If you sell physical products online, you already know the feeling. You check your inbox, and there it is: another "delivered but not received" claim. Or a damage report. Or a courier compensation request that will take three hours of back-and-forth to recover £12.
At a certain point, most sellers arrive at the same conclusion: some of this is just the price of doing business online. The question is whether that conclusion is wisdom or resignation, and the answer depends almost entirely on what you're selling and at what price.
This piece draws on a recent thread started by @Zej in the General Business Forum, where sellers at various stages shared how they actually handle fulfilment losses in practice. The answers were more divided than you might expect.
@Marantzdigital described an approach I think is genuinely useful: treating a small portion of every postage charge as a contribution to an imaginary loss pot. If you need to dip into it during the year, it's there. If you don't, it becomes profit. It's not glamorous, but it's honest accounting.
@Paul Norman laid out the standard costs of doing business online as a clean list: lost parcels, frivolous returns, and chargebacks. His position was that chasing each case individually would cost more in time than you'd recover in compensation, and that the right approach is to manage the aggregate rather than fight every individual claim.
@pentel drew the comparison to shoplifting in a bricks-and-mortar business. It happens. You build it into your model and you get on with it.
That's all reasonable. But it's also incomplete.
He also made an observation that I think deserves more attention than it got in the thread: the people filing fraudulent or exaggerated claims are often not who you'd expect. They're not the obvious bad actors. They're customers who would never dream of doing something dishonest in a physical shop, but who have somehow convinced themselves that claiming non-delivery online is a grey area rather than straightforward fraud. The anonymity of the screen changes behaviour in ways that are genuinely uncomfortable to sit with.
Joey80's operations record acceptance of terms, including date, time, device, and IP address, and always include photo and signature proof of delivery. And they still face bogus claims. His conclusion: at a certain point, you have to push back actively, not just absorb.
That's a provocation, not a solution. But it points to something real. Loss rates are not purely random. The product you sell, the price point you operate at, the platforms you use, and the customers you attract all affect your exposure. A business that sells high-quality goods to customers who have made a considered purchase decision is going to have a different claims profile from one selling low-cost impulse buys to a high-volume, anonymous customer base.
This doesn't mean losses can always be designed out. But it does mean that if your loss rate is consistently higher than you'd expect, it's worth asking whether something upstream of the courier is driving it.
Set a value threshold for claims. Decide in advance at what order value it becomes worth your time to pursue compensation. Below that threshold, absorb the loss and move on. Above it, pursue it consistently. Don't make the decision case by case because you'll waste time and make it emotionally rather than commercially.
Build a loss pot into your pricing. The Marantzdigital approach is sound. A small percentage of every postage charge set aside for losses means you're never surprised, and any year where losses come in below your assumption goes straight to the bottom line.
Protect yourself before the problem arises. Photo and signature proof of delivery, timestamped terms acceptance, and clear returns policies. Not because it eliminates claims, but because it gives you something to stand on when you push back on the ones that don't hold up.
Review your loss rate annually. If it's creeping up, look at which products, which couriers, and which customer segments are driving it. The pattern usually tells you something actionable.
Don't be too quick to accept the "cost of doing business" framing. It can become a habit of thought that stops you from investigating what's actually happening. Some losses are genuinely unavoidable. Others are a signal.
Ultimately, the answer to the question in the thread title is that there's no universal point at which courier losses just become acceptable overhead. It depends on your margins, your order values, your customers, and how much of your own time a claim actually costs you to pursue. The sellers who handle this best are the ones who've deliberately made that calculation, rather than just absorbing whatever comes their way and hoping it doesn't add up to too much.
The thread that prompted this piece is still live if you want to add your own experience: At what point do courier losses just become a cost of doing business?
At a certain point, most sellers arrive at the same conclusion: some of this is just the price of doing business online. The question is whether that conclusion is wisdom or resignation, and the answer depends almost entirely on what you're selling and at what price.
This piece draws on a recent thread started by @Zej in the General Business Forum, where sellers at various stages shared how they actually handle fulfilment losses in practice. The answers were more divided than you might expect.
The consensus: absorb it and move on
The majority view in the thread was clear. @JEREMY HAWKE, who runs a courier operation and knows this world from both sides, put it simply: you don't have the time to chase compensation, and most experienced sellers factor in losses from the start.@Marantzdigital described an approach I think is genuinely useful: treating a small portion of every postage charge as a contribution to an imaginary loss pot. If you need to dip into it during the year, it's there. If you don't, it becomes profit. It's not glamorous, but it's honest accounting.
@Paul Norman laid out the standard costs of doing business online as a clean list: lost parcels, frivolous returns, and chargebacks. His position was that chasing each case individually would cost more in time than you'd recover in compensation, and that the right approach is to manage the aggregate rather than fight every individual claim.
@pentel drew the comparison to shoplifting in a bricks-and-mortar business. It happens. You build it into your model and you get on with it.
That's all reasonable. But it's also incomplete.
Where the consensus breaks down
@Joey80 made the point that reframed the whole discussion for me. The "cost of doing business" framing works when your average order value is low enough that individual losses can be absorbed without pain. It starts to fall apart when your average transaction is around £100 or more. At that level, each case genuinely matters to your margin, and writing losses off as inevitable starts to feel less like pragmatism and more like giving money away.He also made an observation that I think deserves more attention than it got in the thread: the people filing fraudulent or exaggerated claims are often not who you'd expect. They're not the obvious bad actors. They're customers who would never dream of doing something dishonest in a physical shop, but who have somehow convinced themselves that claiming non-delivery online is a grey area rather than straightforward fraud. The anonymity of the screen changes behaviour in ways that are genuinely uncomfortable to sit with.
Joey80's operations record acceptance of terms, including date, time, device, and IP address, and always include photo and signature proof of delivery. And they still face bogus claims. His conclusion: at a certain point, you have to push back actively, not just absorb.
The outlier worth paying attention to
The most interesting contribution came from @DontAsk, who has been selling online for over 22 years. In that time, he's had a lost parcel rate of under 0.1%, near-zero frivolous returns, and one PayPal dispute. His take: perhaps some people have the wrong sort of customers.That's a provocation, not a solution. But it points to something real. Loss rates are not purely random. The product you sell, the price point you operate at, the platforms you use, and the customers you attract all affect your exposure. A business that sells high-quality goods to customers who have made a considered purchase decision is going to have a different claims profile from one selling low-cost impulse buys to a high-volume, anonymous customer base.
This doesn't mean losses can always be designed out. But it does mean that if your loss rate is consistently higher than you'd expect, it's worth asking whether something upstream of the courier is driving it.
A practical framework
Based on what the thread surfaced, here's how I'd think about it:Set a value threshold for claims. Decide in advance at what order value it becomes worth your time to pursue compensation. Below that threshold, absorb the loss and move on. Above it, pursue it consistently. Don't make the decision case by case because you'll waste time and make it emotionally rather than commercially.
Build a loss pot into your pricing. The Marantzdigital approach is sound. A small percentage of every postage charge set aside for losses means you're never surprised, and any year where losses come in below your assumption goes straight to the bottom line.
Protect yourself before the problem arises. Photo and signature proof of delivery, timestamped terms acceptance, and clear returns policies. Not because it eliminates claims, but because it gives you something to stand on when you push back on the ones that don't hold up.
Review your loss rate annually. If it's creeping up, look at which products, which couriers, and which customer segments are driving it. The pattern usually tells you something actionable.
Don't be too quick to accept the "cost of doing business" framing. It can become a habit of thought that stops you from investigating what's actually happening. Some losses are genuinely unavoidable. Others are a signal.
Ultimately, the answer to the question in the thread title is that there's no universal point at which courier losses just become acceptable overhead. It depends on your margins, your order values, your customers, and how much of your own time a claim actually costs you to pursue. The sellers who handle this best are the ones who've deliberately made that calculation, rather than just absorbing whatever comes their way and hoping it doesn't add up to too much.
The thread that prompted this piece is still live if you want to add your own experience: At what point do courier losses just become a cost of doing business?
