Inside this article
Shipping damages can be a significant concern for online stores and businesses involved in shipping goods.
Damaged items lead to financial losses, customer dissatisfaction, and even a reputational crisis.
By understanding and addressing this issue proactively, online stores can reduce the amount of product damage during shipping, enhance their delivery experience, minimize losses, and maintain customer satisfaction and loyalty.
What is a shipping damage?
A shipping damage is any form of physical harm or impairment that occurs to goods or products during transportation or shipping from one location to another.
Damaged packages can be a product of different mistakes during the shipping process, including loading, unloading, handling, or the shipping itself. The causes behind shipping damages and the solution to solve them or prevent a delivery exception are various.
7 Causes of shipping damage
Shipping damage can result from several factors, causing dents, scratches, breakages, cracks, water damage, deformation, or even complete destruction of the product. These are some of the most common causes of shipping damage:
1. Inadequate packaging
Insufficient or improper packaging materials, such as weak boxes, thin materials, inadequate cushioning, or insufficient protection for fragile items, can increase the risk of damage during transit due to weather conditions or falls.
2. Environmental factors
Even when some measures are taken, extreme temperatures, humidity, or other environmental conditions can cause damage to certain goods, especially those related to food, medicine and cosmetics.
For example, extreme cold can lead to freezing and cracking, while excessive heat can cause warping or melting.
3. Insufficient labeling
Inadequate labeling or missing or unclear instructions on handling fragile packages leads to mishandling, increasing the risk of shipping damage to occur.
4. Careless handling
Shipping personnel, whether during loading, unloading, or sorting, can be careless when handling the parcels, leading impacts, drops, or collisions that cause damage to the shipped goods.
5. Improper stacking
As couriers stack parcels to make the most out of the volumetric weight of their vans, the packages underneath may get crushed due to the weight of those on top of them.
6. Customs and border control
Part of the international shipping process is to inspect the goods to account for the eligibility and tax obligations. During the customs clearance, parcels may be opened and handled, leading to potential damage from that point onwards.
Impact of shipping damages on the eCommerce business
Shipping damages mainly result in financial losses and a reputational damage for the online store shipping the item, but there are some other key consequences:
1. Customer dissatisfaction: Receiving a damaged item causes dissatisfaction and disappointment in the customer. More than that, it reflects poorly on the online store's reputation and can lead to negative reviews, decreased customer loyalty, and potential loss of future sales.
2. Increased customer service cost: As the number of shipping incidents due to damage increases, so will the workload of the customer service department: complaints, returns and exchanges, refunds…
3. Financial losses: The cost of replacing or repairing damaged items, covering return shipping costs, compensations and discounts can impact the store's profitability. Additionally, the cost of handling shipping damages increases operational costs (not only shipping-wise, but also when it comes to producing new items and dealing with the support claims).
4. Inventory imbalance: Managing damaged inventory can be challenging for an online store. It may result in inaccurate inventory records, leading to issues with stock availability, order fulfillment, and overall inventory management. Moreover, fatal shipping damages may result in one-time sales with two products leaving the premises and only one being paid.
5. Resources to solve issues: Coordinating with couriers, investigating claims, sending new products, arranging repairs and handling returned items diverts resources from other important business activities.
6. Damaged brand image: If shipping damages become an usual topic on reviews and social media accounts, the trust in the store's ability to deliver quality goods can be considerably harmed and potential customers will be deterred from making purchases in the future.
To reduce the number of shipping damages as much as possible and, when they happen, mitigate their effects, online stores should put in place a series of measures to protect the products and ensure a smooth delivery experience.
6 Steps to prevent shipping damages
Preventing shipping damages is crucial for online stores and businesses involved in shipping goods. Here are steps to be taken to minimize before the goods are actually damaged. Preventative measures:
First Step: Minimize package damage with sturdy packaging
Investing in high-quality packaging materials that protect the products while keeping costs under control is a necessary decision in those businesses that don’t want to leave anything to chance.
From boxes to cushioning materials and strong tape, these are all indispensable parts of a successful delivery experience.
For extremely delicate or valuable items, consider placing the ready-to-ship box within another box, with appropriate cushioning, as the first box and layer of cushioning will absorb most of the impacts.
Second Step: Avoid the most common types of packaging damage
One thing is to pay the price of high-quality packaging materials and another thing is to pack the items wisely and use the packaging materials as they are intended to.
Utilize the space to place products in a way that prevents them from moving and bulbing around the box. For that, choosing the right size of the box is the first step, as it will decrease the amount of padding needed and reduce shipping costs.
Third Step: Signalize the need for special care
Clearly labeling packages with handling instructions, such as "Fragile" or "Handle with Care," it’s a visual and fast way of alerting shipping personnel on the fragility of the products inside the parcel.
By using labels, stickers or stamps to indicate specific requirements or warnings, you will be able to drastically reduce the number of broken items that get delivered to your customers’ doorsteps.
Fourth Step: Work with professional courier companies
Research and select couriers that are well-known for their careful handling and reliable delivery. For that, take into account factors such as their track record, handling procedures, and customer reviews.
Mitigation measures:
Fifth Step: Implement an effective tracking system
Utilizing the different tracking services provided by couriers is extremely inefficient, especially when several couriers are in use.
For that reason, centralizing all shipping information in a single hub speeds up operations, but also brings internal information and communications, stopping the dependency on external parties.
Outvio can do that and more! As it also automatically notifies you when something goes wrong with a parcel, or even before it goes wrong, so you can minimize shipping damages and provide the best delivery experience to your customers. Try it now.
Sixth Step: Analyze customer feedback
Prepare customer surveys to gain insights on their feelings on the packaging and condition of received items. Then, analyze this feedback to identify recurring issues and areas of improvement.
Regularly evaluating your packaging and shipping processes and staying updated on best practices in the industry will keep shipping damages to a minimum.
Liabilities: who is responsible for the damage?
Determining the responsible party in the case of product damage depends on various factors, including the terms of the shipping agreement, the nature of the damage, and applicable laws or regulations. Overall, these are the key parties that typically bear the responsibility:
The retailer
As the sender, the retailer is ultimately responsible for the customer.
But, apart from this, the online store is typically the party in charge of the packaging process, where most of the mistakes are done and when most of the measures to minimize damages need to be implemented.
The courier
If the shipping damage is due to mishandling, negligence, or failure to adhere to industry standards and regulations during transit, the liable party is the courier.
The 3PL
If the online store or retailer outsourced the packaging process to a third-party logistics solution, and the damage can be directly linked to faulty packaging materials or inefficient packing methods, the 3PL is the responsible agent.
However, when facing the customer, the online store or retailer is the one dealing with the buyer, never the 3PL.
Customs authorities
As part of the customs clearance process, some products and parcels may get damaged beyond usage or need of repair. In this case, customs agents will bear some of the responsibility, when it was unjustified or mishandled.
However, the sender also bears some of the responsibility, as they are in charge of providing the right documents and as much information as possible to minimize shipping damages.
At customs, destroyed packages can be a result of misleading information or unlawful practices.
To determine the responsibility of a shipping damage, the circumstances surrounding the damage need to be assed, contractual agreements reviewed and legal action may be needed. Luckily, as the parties mentioned above are professionals in the field, there tends to be insurance coverage to protect and compensate for shipping damages.
How to handle shipping damages
Once the shipping damage happens, it is important to take prompt and appropriate actions to address the issue effectively. Here are some crucial steps that you can’t miss:
Document the damage
As much as you want to prevent and minimize shipping damages as a retailer, it’s fundamental to state clearly what to do in case of receiving a damaged parcel as a customer.
That is, taking pictures or videos of the parcel as soon as the customer notices a flaw or damage on the package. These documents won’t only be used internally, but may be requested by other parties such as shipping insurance companies, couriers, 3PLs, etc.
Contact the courier
Once you receive the claim from the customer, the next step is to assess the responsibility of all the parties involved in the delivery process. Being the last party involved the courier, that’s where you should begin, as any other party involved in the process would have claimed an issue with the package before passing it onto the next agent in the chain.
Provide the courier with all the relevant information, such as tracking numbers, shipment details, and documentation of the damage and follow their instructions for filing a claim or initiating the resolution process if they were indeed responsible for the damage.
Review your insurance policy
If you have shipping insurance, or any of the parties have, review your policies to understand the coverage and claims process. In this way, claiming compensation and filing a claim is easier and faster. Most likely, they will require documentation and proof of the damage, which is why the first point is crucial to handling shipping damages overall.
Communicate with the customer
As an online store or retailer, remember that you are ultimately responsible for the delivery experience.
In this sense, the customer is always expecting news from your side. For this reason, promptly informing the customer about the shipping damage and how you plan to solve the issue is fundamental to their satisfaction.
Apologize for the inconvenience caused and keep them updated, offering options for replacements, refunds, or exchanges based on your store's policies.
Arrange the return of the products
Study the possibility of having the items returned to your warehouse or store or set in place an automatic refund to the customer when the shipping costs exceed the value of the purchase.
This is fairly simple to do when you work with companies such as Outvio, that enable retailers to set in place automatic returns and exchange rules that minimize costs while maximizing the customer experience. Try it now.
Assess the need for repair
If you decide to have the items shipped back to you, most likely you considered that the products could be repaired and resold.
Evaluate what would be the cost and offer the repair to the customer or let them opt for a replacement, exchange or return of the product.
Improve the packaging and shipping processes
Analyze the cause of the shipping damage and identify areas for improvement. The reason why parcels and products may be getting damaged could be as simple as using the wrong size of box, not enough padding, a deficient shipping service, etc.
Keep records
Maintaining detailed records of all communication, documentation, and actions taken throughout the handling of the shipping damage is vital when processing a claim, supporting customers and for future reference.
For example you may need this data when analyzing inventory, providing financial data, dealing with a customer that experienced a shipping issue before, terminating a contract or asking for compensation from the shipping company.
Remember, each situation has unique circumstances, but prompt communication, thorough documentation, and a commitment to resolving the issue satisfactorily can help mitigate the impact of shipping damages on your business and maintain customer satisfaction intact.
Conclusions
Shipping damages pose significant concerns for online stores and businesses involved in shipping goods.
They can lead to financial losses, customer dissatisfaction, and reputational damage.
The causes of product damage vary, from inadequate packaging to environmental factors, or careless handling. The reasons why they happen aren’t always clear, but how to prevent them and solve them once they happen is.
While couriers and 3PLs may have the actual responsibility behind the shipping damage, for the customer, retailers and online stores are the ones actually dealing with customers and putting their reputations at risk.
By understanding and addressing shipping damages proactively, online stores can enhance their delivery experience, minimize losses, and maintain customer satisfaction and loyalty.
