How Should I Handle Returns From Canada?

April 3, 2023 
|  Passport

To provide the best customer experience, e-commerce brands should offer a clear return policy and the internal logistics to support it. While a ‘No Return’ policy is the easiest route, the money saved might not outweigh lost revenue. An international e-commerce sales experience that mirrors a domestic one creates shopper confidence, conversion, and loyalty.

To return or not to return?

Return management or reverse logistics is more expensive than outbound shipping, so the relative cost of the product needs to merit the processing and shipping costs of bringing it back. For this reason, some brands offer refunds or store credit.

Conversely, there is a growing trend in retail to charge the shopper a handling or return fee. Brands like Zara and Boohoo have moved away from free returns to help offset the logistics costs. Either way, it’s worth crunching the numbers and considering if you really need the inventory. It’s also important to know the total cost, including any additional fees like express carrier accessorials or third-party logistics restock fees.

One of the downsides of e-commerce is the loss of seeing a product in person, which is likely why on average, online brands see a return rate of over 16%, according to the National Retail Federation. For many brands, it’s cheaper for them to absorb the cost of the product than to ship it back. In some instances, this means disposing of or destroying the return, which saves on cost while preventing a return policy that could be abused.

Some have opted for green returns, where the shopper keeps the product instead of the brand either throwing it away or shipping it back, both of which have negative impacts on the environment. Other sustainable methods include selling refurbished products at a discount or donating items to a charity.

How to process return packages from Canada

Robust returns management or reverse logistics processes include:

  • Automatic shipping labels or labels in the box

  • Consolidated return packages shipped in bulk

  • Fast refunds when packages are received by the carrier

  • Option for exchanges or inventory disposition

Can you get duty and tax refunded on returns from Canada?

Canada is one of the few countries that gives shoppers a way to request a refund of duties and taxes paid on an item that was subsequently returned. Through the Casual Refund Program, Canadian shoppers can submit a request directly to CBSA and receive a refund of duties and taxes in 6 to 8 weeks.

Casual Refund Program

When a Canadian shopper returns items purchased out-of-country, the GST/HST, provincial tax, and duty can all be refunded. The stipulations for the program are:

  • For personal purchases only.

  • You must provide proof that the item was returned or refunded.

  • Proof of export and that Canadian duties and taxes were paid on the purchase.

  • The casual refund request is made within one year of the purchase.

  • Customs brokerage fees, carrier handling fees, and shipping charges are ineligible for refund.

How to submit a Casual Refund request

Visit the Canada Border Services Agency webpage to download the B2G CBSA informal adjustment request form. Complete the form, sign it, and send it to the nearest Casual Refund Center along with the requested supporting documentation.

 

Questions about returns? Feel free to reach out to the Passport team at hello@passportshipping.com and we’ll be happy to help!