For overseas companies looking to expand to new markets, setting up their operational processes for serving customers in a foreign country may be daunting.
Expanding your offering to New Zealand is made easy when using Private Box. We provide a local address in New Zealand, local phone numbers and phone answering services.
This blog is part 1 in a series on how overseas businesses can leverage Private Box to manage physical products with customers in New Zealand:
- Part 1: Managing product returns
- Part 2: Managing customer submissions
- Part 3: Managing distribution to customers in NZ
Before getting started it can help to know exactly what requirements retailers have when serving New Zealand customers.
New Zealand Law on Product Returns
The Consumer Guarantee Act is the legislation in New Zealand that sets out quality guarantees any business or person in trade must provide to their customers in New Zealand. Here is a link to the actual legislation.
In brief, the law says customers can return a product if:
- It is faulty
- It is not fit for purpose
Businesses do not need to accept returns if a customer changes their mind. Although, many businesses do choose to allow this, and it can be a selling point.
The New Zealand government has a few websites for businesses and consumers which helps to clarify what the rules are:
- Fair returns and complaints policies – Business.govt.nz
- Obligations under the Consumer Guarantees Act – Consumerprotection.govt.nz
It is recommended to include information on your returns policy on your website or within your terms and conditions.
Many brick and mortar retailers display the generic returns policy sign provided by the government.
Paying for return postage
There are two options for managing who pays for the postage of returned items. These are;
- The customer pays for returns – this is by far the most common. NZ customers are familiar with returning products by domestic courier or post.
- The retailer pays for the return – this sometimes occurs for high-value items, when the return is required to be shipped overseas, or if the item is being returned due to a fault.
When allowing for change of mind returns, many retailers add timelines – for example, 30-day or 90-day change of mind periods. It is always important to make the return period very clear to your customers.
Store credit or refund
For change of mind returns, the retailer can decide if they provide store credit or refunds.
For faulty items, retailers can either offer a replacement or refund. Store credit is not allowed in this situation.
When processing refunds it is recommended that the refunded amount is credited back to the same payment method that the original purchase was made with.
For example, a refund is made back to the same credit card which was used to make the purchase.
This is anti-money laundering best practice.
How you can leverage Private Box
Private Box provides a local address in New Zealand that can be used to receive mail and parcels.
Providing a local address in New Zealand for customers to return products to can help to ensure timely processing returns. It’s particularly handy if you have a time frame in your return policy (30-day return policy for example). Most domestic courier companies have a target delivery time of ‘next business day’.
When customer returns are received at your Private Box address in New Zealand they are recorded and can be managed through our online portal, or with pre-set automatic rules.
Common processes for managing product returns with Private Box are:
- Product returns batched together and returned to your warehouse overseas
- Product return held and re-deployed in NZ as a new sale
- Product return securely destroyed
Private Box records each parcel that arrives, and you have an option to set up different sorting rules for your returns. This gives you the flexibility to manage different returns in different ways.
For example, returns for different brands or product types can be forwarded to different warehouses or subcontractors.
Want to wait until you have a bulk shipment of items to process? We can securely hold your items until you are ready to ship.
Automation: Set & forget
Private Box’s Automatic rules allow businesses to set up automatic processing of returns or customer submissions so you do not have to keep checking & managing your Private Box account.
For soiled or faulty returned items, Private Box can securely dispose of items that have no value. This will help save a business the cost of shipping unnecessary items back to their warehouse.
Australian online retailer serving New Zealand
In 2019 a popular Australian clothing retailer launched their New Zealand e-commerce website to better serve their customers across the Tasman.
They have a 30-day change of mind return policy on non-sale items, providing their customers peace of mind when purchasing online.
After a year of trying to manage New Zealand customers returning items to Australia, the retailer turned to Private Box to offer a New Zealand returns address to their customers wanting to return items.
This allows customers in New Zealand to send their returns to a domestic address, which costs the customers less and is faster.
The retailer then has rules for Private Box to manage their product returns.
On Tuesdays & Fridays each week, returns are bundled together and are then shipped to their warehouse in Queensland, Australia by International Courier (carried by NZ Post & Aus Post). When there are less than 5 items to be shipped to Australia, they are held until the next sending day.
The retailer covers the cost of shipping the products internationally to spare their customers from this cost.
Online retailer disposing of compliance returns
Another online retailer selling custom order gifts chose Private Box as a way for managing their returns for compliance with NZ law.
Because the items are made to order they cannot be re-sold. Additionally, shipping the items back to their manufacturer costs more than the item’s parts value.
So the retailer directs customers to send product returns to their Private Box address in New Zealand, and has returns securely disposed of.
What international shipping services does Private Box offer?
Private Box manages all the shipping from Private Box addresses.
This means you can’t use your existing shipping accounts to arrange pickups from a Private Box address.
The Shipping Services we offer:
- Air Mail – The cheapest postal option, but does not provide tracking, $250 insurance cover
- International Courier [carried by EMS] – Best value for money, includes tracking & $2000 insurance
- International Express Courier [carried by DHL] – The fastest service, fully tracked, $2000 insurance, this method is used to ship items that contain lithium-ion batteries
How much does it cost?
Private Box address is $49NZD/month (or $490/year).
International shipping costs depend on the weight & volume of the & parcel and the shipping service selected.
NZ Post’s calculator is a great tool to get an estimate of shipping costs.
Private Box charges a handling fee of $15.50 per shipment + 50 cents for each additional item added to the shipment.
You can see a detailed breakdown of the costs and options on our support article: How much will it cost me?
Other things to be aware of:
Foreign online businesses that earn more than $60,000 per annum from Kiwi consumers will be required to collect GST at the point of sale. Where a business does not meet this threshold, and a customer’s order is less than $1001, customers won’t be required to pay GST.
Read more about GST on consumer.org.nz
Shipments into New Zealand with a value of $1000 or more may be required to pay customs duty (as well as GST mentioned above).
Find out more about duties for shipments to New Zealand using the duty calculator at customs.govt.nz
Returns being shipped from New Zealand to other countries are marked as ‘Returns’ in the customs declaration and do not have customs duties charged NZ Customs.
Most countries do not charge duties on incoming returns, but we recommend confirming the rules with your local border control agency.
Some items are prohibited or restricted from being sent via mail services. Before sending any items, it’s best to check the rules.
Read more on our website about prohibited or restricted items.
Parcels from Private Box overseas include insurance in case of loss. The included insurance is up to $250NZD for Airmail or up to $2000NZD for courier.
For packages with a total value of over $2000, there is an optional additional cost to insure the contents. This is calculated at 1.06% of the total value.
In the event of an insurance claim being required, Private Box is the sender and will make the claim on our customers’ behalf.
Take the next step!
Sign up for a $1 30-day trial to set up a Private Box account. You’ll be able to test it out and see if it works for you.
Please note that any mail processing fees like scanning or postage will still be charged during the trial period.
Got further questions? Get in touch with our support team.