What do I do when a parcel goes missing

Today’s question is from Bronwyn, who writes:

Hi Jess,

Long time reader, first time emailer 🙂

For the last 12 months I have operated a (very!) modest Etsy fabric shop.

I received notification last night regarding a sale that was made in late January. Bottom line: the customer didn’t receive it. To keep my postage rates low (and appealing) I quote regular mail in my listings, and offer registered mail upon request. No customers have taken up the extra registered postage, so for most of the time I’ve been in business, I’ve taken a photo of every unregistered parcel that I’ve sent, and the photo shows the customers name, and where possible, the postage stamps on it.

But I find out that this single parcel, out if 50 sales and 12 months of operating does not arrive at the destination.

I lodged an enquiry with Australia Post, but since there was no tracking, not much more assistance they can provide, which means one of two things:

1) I lose, or
2) The customer loses

(Neither of these scenarios are appealing to me.)

What I want to know in this case, has this ever happened to you (in early days maybe)? What did you do (what would you do)?

Should I offer refund less postage (even though I decline responsibility of lost/damaged items in my shop policies)?

Or should I offer replacement (but insist the customer pays for registered post)?

Any advice you could give would really help me out 🙂



Ahh, lost parcels. If you sell online for long enough, I can guarantee that it WILL happen to you – especially if you ship internationally.

It’s definitely happened to me – both locally and internationally – a few times over the years.

This is one area where there are definitely shades of grey, BUT you need to be aware of the rules you are operating under.

First – if your customer has purchased using Paypal, you need to be aware that according to Paypal rules, YOU are responsible for the parcel until the customer is holding it their hot little hands.

What this means is that if the customer opens a dispute with Paypal within (I believe) 45 days of purchase, you can pretty much guarantee that Paypal will find in their favour and refund their money. Tracking or no tracking.

Second – if you’ve sold your item via a venue like Etsy or Madeit, the same rule pretty much applies. If your customer lodges a complaint, chances are the venue will find in their favour and force you to refund them.

Third – even IF you sell on your own site, and the customer pays via direct debit… well. Let’s put ourselves in the customer’s shoes for a moment. If you bought something from an online shop and it didn’t arrive – what would you expect the seller to do? I’m betting you’re thinking that you’d expect the seller to make it up to you – either by re-sending or refunding for the item that never arrived.


Can you see where I’m going with this?

Yes. Long story short – YOU as the seller are responsible for that item until your customer has it. I have to admit I always cringe a little when I read someone’s policies and they state they ‘aren’t responsible for lost parcels’. Because you ARE. You can say you’re not all you like, but it’s not just up to you – when it comes to that particular issue, you’re operating under the rules of the payment gateway (Paypal or Credit Card) and the venue you sell at. Know their rules before you start selling with them.

That means you are going to need to replace or refund for an item that never arrived.

In my mind, the only possible exception to this is when you have sent an item using some form of tracking, your postal service tells you it’s been delivered… but your customer then claims to have never received it. This is where things get sticky.

Either the post office has made a mistake, your customer has made a mistake, or – in very few instances – they’re lying to you. Thankfully, the latter is very, very rare in my experience, and I always give people the benefit of the doubt.

Having a tracked item arrive/but not actually arrive has happened to me (once or twice in my whole business career) I have done my best to help the customer play detective. Ask them questions about the delivery address. Is it possible someone else at that address has the parcel? Did it go into your neighbours PO Box? Could it have gone next door? Is it a place of business and lost in the mailroom? Did you leave it too long to collect the parcel and it’s been returned to sender? Etc. It is worth following this up with your postal service, even so, JUST to make sure they haven’t made an error somewhere along the line.

However… in this instance, I have NOT automatically refunded or replaced the item, because I have physical proof of delivery.

So. When you send without tracking, you are taking the risk that you will be liable to replace or refund. Frankly, I think it’s just good business practice, because the cost to replace or refund one item out of hundreds is pretty minuscule in the long run, and it will result in a customer who will sing your praises, rather than one who will complain about you at every turn.

I personally have a price rule about what items get tracking and which items don’t.

You see – I send the vast majority of my items as ‘large letters’ – both within Australia and internationally – which keeps my postal prices very low. That means they have no tracking. If you sell larger items and ship within Australia, parcel post now has tracking as standard, which is a new and brilliant thing (thanks AusPost!). So, any parcel you send within Australia should be tracked – it’s only when you’re tricksy like me and use the large letter option that it isn’t. Of course, international letters and parcels still don’t have tracking as standard, no matter what size they are.

Therefore – I send all items over a certain value via registered or parcel post within Australia, so I can keep track of them. And yes – the customer pays for this. I simply have a different postage rate for items under that $$ value and items over that value.

Outside of Australia, I don’t include tracking with any orders. The cheapest international tracking option we have here – Pack & Track – is over $20. For the one order in 500 that goes missing, I’d rather charge my international customers $4.50 for shipping and get more sales, than charge them over $20 and lose out on sales to US, UK, or other sellers who can charge a lot less for tracking.

It’s a bit of a risk… but so is every single part of being in business! The trick is thinking about it, and coming to terms with the level of risk you’re willing to take with your shipping. Cheaper shipping options mean more sales… but also no protection for you if things go missing.

I hope this helped, Bronwyn, and I’m sorry to be the bearer of costly news!

Thrivers – I’d love to hear how you deal with the lost parcel issue. Share with us in the comments. 

 Image source: Sylwia Bartyzel

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