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What is a Concealed Damage Claim

March 3, 2009 By 10 Comments

Concealed Damaged is not as complicated as you think, but it is time consuming and you can potentially lose a lot of money.

As you know, I worked with a large online company and handled many of the shipping to Canada, Mexico, UK and of course throughout the US, including Puerto Rico, Alaska and Hawaii. When shipping abroad the last thing you want to deal with is CONCEALED damage.

Of course you do not want to deal with any kind of damage, but concealed damage can potentially become a nightmare.

I cannot emphasize enough that you must educate your Customer about receiving and inspecting the merchandise. Have your Policies clearly listed on your website, again on the Sale Agreement and for email them a copy upon Order Confirmation. Take the time to pick up the phone and advice them what to look for.

For example if you order a dining table from the States and have it shipped to you in Hawaii. You receive it without inspecting the packaging or without noting any possible damage to the contents. Later find damage this becomes a Concealed Claim. Upon the Customer (Consignee) signing the Bill of Lading you are legally releasing the company from any liability.

Most freight companies will settle a claim and offer to pay 1/3 ( some have lowered it to ¼) which can be a great loss for you and the customer.

Many times the package may have some wear and tear, but when corner appear crushed or punctured, you must take precaution and note it on the Bill of Lading. Failure to do so, will make it very difficult to prove the damage was sustained while in transit and not due to the Customers negligence to assemble it. Many customers have said: “Well there was nothing hanging from outside the box”. Right, this is why we ask that you note on the Bill of Lading what you see and the “Possibility of Damage”.

Therefore, when a Customer is setting up the dining table, they may encounter damage to the carvings, cracks on the leaf etc…. Customers’ first instinct is to call the Seller and demand a new table. Well, it is not always that easy. The seller is not likely to observe the cost of shipping you a dining table.

Whenever, I ship an item to a customer I make sure to inspect the item. I take images of the packaging and images of the item itself. This is critical for me in the event of a damage claim. The Freight Company will want evidence that you in fact shipped a brand new NOT Damaged Item.

(Emailing these images to your Customer will help assure them the item was shipped intact)

One of my favorite Freight Companies is Yellow Freight. They are far from being perfect. It all comes down to people. If you talk to the right people you can count on being taken care of. During these last few months, I am pleased to say that Yellow Freight has been diligent (at least with my account and others I know that use them) to take care of any issues and in settling any open claims in less than 30 days.

Just recently, Yellow and Roadway Freight have merged their systems. I am hoping that it is for the better. Only time will tell.

At no time to you want to have any Concealed Damage claims. As they are hard to prove and the customer may claim a Charge Back with their credit card “For Goods Not As Described”.

Charge Back on Concealed Claims

When a Customer files a Chargeback with their credit card company it is customary for the Credit Card Company to place a hold on the funds (they usually allow me 30 days to respond and provide proof. Funds are not taken out until the Credit Card Company determines the liability).

Upon contact from the credit card company:

Provide them with links to your Policies and Terms & Conditions

Provide them with the Sale Agreement (most shopping carts have this tool)

Provide them with a statement of events

Provide them with emails

Most importantly provide them with the Bill of Lading

Note: The reason you have a concealed claim is due to the Customer failing to note any damage on the Bill of Lading. Therefore, this is the most important piece of evidence.

I have not had a single credit card company rule against me. This of course is frustrating that your Customer took it so far. Ultimately, it is in your hands to decide how you want to handle your claims.

Settle Directly with your Customer on Concealed Damage

Your customer filing a chargeback with your credit card company is the last thing you want to occur. Depending on your Merchant Contract and history with your Bank too many Charge-backs (whether your fault or not) can affect your RATEs or worst limitations can be placed.

(If this occurs with you with Paypal – You will lose all your money. Paypal does NOT offer you any protection and they do not Honor your Terms & Conditions)

Settling directly with your Customer will prevent any charge backs and will allow you the opportunity to make an unhappy customer a Happy One. This is really what you want to achieve.

You will have to decide whether you can ship a replacement part or offer a cash discount for the unfortunate damages the carrier caused. Should your customer be unwillingly to accept any of your offers then you can always offer to assist them with the filling of their claim with the carrier.

Directing your customer to file the Concealed Damage claim with the Freight Company will allow you to focus on your daily business. If you are a company and have staff to handle the claims then a better option would be for you to take control and file the claim. The goal is to have the Customer involved in the process and settle the claim with the Freight Company in less than 30 days. Most customers are appreciative of being informed and when they know that you are doing all you can to right them for the wrong done, they will wait.

Contact your Account Representative and ask for links and print out of their Damage Policy. Some carriers will not insure your shipment unless it is clearly stated on your Contract.

Damage Claims are not fun but you can get through them when you understand how to file and work with your customers.

Now that I am working from home I have stopped offering items that would to be shipped with a Freight Carrier. I am not in a position to finance my damages. Therefore, for now, I am only selling what can be shipped by a ground. Sure, claims can occur, but the items I offer now are smaller and less likely to suffer damage while in transit.

Do you have a favorite carrier? Any advice you want to share it greatly appreciated.



Filed Under: Damage Claims, Featured, Freight Claims Tagged With: , ,

Dining Table Arrived Damaged

November 28, 2008 By 12 Comments

This is the time of the year where you DO NOT want to receive that phone call from your Customer. Now, where are we going to have dinner on??

All shipments arriving in for the last minute Thanksgiving Dinner; such as Dining Tables, China Cabinets, Bars, Dinnerware etc…. Can be the worst time of the year (Holidays) to receive the DAMAGED phone call.

Be sympathetic and take action immediately to satisfy your customer and file the claim with the carrier. Documentation is always crucial. Customers are overwhelmed with family gatherings, sales and details in life and the added stress of receiving a high priced item damage certainly will have your Customer under stress.

Prior to shipping email your customers your Damage Policy and a list of what to look for prior to placing their John Hancock on the delivery slip.

Do yourself a favor, and have a Packing Slip on the outside of the package(s).

Here are some tips on what to have your Customer look for:

DO NOT SIGN unless you have:

·         Thoroughly inspected your order  

·         Take images of any dents, crushing, or suspicious marking

·         Call Customer Service while driver is present

·         Note all marking, possible damage on the Delivery slip

·         KEEP Coy of Delivery slip with Drivers Signature

·         If the damage is obvious to the contents REFUSE it

After Completion of Delivery:

·         Get a copy of the delivery slip

·         File the damage claim

Follow Company protocol

Filed Under: Damage Claims Tagged With: , , ,

Attempted Delivery

November 2, 2008 By 1 Comment

Attempted delivery Notice. When a Freight Company attempts to schedule a delivery to a Residential area they will call for an appointment. If your buyer fails to call back within 24 hours the Freight company will can you for assistance. At this time you should email them and try any other phone numbers listed for them.

The Freight company will continue to call for an appointment no more than 3 days. Once these attempts have failed they will mail out a Certified Letter of Attempt to Deliver. This is a legal notice will also outline the storage fees they may impose on them. As well as what will occur to the freight if they do not claim it and ultimately releasing the Freight Company from any liability.   

You must also familiarize yourself with the Policies of your Freight Company. I have been in situations where the Freight Company did not call us. Our buyer had been in a terrible car accident and of course could not communicate. She did want her order. However, when we contacted the carrier it was to be auctioned the following day.  You bet I got on the phone and took care of it. However, if it’s the Policy of the carrier to only contact the Consignee (Buyer) then you may be at a huge loss. READ J

Should the buyer not respond to the phone calls or the Certified Notice, then the freight company may turn to you for assistance. At this point they have exhausted efforts for delivery. The shipment can be placed for auction or if you decide the order can be shipped back to you.

When a shipment is shipped back to you due to failed attempts for delivery; you will be held responsible for the applicable fees.

There are circumstances where buyers have remorse. They believe if they simply ignore the notices they can file a chargeback with their credit card company……I don’t think so!

If you and the freight company have done all you could to communicate with the buyer; then you should not have to pay for the bill.

Right?

This is true. However, you must have this in writing. Your Sales Policy or Terms & Conditions must be on your website and communication to the buyer should be very clear. In the event of such occurrences you will need all the documentation to prove which party will be responsible for the fees.

Your Terms & Conditions should provide them with your Restocking Fee, Cancellation fee, shipping fees associated in the event they buyer fails to accept delivery.

In such a case you can deduct all the fees from the refund due.

For example:

Sale Price: $800.00

Shipping: $200.00

Total $1,000.00

Deduct the original $200.00 shipping fee and the 25% restocking fee from the Sale Price of $800.000 = $200.00.  

Total Due: $600.00 – From the $600.00 left, deduct the actual cost of shipping this back to you along with any storage fees imposed. Let’s say it adds to $200.00.

Total Refund due to Buyer: $400.00.

 

 Most buyers (I know I would) will comply with your Policies. Very easy, do not buy if you are not sure. J

 

There are occasion when you will get a buyer denying to have read them or even to have received a copy. This is when you provide the link to the Credit Card Company and any emails to and from. Your best bet is to have a Sales Agreement Check Box in your shopping cart. This way a buyer cannot check out unless they Agree to your Policies.

 

I always recommend to have your Policies listed on your site under Policies and Again under Shipping and of course at check out. We also provide them with our Policies on all email communication to the buyer both as a link and an attachment.

 

Sure, a customer may think you want to profit from a cancellation. However, this would not be the case. Freight fees can be proven and the restocking fees is to cover packaging material, freight fees you paid to have it sent to your business and labor.

 

Its best for buyers to cancel the order before they leave the warehouse or your home. This could possibly save them hundreds. Of course, the Cancellation Fee may apply. It would be great Customer Service to waive the fee if they order did not leave your warehouse.

Check out Damage Claims for more details

J

Filed Under: Damage Claims Tagged With: , , , , , , ,

Educating Your Buyer on Freight Shipments Part 1

October 17, 2008 By 2 Comments

Educating yourself and your buyer on the delivery of Freight Shipments is critical to your success.

Provide your Buyer with a list of what to look for and expect during delivery. Attach a copy of your Return Policy or provide a link to your site if emailing them. I strongly suggest that you place another copy of your Terms & Conditions on the shipment itself; referred to as a “Packing Slip”.

If you do not have a Sales Agreement of Terms & Conditions with an acceptance button during checkout get one. When a charge back arises from a damage claim or return it will be your only tool to prove your case.

Acceptance of Delivery

o   Inspect all packages

o   Count the number of packages

o   Do not Sign BOL (delivery slip) until you have inspected and noted any damaged or suspicious damage to the outside of the contents

o   Pictures – If they are not sure of the damage

o   Keep a copy of the Delivery slip

o   Provide a Phone Number for calling in during delivery (We have a dedicated line)

o   Email office with Damage report, pictures, description and copy of the delivery slip

The driver will not wait for the Consignee (buyer) to open the packages to inspect the contents. You must check all outside packaging.  Upon the Consignee (Buyer) signing the document without noting any possible damage, they are Releasing the Freight Company from any liability.

They delivery slip is their ONLY opportunity to address any concerns.

Many times, I have had Buyers call in with a claim. They stated to see punctures, but did not see anything protruding from them. Therefore, they accepted the package without indicating the possibility of damage. When this occurs, I hear, BUT THE DRIVE saw the damage. Guess what, the driver wants to keep his/her job and will not provide any information to Support a Claim against the company he works for.

The freight company can have as much as 90 days to settle a claim.

When the Consignee fails to indicate damage on the Delivery Slip, they have basically Released the Freight company from any liability.

Now the fun begins………….

Filed Under: Damage Claims, Freight Claims Tagged With: , , , , , ,

Filing Freight Claims

October 13, 2008 By 2 Comments

The process of filing these claims is similar to Ground shipments. I have found most Freight Trucking Companies will have a stronger Claims Department. Usually their Claims Examiners are trained Risk & Loss Insurance Adjusters or Inspectors. This means they are well trained and usually have done their share of field work.

Having a well trained Claims Department means they will cut down on the approved claims for the Freight Company.

When using Freight Companies it is very important to have informed your Buyer of your Terms & Conditions of accepting the delivery and how to report it to you. This is even more important when Shipping to Canada. If shipping overseas please see future post for Overseas Cargo.

National Motor Freight Classification Filing of Claims

a.      Claims must be in writing

b.      Provide the Bill of Lading Number

c.       Amount of Claim

d.      Copy of Consignee Delivery slip with signature

e.      Identify the loss, damage, shortage

f.        Invoices, repair estimates or sales order

g.      Images

h.      Statement of Salvage  

Claims must be in writing

 Most Freight Companies offer you the forms online, but they do require that you print and fax over with a signature. It is critical that you and your staff be trained on how to properly file these claims. Not filing on time or correctly can ultimately cost you hundreds if not thousands of dollars.

Provide the Bill of Lading Number

Of course they know your Bill of Lading number, however, they will request it from you. Some Examiners are not very friendly and can hold your claim while you provide the BOL. All documents you fax, email or mail in must have the BOL on the Top Center of each page.

Amount of Claim

Identify your total loss, cost of replacement and Freight fees. This is when to submit a breakdown along with the proper invoices to support the fees.

Consignee Delivery Slip

The Consignee is your Customer. Ask your customer to fax to you the POD. The POD is “proof of delivery”. The Freight Company will have the copy from the driver, however, it can take them up to 7 days to have it scanned an uploaded to the system.

Identify the loss, damage, shortage

You can file the claim for Loss, damage, shortage or for any delays to the shipment. Shortage occurs more often than loss. Usually they will break down the skid to make room in the truck. If you fail to write the Bill of Lading number on each package they can get lost.

Images

The Claims Examiners will require images of the damage. We will email the images taken prior to loading the shipment to their trucks and the images Consignees provides along with a Statement from the Consignee.

Salvage

They simply want to know if they can ship back to you the damage shipment for recovery. This would ultimately reduce the total Claim Amount. Make a Note: When having damage shipments sent back to you, ensure they are shipped back to you as “Dead Head”. Dead Head simply means they will NOT bill you for the shipment being sent back to you.

 

To successfully close a Freight Claim you must:

1.      Provide all of the above information

2.      Make sure you have paid the freight fees in Full

Regardless of the damage, the claims Examiner will not pay you until you have paid in full.

3.      Ensure your Customer understands your Terms & Conditions

4.      Follow up with the Claims Examiner

5.      Have a copy of Cancelled Check of the Freight fees, not providing proof can delay your claim. Keep in mind most accounting departments will not process the payment for 30 days.

 

Filed Under: Damage Claims Tagged With: , , , ,

Upon Notification of Damage

October 8, 2008 By Leave a Comment

 

You get the call or email. What are you going to do?

 

- Ask the buyer to email you images of the box and the contents.

-     - Have the buyer identify any visible damage to the outside package

-          Did the buyer indicate in the delivery slip the damage?   à Check my next post for a form letter we email all buyers.

  

In order for you to effectively file a claim and obtain payment from the Carrier you must have all your Docs (ducks) in order. As I stated previously, the Claims Examiner will always deny your claim upon receipt. They will provide you with a list of items needed.

 

I have had various Claims Examiners just mail out a form letter without EVER reviewing the file. When we file a claim we submit all the Standard Information. Of course, to get a form letter is a waste of time for us.

The only change I have noticed recently the request of an eBay Item Number. (Now, who do you think proposed this one???)

 

The carrier by Federal Transportation Law has up to 90 days to settle a claim. However, most carriers try to get them settled within 30 days.

 

Upon notification of damage to the carrier the following steps usually follow:

1.      Claim forms sent to you (unless you filed online or have already faxed them in)

2.      They must acknowledge receipt of your claim (time is key here)

3.      They must sent out an Inspector no more than 7 days from the date notified (they may pass on this if your claim is under $100.00

4.      Inform the Buyer to HOLD the contents for inspection

5.      Once inspected the carrier must do one of two

a.      Recover the damages or

b.      Provide you with a written release to destroy

 

 

Note: The carrier will send out an inspector to review the damage. If you failed to package as per their guidelines your claim will be denied. You can appeal it; however, once denied due to failure to comply rarely gets reopened.

 

TIP: We inspect all items and photograph the contents as well as the packaging. Therefore, we eliminate any questions of proper packaging. We also invite every Account Manager and Warehouse Manager to walk our warehouse and review our packaging and inspection process. Every single time; they walked away with new techniques to implement on at their dock.  I will provide you our Guidelines and images in a future post.

 

 

It is important once the forms have been accepted and the inspection has been completed for you to stay on top of them. Having followed the steps above you should be expecting a check at this point. Once they have mailed out the check ask the Claims Examiner to provide you the date is was cut, mailed and the Amount. Of course you need this for your records.

 

As you grow, you will find it necessary to start a Database that you can eventually have your office network off.

 

J If you have any questions, please ask. All questions are welcomed.  J

Filed Under: Damage Claims, Selling online Tagged With: , , , , , , , , , ,

Filing Damage Claims – Ground

October 6, 2008 By Leave a Comment

Filing Damage Claims can be time consuming and exhausting. If you do not file your claims on time you will be at a HUGE loss. This can cripple your business and ultimately can cause you to go belly up.

I am going to provide you some helpful tips I have in place for GROUND orders only. I will be talking about Freight orders in my next post.

When filing a claim you will need to be prepared to provide:

1)      Manufacturers / Vendors original invoice

2)      Declaration of Loss /Damage

3)      Value

4)      Insurance Protection Amount

5)      Sales Receipt to Customer

Manufacturers / Vendor original invoice:

When you initially file a claim you must have a break down on what your total cost is to replace the item. If you purchased in bulk, write on the copy of the invoice the cost per unit. Point it out for the Claims Examiner to avoid delaying your claim from being paid.

If the buyer is demanding a full refund; then, the invoice to submit to the carrier will be for your loss of the sale. You can submit to them your online add or your receipt to the buyer. Be prepared to submit an explanation as to why you are submitting for the value of the sale.

“Due to the negligence and poor handling of the package entrusted to your company, we have suffered a great financial loss and damaged our relationship with our buyer. Consequently, discouraging our buyer from any future purchases while using your company as our shipper.”

We have several versions of this template and have founded effective with our claims department.

Declaration of Loss / Damage

All carriers will ask that you state in writing if the shipment can be replaced or of if it is a total loss.  This is determined by you and your customer. Can you salvage the item or no? Mostly, you will not. You are in the business of selling Brand New. I know that we do not have the space to store damaged items for possible salvage. Therefore, we rarely accept salvage.

**On occasion you may have a buyer that may want to do the repair themselves. Here is where excellent customer service comes in play. J Offer them a substantial discount. You will not be at a loss. On the contrary you will WIN big.

You can file the claim with the carrier for the cost of proving your Buyer a discount. This saves the carrier money and saves you a loyal buyer.

I like to give my buyers Gift Certificates (or Coupons, but I like to refer to them as a Gift Certificate) I already know what they like. Therefore, we provide them with the due discount due to the damage the item sustained while in transit and offer the Gift Certificate. Of course you need to set up your guidelines on the amount.

Value

I have found this to vary from carrier and Claims Examiner. You must ask the Claims Examiner to clearly state what VALUE are they referring to.  ( I will come back to this later in regards to Export shipments)

Value could mean the resale cost of the shipment or the Cost of the Item. Not as black and white or other areas. Make sure to ask every time. I find that more training is needed in the Claims Department of the carriers.

Insurance Protection

Always protect your shipments for the full sale amount. Play it Safe. In the event of damage you will not be at a total loss.

Sales Receipt

Provide a print out of the other order, some carriers do accept Online Advertisements. Or create a new copy of the receipt NOT to INCLUDE any personal identifiable information such as Credit Cards or Checking Account Numbers.

***New laws have passed making you also responsible for the loss of customer information***

 

If you are not organized, then its time. Do not let any claims pile up on you. Damages and Loss packages can occur. So when they do be Prepared. Have all your docs ready. You also MSUT file the claim per the ALLOWED time. Each carrier will vary. Check with your Account Manager and get it in writing.

It happen to us in the past. We had a New Team Member; she missed a step and cost us a loss of $2,500.00. No, she was not let go. She is now the Manager of the Team. Yeah for her!!

If you just started selling or are growing you should start implementing your own Damage Procedures Guide. As you start hiring you will find most of your time can be taken doing the training. Providing your new hires (Team Members) a Company Policy and Department Policy & Procedures Guide will benefit you immensely.

 

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