Declaring value of items shipped overseas

Steve Adams · Dec 10, 2016

For those that ship items overseas. Do you declare the full value of the item, or do you declare a lesser value to avoid customs fees? I'll understand if people don't want to respond. It's just that I followed the letter of the law as a first timer and now the customer doesn't want to pay the fee, thus the package is still in customs. Paypals decision is that we did everything by the book, but what is the best way to resolve this with the customer? Obviously I can't refund anything without the item in hand, but he is the only one who can get it out of customs and refuses to do so.

Brian Marshall · Dec 10, 2016

Interesting situation... I've never gotten into anything similar, but then I am not a major exporter. Maybe a dozen items of value over my lifetime?

At what point is it said that you lost ownership (control)?

The moment you & Paypal accepted payment?

How did customs charges not get figured into the transaction in advance? Even if it was only an estimate?

Is customs (of whatever country) willing to get involved in any way? Like returning the item to you if a refund can be proven somehow?

If not, where does the product go? To some kind of limbo/purgatory forever? Does it eventually get auctioned off?

Who is deemed the legal owner at this point? Customs?

If it is the client and he refuses to pay the duty - does he not lose control over the product at some point? When is that?

I know that throwing all these questions up only exacerbates your misery - and I am sorry for that - but maybe something in there might trigger a thought leading to a compromise - that might lead to a solution? (without involving lawyers)

Brian

Steve Adams · Dec 10, 2016

Let me figure these questions out.

diandwill · Dec 10, 2016

I let the client know, up front, that I will be declaring full value, if we go through paypal, square or another entity that leaves more of a paper trail than a check. If they pay with a check and are willing to wait until it has cleared (probably a bank to bank transfer would work too) I will ship it as repairs etc., but with the caveat that no matter what...they are responsible for all customs, duties or VAT.

In your case, you sold an item and have been paid. If the purchaser refuses to pick it up, they are out the money AND the product!

Sam · Dec 10, 2016

It's up to you if you want to declare it as a gift or put a lower value on it. If it's insured, then you might not be able to insure it for one amount and claim it's worth less on the customs form.

What I would do is to clearly state that the customer is responsible for import taxes or duties before I sell an item. How to handle this transaction I don't know, but it's obvious that they're responsible for it and not you. You have no control over that and it's not your responsibility to try to estimate customs fees their country will charge them.

Flashmo · Dec 10, 2016

My typical shipment out of the US is 1k-3k. We declare the value listed on the customer's included, PAID, invoice.

Their costs through their respective Customs agency are not my concern, for any reason. They bought the product overseas, they live there, they know their countries rules.

People overseas who buy from the US do it for one of two reasons. The product is not available elseware or most likely it is cheaper to buy from the US AND pay import fees. You should calculate what VAT would do to your product pricing if instituted here.

We import something from New Zealand yearly. UPS sends me a bill within the week for duties that must be postmarked within 2 weeks.

That is the price paid for a global economy. Bottom line (and I am not a jerk with customers), but it is their issue.

Andrew Biggs · Dec 11, 2016

Border taxes are the customers issue. If I buy something from Amazon or a host of other places in the USA……….Then I know full well I will pay NZ taxes at the border to get it to my doorstep. That is just the way it is and everyone knows it.

If your customer has paid you in full and refuses to pay duties at the border…………..then that is their problem, not yours and it’s their loss. The customer has no right to a refund.

If they have only partially paid you then that is your problem as well unfortunately.

Cheers
Andrew

Steve Adams · Dec 11, 2016

Thank you everyone. It comes down to one thing, he is ultimately responsible for the duty tax and customs fee. Both Customs and Paypal say he is responsible. He actually should know this because he makes many overseas purchases, but is playing games I feel. He at first wanted me to pay the fees, but I refused. He is trying to get a full refund without us having the item back. Our proposal is to refund once we have the item back, minus any expenses. We are waiting for word from customs about what will happen if he never pays the fees, in other words will we be responsible for the customs handling fee and shipping back I assume. We understand after 30 days, customs has a return policy. How lengthy the process is or cost is unknown at this time. The customer said I should consult my peers and see how they do this. Now that I have, I think he is in the wrong. The customer even suggested to me at one point that if the coin was returned to me from customs, would I send it back to him again but declare it lower. You've got to be kidding.

Brian Marshall · Dec 11, 2016

Cross this guy off your list. You don't need him.

Down the road, he may want another piece of yours... let him find someone else (hopefully that you already know & trust) to do the deal.

He can pay that person/broker for their time/trouble AND the customs fees - or simply do without. Life is too short...

B.

Crossbolt · Dec 11, 2016

I think he knows exactly what he's doing and is trying to manipulate you. As others have pointed out this is common knowledge for anyone dealing with cross border transactions. It is sad but true that some business people see this as a valid way to do business. I personally would find a way to make him take a loss AND get your product back if that's the kind of game he wants to play.
Jeremy

dogcatcher · Dec 11, 2016

After it is all over with and the dust has settled I would also make a post with his name and the details. If he did it once, he knows the rules, most likely he has done it before and in my opinion he is a scammer. When I do business with a foreign customer I do not know I Google his name, twice that has saved me from dealing with scammers.

Sam · Dec 11, 2016

Steve: Direct your customer to this thread if he wants to hear what your peers have to say.

I see no reason to even discuss refunding anything with him. As Brian says, cross him off the list.

Steve Adams · Dec 11, 2016

If it gets any dirtier than it already is Sam, I will use this. Good idea, thanks.

Mike_Morgan · Dec 11, 2016

I ship numerous items for my machine shop business to other countries and the less honorable customers ALWAYS ask me to declare a lower value on the customs form so they can cheat their government. My response is always the same... "NO"

If the customer cannot afford the fees, taxes, duties and tariffs, they should not be purchasing the items that accumulate those burdensome fees. I will not lie to my government OR his just to save the customer money they are legally required to pay.

The customers know every button to push... "Well this means I won't be doing business with you in the future" and my personal favorite; "your competition does it for me all the time"

I have a solution that has worked in most cases, when the customer insists on this. I tell them to find a TRUSTED FRIEND in this country where I can ship the item, and that person can forward the package with any declaration they happen to choose... but OUR transaction is complete when it hits his agent in MY country. Using this method, the lying, cheating customer gets what they want, and I have a paper trail that shows it has been delivered and signed for in my country.

Flashmo · Dec 11, 2016

If it is returned to you for failure to pay customs fees, there should be no refund. I would not do it.

It is his legal property now. Stick it on a shelf where it will be safe, or in the safe. When he pays shipping a second time, ship it to him once again. At true declared value.

mitch · Dec 12, 2016

i'm with Brian & Mike. have him designate an agent in this country that you can complete the transaction with 100% domestically, then that person can make whatever arrangements with the end client.

Crossbolt · Dec 12, 2016

Flashmo said:
If it is returned to you for failure to pay customs fees, there should be no refund. I would not do it.

It is his legal property now. Stick it on a shelf where it will be safe, or in the safe. When he pays shipping a second time, ship it to him once again. At true declared value.

If it is something you can resell without a major loss and it's returned, I'd refund him his purchase price LESS shipping and be done with it.

Jeremy

Steve Adams · Dec 12, 2016

Seems the client has requested the package be returned. Now let's see if it gets back here, and if there will be any extra costs involved. I am to honest to not return his money minus expenses provided the item is in my hand. I made the comment to my wife last night that I hoped the package took a long long time to arrive, or better yet, we refuse to pick it up here. Just kidding.

Flashmo · Dec 12, 2016

Crossbolt said:
If it is something you can resell without a major loss and it's returned, I'd refund him his purchase price LESS shipping and be done with it.

Jeremy

No offense intended, whatsoever. I can tell you are not self employed, and definitely not a self employed artisan.

What you said is correct, IF the piece is a spec piece, it can be resold...no harm, no foul.

If the piece was a commission, or custom it could sit for weeks...years...or decades.

How much would MAJOR LOSS would you be willing to settle for on a commissioned project (and I don't know if this piece was spec or commissioned). 30%, 50%?

Would you feel OK about your boss paying you 50% for the next couple weeks because a customer didn't pay for their product? What about waiting a year or two to get that 50%?

Spec...I have no problem refunding full price after shipping to anyone who buys our stuff if it does not meet muster(never had a request for that, however). Comissioned or custom...they can get a partial refund when the piece actually sells, no matter how long it takes.

Luckily for me, a 3-5 month wait with 50% down(non-refundable) and the remaining 50% due before shipped weeds out a lot of lookie-loos and odd ducks.

diandwill · Dec 12, 2016

Steve Adams said:
Seems the client has requested the package be returned. Now let's see if it gets back here, and if there will be any extra costs involved. I am to honest to not return his money minus expenses provided the item is in my hand. I made the comment to my wife last night that I hoped the package took a long long time to arrive, or better yet, we refuse to pick it up here. Just kidding.

I would be too honest and refuse to pick it up. He bought it. He knows what customs/duty is to his country. It belongs to him. To take it back is to take another persons property.

Declaring value of items shipped overseas

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