If you want to know more about DDP shipping, how it works and how you can improve this method of shipping, read our guide below.

What does DDP stand for?

DDP stands for delivery duty paid. This is when a brand pays the import duty and customs charges when an overseas customer places an order with them.

Many brands prefer this method of shipping because:

  • The delivery process is faster as there are no pending payments at customs
  • Customers pay the initial price they see when placing their order
  • It improves the overall customer experience which means customer retention

For these reasons, customers are more likely to shop with brands that ship DDP.

Are there any disadvantages of DDP shipping?

DDP shipping is pretty great for both customers and retailers, but yes – there is a huge disadvantage when it comes to shipping DDP. 

When brands pay import duties and customs charges on behalf of their customers, if a customer decides to return an item – the brand will essentially lose the import fees they paid. 

Here’s an example of how it works:

  • A customer places an order for £300
  • The brand ships the item to the customer and pays £70 in import fees
  • The customer decides to return the entire £300 order
  • The brand refunds £300 and receives the goods back
  • The brand loses the £70 they paid on behalf of the customer

The customer experience remains unaffected as returning the goods is as simple as receiving it. However, the brand is at a loss of £70, and this amount will vary depending on a range of factors such as the origin and pricing of the product.

How does the Duty Refunds solution solve this issue?

We can’t stop customers from returning an item, of course. But at Duty Refunds, we can help brands continue to offer their customers a satisfactory shopping experience, just without the sting of losing the import duty and customs charges they paid in the case of a return.

We do this by simply reclaiming the import duties from HMRC on your behalf. 

But that’s not all we offer:

  • We’ll also register you for VAT
  • We’ll make sure you’re 100% VAT-compliant in the UK
  • We’ll switch your VAT bill to quarterly instead of monthly

How does this benefit my business?

Firstly, our solution improves your margins just from reclaiming lost cash. Many brands don’t realise the overall effect any cash loss can have on their business.

Here’s a quick example:

If 10 customers order from a brand, and the brand pays £50 import duty per customer, they’ll lose the £500 they paid if all ten customers return their orders.

Additionally, paying VAT quarterly instead of monthly means your business will have more cash flow. 

The Duty Refunds DDP solution will remove:

  • The need to reconcile or dispute courier bills at the end of each month
  • The need for costly VAT platforms 

How much does the DDP solution cost?

You’ll get all of this for a small fee of just £1 per successful UK order plus 5% of duty & VAT collected. That’s it – and there are no hidden fees or surcharges.

Interested in our solutions? You can find out more about what solution works best for you on our dedicated solutions page.

What you get by partnering with us:

  • Boost your average order value in the UK market by increasing trust with UK consumers – they’ll know they can get a full refund, no matter what
  • Increase your customer lifetime value through a higher-than-expected level of customer service and a smooth, no-headache, easy returns process
  • Reduce the time your team needs to spend on customer service
  • Gain an entirely new revenue stream through our shared commission scheme