I run a small (but successful) online auto parts store. We are selling a lot of product that I’m happy to say is manufatured by us, here in Canada with Canadian materials (so 100% CUSMA compliant)
We are shipping 5-10 packages a day to the USA. All good we have figured out the paperwork and that has been very successful since August 30th.
Now, the problem I’m having is when a customer receives their product and either a.) has to return it for warranty for whatever reason or b.) has to return it due to fitment issues.
Remember this is a USA back to Canada return as we are in NB.
I always ask them to send it USPS to avoid UPS/FEDEX madness & fees. If they put the original value of the product on the package ($150-$600) .. and send it with USPS, I’m getting hit with HST and last time a $9.99 handling fee from Canada Post.
My last return was something valued at $300, but I asked the customer to put a value on it of $100 … which ultimately was converted to CAD, I was charged 15% tax and $9.99 handling fee.
What should I have my customers doing, so I dont have to pay to get my own product back?
”Commercial value of $0.00” and write “Warranty Return” on the package? But then how would this affect insurance if it was a $500 item ?
How do I navigate this? Any advice would be amazing as I’m paying an arm and a leg to get my own product back, then shipping them replacements for whatever scenario is playing out.
Why $1-$20?
Because $0 value often gets flagged / questioned, but a small nominal value is accepted more easily.
This usually avoids HST + handling fees.
Also include the original tracking number or original order number inside the package for reference, customs looks at that and sees it’s your own product returning, not a new import.
This is the safest format I’ve seen:
• Description: Warranty return Canadian goods returning
• HS Code: same as the original product category
• Country of origin: Canada
• Value declared: $10 USD (example)
By the way are you handling all the store management + customer service by yourself?
Just curious because many store owners who deal with cross-border returns like this usually have multiple challenges at the same time (shipping + conversions + marketing).
How’s everything else going for you with sales and daily operations?
The gap I see here is Insurance. I we label the value of goods at $10 (for example) and it is worth $500 …. and gets lost/damaged (which happens more than you think) … I still lose.
I dont think you can put a commercial value of $10 on something, but yet insure it at a higher value ?
Yeah, this is one of those fun Canada-specific headaches. If a customer sends the return back like it’s a brand-new sale with the full value on the CN22/CN23 form, CBSA is just going to treat it like an import and ding you every time.
Our recommendations:
Have the customer mark the package “Warranty Return - No Commercial Value” or “Returned Goods”.
Don’t declare full retail value. Declaring $0 sometimes gets flagged, but something like $5-$20 is standard for returns.
Insurance value and customs value don’t have to match. They can insure for $300 and still declare $20, USPS doesn’t care, and neither does CBSA.
If you want to avoid this mess completely, send them a prepaid USPS return label from your side. That way you choose the customs wording and avoid the surprise taxes.
And if returns happen a lot, using a returns tool (like ParcelPanel Returns) makes it easier because the customer can’t mess up the customs details, everything’s pre-filled.
Hope this helps a bit! If it does, feel free to mark it as a solution so others can find it too
