Package didn’t arrive? Don’t get caught between retailers and shipping companies

Canadians are shopping online in record numbers during the pandemic — sales almost doubled from $1.6 billion in February to $2.8 billion in August, according to Statistics Canada.

But what happens when those items don’t arrive? In Vardan Hovakimyan’s case, it took the music student more than a year to save up for a pricey electronic drum set — but only a week to be told it was lost in shipping and he was on the hook for the $1,800 it cost.

The 40003 Speedlight Electronic Drum Kit was shipped in two boxes. Only one arrived at the Purolator outlet on Sept. 16, missing key pieces and rendering the set useless.

Things got complicated when Hovakimyan asked for a refund. He spent weeks going back and forth between the shipping company and the retailer, trying to get them to track down the missing box or give him his money back.

Purolator said it would look for the package, but he’d have to deal with the seller if he wanted a refund. The seller, Acclaim Sound and Lighting in North Bay, Ont., would only offer a replacement if the set was back in stock sometime in the future — or give him the $100 it got from shipping insurance.

“I was humiliated and very, very, angry,” Hovakimyan told Go Public. “It just felt so wrong.”

Consumer laws are on the side of online shoppers when deliveries go missing, but experts say taking advantage of those laws is harder than it should be, made more complicated when companies try to shift the cost of lost parcels onto buyers in their policies.

“It’s certainly not unusual that companies will write policies that are one-sided and intended to make consumers feel they have fewer rights than they do,” said Ken Whitehurst, executive director of the Consumers Council of Canada.

Whitehurst says some company policies indicate the buyer is responsible for merchandise that’s lost in shipping, even though consumer laws clearly say the retailer is responsible.

He says buyers often think they are at the mercy of those store policies. Hovakimyan did, after reading Acclaim Sound and Lighting’s shipping policy, which says the customer assumes “the risk of loss” once an item is shipped.

“There are contradictions between the laws and the [stores’] policies … customers don’t even know what they’re facing,” Hovakimyan said. 

Acclaim Sound and Lighting owner, Tim Hazelwood, tells Go Public the store’s policy is there to protect his small business from losses it can’t afford when shipping companies lose merchandise. He said he wasn’t aware of the consumer protection law. 

“I’ve never heard of that and I’ve been in business for 30 years,” Hazelwood said, adding small retailers are at a huge disadvantage when it comes to online sales because it’s harder for them to absorb losses and because bigger companies like Amazon and Walmart get better deals on shipping costs.

The company refunded Hovakimyan’s money more than a month later, but only after Purolator located the missing box in one of its warehouses.

Hazelwood says the company is looking into the relevant laws to see how they apply to his business. 

Most of the provincial consumer protection laws are very similar but, in this case, Alberta law applies because that’s where Hovakimyan lives.

WATCH | Who’s responsible when your package doesn’t arrive?:

A look at two shoppers who’s online orders never arrived, with some tips on what you should do before making online purchases. 2:11

Signed for, not delivered

Then there’s Kamyar Yousefi from Vancouver. He only got his money back after CCTV footage of his building’s mailroom revealed his online order was never delivered, despite getting a “proof of delivery” email notification from FedEx saying he’d signed for the package.

“They put my name as a person who’s signed it, but I didn’t sign anything,” Yousefi said about the $330 online order he placed in August with fashion retailer Diesel.

Yousefi says FedEx wouldn’t take his concerns seriously at first. He says it was only after Go Public contacted the company that it sent someone to his building to investigate and confirm the package never arrived.

He also wasn’t sure that Diesel would give his money back, since its policy also shifts the responsibility of lost packages to buyers once an order leaves the warehouse.

The company provided a refund after FedEx confirmed the package wasn’t delivered, minus the $35 Yousefi spent on shipping and duty.

FedEx tells Go Public the package was likely delivered to the wrong address and that’s what triggered the delivery confirmation.

It says the seller didn’t request a signature on the delivery. FedEx, along with other shippers, has implemented  “no contact” deliveries during the pandemic, which means no signatures for most shipments.

So who’s responsible?

The majority of provincial consumer protection laws are “firmly on the side of the consumer,” according to Jeff Orenstein, lawyer and owner of the firm Consumer Law Group, which deals with class-action lawsuits related to consumer protection. 

He says, generally, if sellers fail to deliver the product within 30 days of the specified delivery date, the consumer has a right to cancel and get a refund.

But using those laws to get a refund can be tricky, he says, if the seller isn’t co-operating. Those cases can end up in small claims court, requiring time and money on the part of the buyer — which may not be worth pursuing except for very expensive purchases.

“That’s sort of where the practical reality and the law collide and it becomes more problematic,” he said.

Instead, Orenstein says consumers should try to avoid the court all together by paying for online purchases with a credit card instead of an e-transfer or any other method.

Hovakimyan paid for the drum set using his Visa debit card and Yousefi paid for his clothing by credit card.

Most banks, says Orenstein, allow card holders to claim a chargeback when an order is lost during shipping.

Whitehurst, the consumer advocate, says the same thing, but cautions online shoppers to make sure they know their banks’ chargeback policies before using their card to make a purchase.

Banks and credit card companies often have specific rules around how to apply for a chargeback and how quickly after the purchase that needs to happen. 

He also recommends researching shipping policies before deciding where to shop, pointing out larger retailers often make getting a refund easier due to the volume of sales.

Hovakimyan says he’s sworn off online shopping after his experience. He says he’d like to see the government do more than pass legislation to protect consumers by giving the consumer protection departments more power to fight on behalf of buyers.

“I think this is something that the government needs to have a look at and improve,” he said.

Yousefi says he’d like to swear off online shopping, but will likely have to continue doing it because of the pandemic.

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