The costs of one refusal
- Courier charge out.
- Courier charge back.
- Packing and handling.
- Stock held and possible damage.
Example
This is an illustration, not a statistic. Say shipping out and back and packing together cost 140. An order of 9,000 with a fixed 40 plus 1 percent COD fee, capped at 120, becomes 9,120 with the fee. A 15 percent advance is 1,368. If the customer refuses, you have already collected 1,368, which is more than the 140 it cost you. Under the same rules, a refusal costs you nothing.
The floor
Percent advances shrink on small orders. A lowest advance set to your refusal cost makes sure even a small order covers its own shipping.
Try your numbers
Open the calculator, set your own refusal cost and order value, and watch the advance and the cash on delivery split update.
Questions
What should the advance be?
At least what a refusal costs you. Set a lowest advance equal to that cost.
Do these numbers apply to my store?
No. They are an example. Use your own courier and packing costs.
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