How I Learned to Stop Worrying, and Love the Shipping

Back in August, we explored the idea of “free” shipping. We’ve since invested a lot of our time and resources into finding a way to give our customers better value when it comes to shipping, without raising our prices to offer what appears to be “free shipping.” Since August, we’ve blogged about some of the ideas that came from your responses and feedback during focus groups. All the while, we’ve refined our internal processes, explored the cost of implementation of these various options and the resulting benefit to our customers, and settled on what we think are some fair and sustainable revisions to our shipping policy.

Here is a quick executive summary of the recent changes we have made to our shipping policy:

• Daily refinement to our shipping estimator. This feedback process results in the biggest cost savings to our customers.
• We removed UPS Standard as an option for shipping low cost items to Canada. Our Canadian customers got hit with border crossing fees that sometimes exceeded the value of the order!
• We added “We Choose Carrier” in place of ground shipping. We decide at the time of shipment what is in our customer’s best interest.
• We use flat rate boxes whenever possible.
• We issue refund checks when we blow it.
• Removal of 3-Day, 2-Day, 1-Day service options for regions where there is no net improvement in delivery time. For instance, our customers in Washington get 1 day service for all shipping methods, why pay extra for “Next Day” service?

At the time of shipment, our logistics experts determine the most cost effective way to ship your order. Later, we verify what we are charged by UPS or USPS for every package we ship. We compare that to what we charged you. If we were able to reduce the expected cost of shipment considerably then we issue a refund check.

The downside to this is that we spend lots of time refining shipping cost and issuing refunds. Our challenge is to find the right balance between offering the best possible shipment cost and adding overhead which could ultimately raise our prices. Catch-22! For this reason, we have decided not to offer a shipping cost guarantee. It’ll simply cost more to maintain than it’ll save our customers in shipping. You’ll have to trust us on that one, I guess. However, we’ll be happy to review shipping cost with any customer that feels they were overcharged.

We will normally charge a bit more for a package than we get billed by the carrier. Here is what goes into determining this ‘extra’ charge:

• When you pay by Paypal or credit card, we lose 2-3% right off the top. If shipping costs $100, that means almost $3 goes to Paypal before we even get your payment!
• Package insurance usually costs between $1-2 per $100 of order value. Sometimes we elect to self insure on less expensive items that are unlikely to be damaged by UPS (United Parcel Smashers).
• Signature requirement can add $2-4 to shipment cost. It’s necessary to avoid fraud. Paypal, Visa, Mastercard, Discover, and American Express all require signatures in order for us to even have a chance at defending ourselves against a fraudulent charge. And we see fraud, believe it or not, you are not all angels! Guess who pays when there is fraud? You got it, CorkSport.
• International orders take more time to process because of customs declarations and there is a much higher rate of undelivered or damaged packages.
• We make a special trip to the post office every day so that you get parts quicker. If we wait for USPS pickup, you get your parts a day later.
• Infrequently, we have to supply a box to ship your parts in. We don’t factor this in for CorkSport brand parts.

These extra charges amount to $1-5 for most packages and can be as much as $20 for high value international orders. Lower value orders generally have a smaller extra charge while larger value orders often have larger extra charges.

So if shipping cost + extra charges is less than what we charged you for shipping, we issue a refund check. We’ve sent or are about to send out over 100 checks since we’ve started this program. Most of them are because we used a flat rate box or combined multiple items for extra savings. Most of the time we get it right, when we miss, we issue you a refund per the process described above.

Thanks to everyone that has given us their feedback and contributed to this. We hope you like our new shipping policy. As always, we welcome your comments and feedback. We promise to read them and take them into consideration.

– Rich

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