What to Do If a Package Arrives Damaged—or Not at All9 min read

How many times have you sent out a customer’s package and stayed eager to know their feedback, only to learn from them that it was damaged or didn’t make it to them at all? 

Truly a haunting experience, given that all your efforts to convert the customer have now taken heavy ‘damage’, thanks to no fault of yours. 

But if you think about the scale of these issues, you can clearly see that it is not something trivial. In fact, 7% to 11% of customers’ online orders arrive broken or damaged and close to 50% of Americans had claimed that at least one of their packages was lost. 

Not just the scale. Even the intensity of lost and damaged packages is high for e-commerce merchants such as yourself. Let’s take a look at the consequences to better understand the issues at stake.

Problems a Retailer Faces Due to Damaged and Lost Packages

To understand the seriousness of packages getting lost and damaged, put yourself in the shoes of your customers. They’ve anticipated long enough to collect their order, only to discover that it’s arrived broken or is missing. 

While this is frustrating enough, the situation can turn out to be worse if their purchase is a gift for their loved ones. Such instances can instantly escalate things and infuriate your customers, who might make hasty decisions that can prove to be costly for you.  

The first action a frustrated customer would take in such situations is simply choosing to quit shopping with you, as a result of the bad experience they faced. This in turn can lead to unnecessary costs for your business in the form of:

  • Low customer retention rate (CRR) – Your retention rate is a metric that shows whether your customers are happy doing business with you, to the extent of staying as your customer for an extended period. A good retention rate means to profit from repeat shopping, while a low rate is a harsh truth of you losing money to customer churn.
  • Low customer lifetime value (CLV) – An extension of the retention rate is the customer lifetime value. It is the total amount of money a customer is expected to spend with you during the span of your relationship. When package delivery issues lead to customers dropping out, your CLV can become low or negative, implying that you are spending more on a customer than what you’re getting back from them. 
  • Increased damage to brand reputation – A customer who has decided to end ties with you might not always go unannounced. In most cases, they take their frustrations to social media and tarnish your brand’s online reputation, leading their friends and followers (who can be your potential customers) to avoid your business. On a related note, there are definitive ways to deal with such customer rants, that you can follow to mitigate their angst as well as paint a positive picture for others.
  • Increased costs from order returns and cancellations – When a customer’s order is lost or damaged, it is absolutely fair that they expect you to refund them. But such returns and cancellations which happen due to no fault of yours can lead to severe costs that can lower your profit margin. 
  • Increased acquisition costs (CAC) – The last nail in this coffin is your pining over your efforts to convert the customer after they’ve simply dropped off. While you may briefly consider simply replacing one customer with another, keep in mind that acquiring customers is more expensive than retaining a customer. 

It is natural to think why do you have to stand to lose so much, especially when such issues happen outside your control and cannot be directly linked to you. Know that each purchase made by your customer is for your brand and not for your shipping partner, who works in the background. This makes the onus on taking care of their deliveries, which plays a vital part in the overall customer experience, on you. Thus, you are inclined to take actions that can avoid all of the aforementioned problems.

5 Things to Do If a Package Gets Damaged or Lost