DMA Offers Guidelines for Setting Fulfillment Costs

Share this content:
SAN FRANCISCO -- The Direct Marketing Association issued guidance to DMers in establishing charges for shipping, handling and other fulfillment costs yesterday at its Annual Catalog Conference at the Moscone Center here.

The guidance, which is an addition to the DMA's guideline for ethical business practices, states that "postage, shipping, or handling charges, if any, should bear a reasonable relationship to actual costs incurred."

The new recommendation suggests that when establishing and substantiating shipping and handling charges, companies should:

· Determine what costs will be covered and substantiate their method so they can easily respond to consumers, regulators or others who inquire about charges. Ideally, a fulfillment cost study should be conducted with help from an impartial outside expert. Semi-direct costs such as warehousing and returns processing or indirect costs such as item replacement are much tougher to substantiate and should be clearly documented.

· Exact charges should be disclosed clearly and conspicuously in advance of the order. Charges should be prominently displayed and readily visible. When ordering online, shoppers should receive shipping information early in the order path.

· In continuity programs, in which shipping costs may differ from month to month depending on the order, an estimated range of costs should be provided before sign-up. When each order is shipped, the exact shipping and handling charge should be stated clearly.

· If a company eliminates a separate shipping and handling charge and concurrently builds the cost into the price of the product, the offer should include a term such as "shipping included" rather than "free" shipping.

· When a company offers free products and the consumer pays only for shipping and handling, the offer should disclose clearly and near the word "free" the costs of shipping, the entire plan for which the consumer is obligated and the total cost that consumers will pay.


Next Article in Multichannel Marketing

Sign up to our newsletters

Company of the Week

PAN Communications is an award-winning integrated marketing and public relations agency for B2B technology and healthcare brands. PAN's data-driven approach allows the firm to specialize in public relations, social media, content and influencer marketing, and data and analytics. PAN partners with brands to create unique, integrated campaigns that captivate audiences.

Find out more here »

Career Center

Check out hundreds of exciting professional opportunities available on DMN's Career Center.  
Explore careers in digital marketing, sales, eCommerce, marketing communications, IT, data strategies, and much more. And don't forget to update your resume so employers can contact you privately about job opportunities.

>>Click Here

Relive the 2017 Marketing Hall of Femme

Click the image above