Replace lost packages for free to improve customer experience at a neutral cost

Replacing lost packages may seem like a steep expense — and upfront, it can be. But the revenue retained from repeat purchases and loyal customers is well worth the cost.

Who does this? Jaxxon

Why implement this tip? The merchants we surveyed estimate that 0.25% of their packages get lost.

If you charge the customer to send a replacement, likely, the customer won’t come back. If you replace the product for free, they just might.

Assuming a 30% gross margin, you’re essentially spending the cost of goods sold (COGS) amount for this customer to come back. Assuming there’s a 40% chance the customer will come back, you’re paying the COGS amount of the product for a future profit of 70%. This is roughly net neutral for your business and creates a positive customer experience.

How to implement this tip? Each time a customer reaches out to you for a lost package, make them fill out a quick form with their name, the item(s), and the amount spent. Nothing else. Then, set up a flow that re-sends the package to the customer. Don’t worry too much about fraud: because people have to identify themselves, fraudsters will abandon at this stage.

If you are still worried about fraud risk, you can leverage an insurance product like Route.

📚 Get more context and in-depth tips in our article on dealing with lost packages in ecommerce.