Mistakes in orders can frustrate merchants and customers. Ensuring that the shipped product, invoice, and customs clearance documents are correct is crucial. Customs authorities disapprove of discrepancies and may impose fines if the documentation does not match the actual contents of the shipment. These discrepancies are known as "overages" and "shortages."
Overage: When the quantity of units received exceeds the amount stated on the export shipping documents.
Shortage: The quantity of units received is less than the amount stated on the export shipping documents.
Discrepancies on the commercial invoice impact the accuracy of duty and tax calculations. The commercial invoice includes a declaration stating that the information provided is accurate (e.g., "I hereby certify that the information on this invoice is true and correct, and the contents and value of this shipment are as stated."). Therefore, it is essential to verify the accuracy of the commercial invoice before shipping.
Correcting Item Shortages
If a customer reports a missing item, compare the sales and commercial invoices for inconsistencies. Any differences could mean incorrect duty and tax charges. If you choose to send a replacement item to fulfill the order, follow these steps:
Ensure the commercial invoice for the replacement shipment includes the commodity, description, harmonized code, and replacement value (every item must have a value, even if the customer is not charged).
Include a note indicating that the value is a correction for an earlier shipment error, specifying the original shipment date and tracking number.
Correcting a Product Shortage for Customs Declaration
Most carriers offer a duty and tax dispute form to correct a commercial invoice post-clearance. This process can be time-consuming. After submitting your form, the carrier will forward it to Customs and inform you whether the dispute is accepted and if a refund will be issued. For DDP shipments, refunds go to the customer from the merchant; for DDU shipments, the carrier refunds the customer (details vary by carrier and country).
Correcting Item Overages
Handling Product Overages for Customers
When excess products are sent to a customer, you can either let them keep the extra item at no charge or have them pay for it. Returning a low-value item internationally might not be cost-effective. Duty and tax are based on the quantity and value stated on the commercial invoice. Verify if the invoice reflected the total amount of the product or if the value was understated.
If an order was placed with the wrong shipping address, follow these steps to correct the issue:
Cancel the Existing Order:
Cancel the order with the incorrect address.
Place a New Order:
Have the customer place a new order with the correct shipping address.
Refund Overpaid Fees:
Refund any overpaid shipping fees, duties, or taxes from the canceled order according to your standard refund process. Placing a new order ensures that the correct shipping method and taxes/duties are applied automatically.
Correcting a Product Overage for Customs Declaration
Use the carrier’s duty and tax dispute form to adjust the commercial invoice for an overage. The carrier will submit the form on your behalf. There is no guarantee that Customs will accept the post-entry amendment, and the process can be lengthy.
Refer to the relevant country's Customs website for specific product overages and shortages procedures. Refunds for duties, taxes, or shipping fees from canceled orders should be processed as per your standard refund policy. Ensure that all overpaid amounts are accurately calculated and returned to the customer.