zgodbo, za katero noče stati.

Trick 2: 

Delež COD paketov lahko poskusite znižati na bolj “mehek” način kot s popolno ukinitvijo. Vedno več trgovcev za COD plačila zaračuna dodatno plačilo 1-2€. Torej COD naročila ohranite, a tiste kupce, ki jim to ni tako pomembno prestavite na ostala (vam bolj ustrezna) plačila, ostalim pa še vedno omogočite COD z doplačilom. To doplačilo gre direktno v vašo maržo in z njim morda lahko krijete strošek neprevzetih paketov + izgubo kupcev, ki ne bodo želeli ne plačati z drugo metodo ne doplačati za COD. 

Vsekakor pa je to spet zadeva, ki jo morate stestirati (idealno kot prej omenjeni A/B test, kjer istočasno pošljete 50% kupcev na obstoječo trgovino s COD brez doplačila in 50% kupcev na kopijo trgovine, kjer se COD doplača. Spremljajte izbiro načina plačil in izračunajte koliko ste pridobili s COD doplačilom in koliko ste izgubili zaradi (hipotetsko) slabše konverzije na strani).

Conclusion

When thinking about unclaimed packages, first take a deep breath. Be aware that we all have such buyers. If you have 5-15% of them, you have a similar number as the rest, but if you have less than 5%, you can actually be happy. Do everything above to reduce this percentage, but don't bother if you don't get to 0%. It's part of the business and factor that cost into your margin.

If you have any questions about this topic or need help with logistics or daily shipping of packages and reducing the number of undelivered packages, please contact us and we will be happy to help you.

Damir Vidan
CEO
OnlySales.si