Goes Against the Grain by Charging a Handling Fee

Credit Card

Recently, I was the benefactor of a handsome gift card, courtesy of a promotional credit card offer. So while this post may seem a nit-picky, I am using it to illustrate how a powerful brand has decided to go against established e-commerce practices. Is it paying off? We’ll have to wait and see. In the meantime, here’s the back story so you can decide whether this is a smart move.

Historically, handling fees have not been charged by e-commerce vendors. One has to look no further than the “big guys” – Amazon, Walmart, Target – to see that these e-commerce stalwarts do not charge a handling fee. In fact, the big guys seldom charge shipping fees, provided you make a minimum purchase amount, typically somewhere between $25 and $50 dollars.

Sure, the big guys can absorb the costs. Making it up by volume, as they say. They have enormous buying power and therefore can offer very low prices. Even on items that have extremely low margins or high shipping costs (due to weight and/or size).

In fact, the only vendors left that charge handling or processing fees tend to be the ticket sales vendors such as StubHub and Ticketmaster. Consumers have no choice but to purchase tickets from these platforms, so they are forced to pay these extra fees.

But let’s get back to NFL jerseys for now. The actual cost of manufacturing a jersey is under $20, typically done overseas in a place like China. The vendor then has to pay expensive licensing fees to the league which are eye-popping on a per unit basis – several dozen dollars. From there, they then wholesale the jerseys to vendors (at a 100% markup) and then the vendors sell them to the consumer at 100% markup. That’s how a $20 jersey becomes $350. Don’t forget tax, too.

Start eliminating steps along the way by manufacturing jerseys and selling directly to consumers, and the vendors can keep the prices the same, but double profits.

Simply put, the jersey market is extremely profitable. There are downsides too, such as manufacturing too many jerseys of a player who then retires, gets injured, is traded, etc… those jerseys become difficult to sell. Manufacturers have become very smart though, printing jerseys on-demand or “shells” where they can then apply the name and number locally once ordered. This costs a bit more to do, but limits production waste.

So, needless to say, when I recently went to use my gift cards, I was surprised that after purchasing two jerseys for about $250 (these were not the game jerseys, but a cheap quality version), I was not only charged $4.99 for standard shipping, but also $1.99 for “handling”. Now, again, I’m not going to complain. Not only did I have gift cards, but I also had a coupon code. So I’m quite happy with my purchase, and the price I paid compared to the Buccaneer’s stadium shop (which I get a 15% discount at as a season ticket holder), was still better. I’m simply perplexed that these were two line items on such a high-margin sale. I probably would not even be here writing this article had the e-commerce site simply rolled the handling charge into the shipping charge and just charged me more for shipping. Charge me $6.99 and make an extra penny while you’re at it. I would not have known the difference.

So I decided to tweet the to see what would happen.

And I got a good, prompt response:

So I DM’d them my order number and got this response very quickly:

Thank you for that. Our apologies. Upon review of your order we see you weren’t charged the processing fee. Can we assist you with anything else?

This surprised me, so I took a look at my order confirmation email which shows the fee:

And then logged into my account on the to review the order invoice (yes, I told you I had a lot of gift cards and a coupon – I’m not complaining about the price, just the practice and customer experience):

And viola, interestingly they combined the charge post-haste. That’s extremely odd. I cannot recall ever seeing a vendor do that.

So for fun, I’ve loaded up my cart with two more jerseys, and here’s a screenshot of my cart. Notice the $1.99 handling charge. The “i” icon, when clicked, shows this text: “Handling Fee is applied to your order to help cover the fulfillment costs of storage and packaging.” in a pop-up bubble. Also note, that the site is running a free shipping promotion, but in fine print excludes the jerseys.

So, I replied to the DM tweet thread and explained that I was, in fact, charged the fee and would be happy to show them the screenshots (which I then included.) The next day I received this note:

We see, and we are so sorry about this issue. Normally, there is a flat rate incurred for shipping & handling. We greatly appreciate you bringing this to our attention, and we will escalate this feedback to the appropriate department for further review.

Again, I wasn’t demanding a refund or being unruly, and I give props to their team for timely replies. I think they should have simply refunded the $1.99 fee, plus the shipping and handling since I took the time to point this out. Nonetheless, I’m moving on.

Ultimately, this whole experience seems a bit shady and easily avoidable. If they need this extra $1.99 on top of their high margin items, they should roll it into shipping. But I think you can win a lot of favor among fans and customers by implementing more consumer-friendly e-commerce practices. When the major e-commerce experience is a certain way thanks to the big guys, other vendors need to hop on that bandwagon or risk alienating customers further.

Update 12/1/2020

While unrelated to the shipping and handling experience I wrote about above, I’d like to share another experience worthy of a few moments. The jersey I ordered in the above post in August, five months ago, still has not arrived. When ordered, I was told it would be shipping in September. Obviously, COVID messes up things, and their off-shore supply chain was likely affected. A couple of months ago they sent me an email apologizing for the delay assuring me that it would be express shipped to me as soon as it was state-side in December, and that should be no later than 12/17. I was offered the opportunity to cancel, but I did not. Then, two weeks ago, I received a call from them offering me a $50 refund or a gift card. Since I paid via gift card, I simply requested the gift card.

Both of these gestures were nice, given the situation, and I appreciated them. I used the new gift card, and a black Friday sale, to purchase a jersey that was in stock. To my surprise, it arrived two days later. That obviously exceeded my expectations. The quality of the jersey however, did not. I’ll save that for another day.

%d bloggers like this: