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FedEx Launches $99/Month Shopify App for Cross-Border Duty and Tax Guarantees
FedEx has launched the 'FedEx Duty and Tax' Shopify app, part of its 'Global Trade Navigator' suite, to help merchants combat surprise import charges at checkout.
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What changed
FedEx has launched the ’FedEx Duty and Tax’ Shopify app, part of its ’Global Trade Navigator’ suite, to help merchants combat surprise import charges at checkout. The app costs $99 per month and provides a duty and tax guarantee to customers, with FedEx covering any overages to that amount. However, no refunds are issued if actual duties and taxes are lower than the guaranteed amount. The guaranteed amount includes a service fee. The app is currently available only on Shopify, though more availability is expected.
Why a business should care
Surprise import charges are a significant friction point for cross-border shoppers, with 68% of SMBs reporting customers are surprised by additional duties, taxes, or fees upon delivery. The FedEx app directly addresses this by providing a duty/tax guarantee at checkout, potentially improving conversion rates and customer experience for cross-border sales.
Who it affects
Cross-border merchants using Shopify, particularly small and medium-sized businesses shipping internationally.
What to consider doing
Cross-border merchants on Shopify should pull their current checkout abandonment reports for international orders and compare the projected $99 monthly app cost against the potential revenue recovered from reduced cart abandonment due to surprise import charges.
Uncertainty and risks
Adoption of the app introduces a new $99/month cost. Merchants must also manage the operational aspect of the guarantee, including the fact that no refunds are issued for underages, which could affect customer satisfaction if not communicated clearly. The service fee included in the guaranteed amount might impact conversion rates if perceived as too high. FedEx launched the ’FedEx Duty and Tax’ Shopify app, introducing a $99/month cost for merchants to offer a duty/tax guarantee at checkout. The app guarantees a total landed cost, with FedEx covering overages but no refunds for underages. This changes the checkout experience and introduces a new operational and financial consideration for cross-border merchants.
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