You can almost picture it: your customer has impatiently been refreshing the tracking information on their package for days now. It should have arrived already, but it hasn’t. Will there be an angry email? A negative Yelp or Google review? Will they put your company on blast on social media?

J.F. Heat Treating, Inc., a provider of heat treatment in Gastonia, NC, recently ran into this very situation. Our package just never made it to the customer!

When a package is lost in the mail, who’s liable? As a small business owner, a lost order can seriously cut into your profits. Smaller businesses often have fewer resources, especially time—and time is money. On the other hand, keeping your customers happy and coming back for more is the biggest priority.

As a seller, you’re responsible for the package until it reaches the buyer. Yet you have a disappointed customer who claims the package never arrived. What should you do?

Package Status

One clue as to who will be liable for replacing or refunding the order is to check the tracking. If the tracking information says “delivered” or “notice left,” your job is done—the package is considered to have reached the buyer.

However, if the package never reached its end destination, it’s considered lost. That means it’s still your job to provide the customer with a refund or replacement. Before you jump to send them another product, though—especially if it’s one-of-a-kind or handmade—there are a few things you can do:

• Keep in contact with the buyer: This is a crucial time to keep the lines of communication open. All your customer knows is that they ordered something, spent their hard-earned money on it and it didn’t show up. By proactively taking charge of the situation and handling it with a friendly, calm demeanor, you can reassure the customer that their satisfaction is very important to you.
• Wait a few days: When you’re discussing options with the buyer, “waiting several days” should be at the top of the list. Sometimes packages are improperly scanned or sorted, causing delays. Sometimes they get misdelivered to neighbors. It’s entirely possible your lost package will still show up!
• Reach out to the shipping carrier: Along with reaching out to the buyer, you should also contact your shipping carrier. Make sure you have the tracking number, proof of purchase, proof of value and insurance (if purchased) for the package. At this point, you can file a claim with the shipping company.

Tips for Reducing Liability

There are a few things you can do as a small business owner to reduce lost package liability:

• Buy insurance and tracking: For smaller items, purchasing insurance might not make sense—but for larger and one-of-a-kind items that would financially hurt to replace, make sure you insure them.
• Update your shipping policies: You can always make a “terms of service” caveat, especially when selling online. This can be as simple as “Seller is not responsible for lost packages and will not refund or replace.” It’s smart to make the customer acknowledge these terms by having them check a box or otherwise show they understood your terms.

J.F. Heat Treating Inc. is your local professional metallurgical and heat treatment company in Gastonia, NC. We’re a small business that cares about our customers—reach out to us today for more information about our services.