Consumers buying an item from overseas worth more than £135 (€150) will probably have to pay customs duty. Before Brexit, this only applied to goods purchased from countries outside the EU. But now that the UK is out of the EU, shoppers also have to pay the customs duty on goods purchased from EU countries.
According to a 2021 Sendcloud E-commerce Delivery Compass study, 49% of UK users surveyed cited potential payment of customs charges as the main reason not to shop abroad.
But another factor that could be putting your potential customers off is what happens if they return their order. Especially as consumers often don’t realise that if they send goods back for a refund, they are eligible for a refund on the import duty and tax cost. As an example, if a shopper bought a £200 dress from a European or US retailer that was manufactured in China, they would need to pay £40 in VAT and £24 in import duty. If the shopper decides to return the dress they’d be able to claim back £64.
It’s estimated that people in the UK buy approximately £55bn worth of items from abroad, according to data from WPL via ONS in a 2021 E-commerce Payments Trends Report, and the average UK return rate is around 28% – which is a lot of money to claim back!
Unfortunately, while the retailer might process the refund promptly, getting a refund from HMRC is not automatic. Consumers have to visit HMRC to fill in various forms and retrieve endless customs documents before being able to process their refund. All of which can make buying from overseas too much of a headache for many consumers.
While it might not seem like a problem for the retailer, having a good experience with the refund process establishes trust between the consumer and the company. People are also more willing to buy if they understand what will happen during the return process. And finally, if a customer has a positive experience when returning an item, they’re more likely to purchase again in the future. All of which underlines why retailers should care that consumers understand their consumer rights and have a positive experience when getting their refund. If they feel like they’ve lost money when returning an item, it could lead to complaints, even though it’s not the retailer’s fault.
Having clear information on a website about the refund process and the consumers right to reclaim the duty if returning goods is an important first step. But this still leaves the problem of HMRC paperwork, which is the responsibility of the customer. Unfortunately, dealing with HMRC and the whole process often feels like an impossible task for the average consumer, which is where Duty Refunds comes in.
The mission of Duty Refunds is to make international shopping feel local again by streamlining the customs duty return process with their digital solution. Country borders shouldn’t stop people from buying something they want or need. And Brexit shouldn’t result in EU retailers not being able to share their products and brands with a wider audience.
The process is quick and simple. After a consumer has returned the item, they fill in a simple online form that takes less than five minutes where they provide the tracking number and return info. Duty Refunds handles the rest. Once the claim is approved – they’ll get their money back, typically around four weeks with only a flat 15% service fee on the total amount of the refund. No win, no fee. To date they’ve successfully claimed refunds on returns worth over £500,000 and are rated 4.8/5 excellent on Trustpilot.
International retailers can support customers by partnering with Duty Refunds with zero integration cost and even earn commission payments on successful claims every month. Duty Refunds also has a handy calculator that retailers can share with customers for them to work out the upfront customs fee that will be due if they import goods to the UK. Integration with Duty Refunds’ technology takes less than ten days, and they have a 99.5%* claim success rate.
If you want to increase your sales to UK consumers and differentiate yourself from the competition, partnering with Duty Refunds makes complete sense.
For more information on integrating with Duty Refunds as a retailer take a look at the website or email partnerships@dutyrefunds.co.uk
*Claim rate based on an average of all Duty Refunds claims from December 2021 to August 2022
