‘Special offers’ can quickly become a cost trap for online customers if the merchant fails to display the additional costs in the checkout transparently. As the following example shows, this can result in dissatisfied customers and a higher number of returned items.
Earlier this year, a news magazine published a report about an irritated young woman from Munich who had ordered a pair of jeans for EUR 59 on the Internet. A few days later, she was surprised when she received an e-mail from the delivery service demanding that she pay an additional EUR 27.24, which included EUR 12.36 for customs duty and a delivery fee of EUR 14.88. This was because the woman ordered the jeans from a British mail-order company just a few days after Brexit had come into force. The EUR 59 ‘bargain’ ended up costing EUR 86. The young lady told the news site, “If I had known beforehand, I wouldn’t have ordered the jeans from that company.”
One reason for the customer’s disappointment was that there was no mention of customs and handling fees in the online shop. From the online merchant’s perspective, this is permissible – although it is not particularly wise because the ‘hidden costs’ not only irritated the customer, it also resulted in a negative press report.
VAT digital package brings more hurdles
Many shoppers who order goods online from a third country, such as the UK, Switzerland, the USA, or China, feel the same way as the customer from Munich. The changes implemented after July 1 as part of the VAT digital package present similar challenges for customers and merchants. After the EUR 22 duty-free limit was abolished, even low-value items must now be taxed. Consumers need to be aware of this and, like the customer from Munich, are surprised when they receive the final invoice. Today’s merchants must be familiar with the correct tax rates and apply them for all EU 27 countries – regardless of the value of the purchased goods.
As a result of the chaotic taxes and fees, prices for products sold in online shops are sometimes displayed incorrectly or incompletely. This is because the shopping platforms can only show the additional costs after providing the delivery address. The added costs need to be more readily transparent to the consumer. This results in significant damage because it negatively affects the trust in the online shop and can increase the number of returned items.
KPMG study shows that correct product information and merchant trustworthiness are most important to users
A recent KPMG study on online shopping showed that customers consider meaningful product descriptions and correct product data to be the key quality criteria for an online shop. Some 30% of those surveyed cited these factors as the most important. Another 20% of the respondents indicated that merchant trustworthiness in delivery and data protection is the second most essential criterion.
The study shows how significant it is for online merchants to display the correct total price of their products. After all, this is part of an accurate product description. And trustworthiness in terms of delivery should include the fact that the item arrives at the customer’s door, duty paid.
