US Customers getting stuck with custom clearance duties at their door?

[Former_Member]

Hi guys/gals!

I'm new on etsy and would like to start shipping orders to US customers, has anyone have US customers getting stuck with custom clearance fee/duties in the past? How would you usually resolve this if it happens?

I did some homework and found CanadaPost Expedited Parcel USA and Purolator Ground US to be the most economical (CanadaPost VentureOne), but will US customers get stuck with custom clearance duties at their door??

Here's what CanadaPost says under it's Expedited Parcel USA FAQ:

7.3
Customs Clearance
Canada Post will provide a presentation of all items to U.S.A. Customs. Issues related to duties and admissions will be the responsibility of the addressee (importer of record).

[toysofthepast]

Hi there :)

I have never had a US customer that has had to pay a customs fee shipping through Canada Post.
(If there ever was a time, they did not contact me which I would assume they would do).

Having never used Purolator, I cannot speak about it with certainty, but would assume that they will charge a large brokerage fee to take items across the border.
That will be charged to your customer at their door.
Something to definitely look into.
I am not sure of their insurance rates either, but they probably do not compare to Canada Posts' rates.

Expedited Parcel through CP automatically includes $100 insurance and you can add coverage up to $1000 for $2.05 per $100.

You will find that most sellers state in their policies/shipping information that they are not responsible for any customs fees/duties their customers' country may charge.

Good luck!

~Holly

[castillejacotton]

I have never had my US customers have to pay customs duty using Canada Post however my items are duty free under NAFA. It is best is you have a custom HS code for your items which is not easy to find the correct HS code.

FedEx and UPS usually charge about a $40 brokerage fee. With Canada Post/US post the brokerage fee is including in the postage price.

[Former_Member]

Thanks Holly & Diane for the prompt replies; I needed some input from experienced shippers and that's exactly what you provided.

I've found the HS code in CP's website and it's dutyfree for my oil paintings, I'll use Expedited Parcel :)

[OohlalaBeadtique]

Hello,

Most of my customers are US. I find shipping to US is faster than shipping within Canada, lol!

Here are my fast shipping tricks :)

I sell jewelry and rosaries, so my products are light and small, hence I ship light packet, unless customer asks for shipping upgrade. Light packet doesn't come with insurance, so if my shipment gets lost (I had over 100 sales and knock on the wood none got ever lost to USA) I'd never get reimbursed by Postal Services.

When I fill out light packet/customs form I declare $0 dollar value as it makes no difference to me, since I won't be getting any money back during potential loss. I mark the parcel as gift and in content description I write "handmade crafts" If I were to write jewelry as contents I'm pretty sure some parcels would never make it to its destination. I guess nobody cares to steel handmade crafts at $0 value :)

Because I declare $0 value, and its a handmade craft "gift" the parcels don't get held up by customs. My customers get their orders fast and they don't have to pay duties in most cases.

However when I have large orders, I find it risky to ship light packet, than I ship Xpresspost.

When I ship Xpresspost to US, I obviously declare value because it is registered mail with insurance. But because it is speed delivery my orders still arrive fast.

I had more problems with shipping within Canada than US. Strange. During Christmas I shipped multiple orders daily, and my Canadian customers would get orders day or two later than my US customers, even thou they were shipped out at the same time. That's Canada Post for you I guess ;)

PS: get free Venture Card from Canada post if you are a seller. It's free and every time you ship Xpresspost or Xpedited within Canada or international you get small discount. Also you get discount on shipping supplies and other things. http://www.canadapost.ca/web/business/ventureone.page


Kvetka

Ooh-la-la Beadtique

[CattailsWoodwork]

If you ship to the US with UPS or Fedex they will get a brokerage fee plus any duty or taxes due upon delivery.

[Former_Member]

I can't stress this point enough - Never ever ever mark the customs form as 'gift' and always declare the value at what the customer paid (minus shipping). By not doing BOTH, you will be falsifying federal documents and could face huge fines/jail time.
The customs declaration form has absolutely nothing to do with insurance so it does not matter whether or not your package is insured, the value must be what your customer paid (in Canadian dollars). You are shipping MERCHANDISE and it has a value.

XpressPost and Expedited (to the US and within Canada) is cheapest through PayPal shipping (paypal.com/shipnow if the customer didn't pay with PP) - it's even cheaper than venture one rates and Etsy's rates.

If the item's value is more than the included insurance, additional insurance through a 3rd party insurer is always cheaper than CP's rate (check out insurepost or shipsurance). You can also insure the cost of shipping as well.

As well, although some items may be 'duty free', the customer may still have to pay their states sales tax and a processing fee even when CP/USPS is used. (duty free is not the same as tax exempt)

I haven't used Purolator often- if I require a courier, I usually use FedEx as I've had great experiences with them. You can call them and talk about brokerage charges, etc.

* side note if you are new to shipping merchandise:
- You are responsible for all lost or damaged items - legally. (Responsibility is not the same as fault/blame)
- If shipping out of country, you should have a disclaimer in your shipping policies (or even in each listing) to the affect that 'Orders may be subject to duties/taxes of your country. It is the sole responsibility of the customer to pay the duties/taxes.'

(experienced former shipper/receiver before Etsy shop owner, one of my pre-Etsy careers)

[castillejacotton]

Well said Lisa. You have made it very clear.

[ASecondTime]

Here is my experience...
I ship almost exclusively by FedEx. I have yet to have any US customer comment on any brokerage fees charged by FedEx on the delivery of their parcel...and one would think if they were charging/collecting brokerage fees at least one customer over the years would comment or complain to me ;) All my US bound packages include a NAFTA document so there will be no duty charges. State or Federal taxes would be applicable, though.

[CattailsWoodwork]

I wonder if it depends on what you are shipping, I have had customers who wanted something sent UPS 3day and they have had to pay brokerage. I know when things come this way with UPS I get nailed..this week I had to pay 60.00 for brokerage and HST on a package delivered to me that had a 100.00 value.

[ASecondTime]

Argggh! UPS is awful to deal with here! Yup...that's their standard $45 fee + taxes...which is essentially what they are charging for their service to collect taxes and do the paperwork. It's crazy! Apparently the workaround to not getting dinged as badly by them is to open an account. I've not tried this theory myself...yet...because I would rather never, ever deal with them ;)

NAFTA info can be found here http://www.international.gc.ca/trade-agreements-accords-commerciaux/agr-acc/nafta-alena/index.aspx?v... It's likely well worth your time to check it out from both an importing and exporting perspective.

[OohlalaBeadtique]

Lisa what do you do when you ship to a third party?

Lets say a Customer buys a birthday gift for somebody and they want you to ship it the purchase to the birthday person's address, and they ask that you don't include packing slip with the product cost, or any price tags. It's a gift and they don't want the birthday person to see the dollar cost.

If you fill out customs form and put dollar value there, than you are placing a price tag on the parcel right there - bulls eye - and the "birthday person" will see a dollar value. I asked at the Canada Post and there is no way for them to enter the merchandise value into the system without using the customs form which is glued directly onto the parcel.

Furthermore the gifter doesn't want the birthday person to pay duties for their gift.

I like to know what you would do in such situation Lisa? :)

[Former_Member]

I do exactly what is required by law - mark as merchandise, declare the actual amount, and send it on it's way. An item someone purchased to send to a third party is still not a gift - money changed hands, a transaction took place so it's still merchandise.

Of course, as soon as the order comes in with such a request, I contact the customer and let them know that since shipping is from Canada I am required to do the above, however, I would be happy to include a gift note for the recipient.

Not a single customer has cancelled or been upset, nor has a single order been returned because I legally filled out the forms. Most say 'oops, I didn't realize you were in Canada - no problem and thanks for letting me know."

A customer's convenience or lack of knowledge concerning international shipping is not worth my shipments being confiscated, losing my business, my livelihood, fines, or jail time.

[Former_Member]

Oh, the other option if a customer is dead set against a third party finding out the value of the order is to suggest to send it directly to the purchaser and, once they receive it, they can repackage it and send it to the recipient themselves.

I've never had anyone actually go with that option, but it is still a legal option.

[OohlalaBeadtique]

From the sounds of it, you and I have competently different size of revenue. While I make few occasional sales from my home made crafts and I fall under small supplier category, you seem to have a BIG revenue that supports your entire livelihood, and falls into completely different category - small business. Both categories differ when it comes to several laws and regulations like mandatory HST registration, licenses, insurances, and so on.

We also seem to come across completely different clients. In the past I had a policy where I refused to ship to a third party for other reasons which are not relevant to this conversation. I suggested my customers exactly what you said above to repackage and reship.

My customers responded that it would take too much time and it would cost too much money. Some right out flat refused to purchase, others tried bargaining with me, wanting me to lower my prices, because of the double shipping cots they will have to endure.

In all cases I always lost business and sales, except for one single customer.

I don't seem to have such luck as you finding customers who comply with sellers demands, and go by motto "seller is always right", rather than "customer is always right". :)

[Former_Member]

Revenue and business classification doesn't have anything to do with it.
As soon as ANY amount of money changes hands, it IS a business transaction - a single person, small supplier, hobbyist, small business, or corporation, ALL have to follow the same basic import/export rules.

(For the record, I am a small supplier. Yes, my shop is my part of our family's income but it far from supports my whole family)

Our clientele may certainly be different but it may be more the relationship between buyer/customer that may have a greater impact on the outcome.

Although it is certainly up to every shop owner to run their business as they see fit and take whatever risks they like, laws are not optional. Breaking laws certainly should not be advised to new or inexperienced shop owners, especially when the risks are enormous.

Refusing to falsify federal documents is not a 'seller demand', it's the law - it should never be up for debate.