Customs, Duties and Tariffs to the USA

Shopify Discussion
1

Hi, I have a small EU based shop that regularly ships to the USA using FedEx. With the new implementation of tariffs and the removal of the $800 tax free rule, I am starting to get charge backs for these charges when customers refuse to pay.
We use a 3rd party shipper that gets us a good rate by comparing couriers and FedEx always comes back as the least expensive (by far). This 3rd party shipper seems to not really be iinformed on this so I’m reaching out here.

My questions are:

1. Is there a way to have FedEx collect the charges from the customers BEFORE they deliver? My customers are always informed before buying that these fees have to be paid by them. When I ship to Canada via UPS, UPS sends the notification and the package does not get delivered until it’s paid. I’ve never had a package returned as the customer always pays.

2. As we are a small company, if we decided to collect the fees before we ship, how would we calculate the tariffs, etc? And how would we submit to the USA.

  1. Do I have any way to challenge these charges with FedEx. I have a feeling that a lot more US customers will be refusing to pay…

I’m really trying to find the simplest way to manage this as the USA is a substantial market for us. I am open to all suggestions.

Thanks

3

Thanks Stephen, it’s a very clear explanation. After reading, can I ask if there is a way for FedEx to ask for payment from the receiver before they deliver. I’m not sure if I want to be the one collecting monies (DDP). When I ship using UPS or DHL, they ship the goods, and before delivery, they request payment from the receiver. Once paid, they deliver.

For example, when I receive goods in the EU from a non-EU country, DHL sends me a notice prompted when they accept the goods in the non-EU country. This allows me a 2-3 day advance notice of payment so that the delivery can happen in a timely fashion.

I don’t use UPS or DHL for the USA as the pricing is triple what FedEx is (for example €40 vs €120) which really kills the bottom line. I’ve also read that DHL & UPS aren’t handling the tariff situation well.

Thanks again.

4

Since you’re currently shipping DAP (Delivered At Place) with FedEx, you don’t need to submit anything to U.S. Customs yourself. FedEx handles the tariff submission and collects duties or taxes directly from your U.S. customers before delivery. Just make sure your invoice clearly states “DAP, receiver responsible for import charges,” and mention it at checkout too.

If you’d prefer to collect these charges upfront (DDP), you can estimate tariffs based on HS codes, item value, and destination.

If you’re looking for an easier setup, consider integrating your FedEx account through PluginHive’s Multi Carrier Shipping Label App. It’ll streamline rate calculations, DDP/DDU handling, and customs paperwork.

For more details or setup help, you can always reach out to PluginHive Support

5

  1. Even if FedEx collect the charges from your customer before they deliver they will have already transported the goods over to the US. No problem if your customer pays the charges but if they refuse then you’re liable for the charges plus the complexity of getting the goods back. There are solutions that will stop the goods from leaving the UK until your customer has paid the applicable Duties and Taxes. Especially as consumers are getting used to the new tariff landscape we’ve seeing rejection rates of roughly 50%. Keeping the goods in the UK until they’re paid means no Duties and taxes have to be paid so all you have to worry about are the UK return costs from the carrier if the customer doesn’t pay the charges. Canada sees far less rejection rates in general because most consumers are used to this system – so over time US consumers will catch up.

  2. There are lots of good products out there that will help you calculate the Duty and Taxes applicable so you can consider charging your customer the full and correct price at check out. The company you ship with should be able to help you with this but most important is getting the right 10 Digit HTS code, Country of Origin and accurate description. Critically, if you charge your customer an all in cost including D&T at checkout you need to remember when shipping to submit the value without D&T as FedEx will apply D&T on the value you submit them (tarriffs are bad enough without paying them twice!).

6

The previous replies cover the DDP vs DAP decision well. Here’s the practical “how to” for actually setting it up in Shopify:

Step 1 — Get your HS codes right. This is the foundation everything else depends on. You need the full 10-digit HTS code for US imports, not just the 6-digit base. Look up your products at hts.usitc.gov — search by product description or browse by chapter. The 10-digit code determines the exact duty rate.

Step 2 — Add codes to your products in Shopify. Go to each product → Shipping → Customs information → add HS code and Country of Origin. For bulk updates across many products, use Settings → Taxes & Duties → Manage → Update with CSV. Export, fill in the HS code and country of origin columns, re-import.

Step 3 — Enable duty collection. Settings → Taxes & Duties → Duties and import taxes → Set up. Select the US as a market where you want to collect duties at checkout. Shopify will use your HS codes and country of origin to estimate the duty amount and show it to the customer before they pay.

Step 4 — Ship DDP. When you generate shipping labels, make sure you’re using DDP (Delivered Duty Paid) so the carrier knows not to bill the customer again. The critical point from the reply above is worth repeating: submit the product value without the duties you’ve already collected, otherwise the carrier applies duties on top and your customer gets charged twice.

On the 50% rejection rate mentioned above: That’s real and it’s why DDP is worth the setup effort. With DAP, you’re gambling that every US customer will pay the surprise charge at their door. At 50% rejection, you’re eating return shipping plus carrier charges on half your US orders. DDP eliminates this entirely — the customer sees the full price at checkout, no surprises.

7

Digging this up from last year because the $800 rule change is still a mess lol. If you’re still waiting for FedEx to solve this for you, you’ll be waiting forever. They’ll just keep delivering and then sending you the bill when the customer ghosts. I almost had a heart attack seeing how strict the federal audits are getting, but reading a few articles on JD Supra about export investigations helped me stay ahead of the curve.

8

In my experience, customers often react very differently once the package is already moving and a carrier suddenly asks for more money.

Even if the duties were technically explained beforehand, the situation can still feel unexpected from the buyer’s side once it becomes a real payment request tied to an active shipment.

That’s usually where the support problems and refusals start.

9

Completely agree. Even if it is in the fine print, unexpected fees during transit always ruin the customer experience and create a massive headache for support teams.