Exporting to the United States – A Team Canada Inc Publication

3.5 Payments, returns and warranties in direct selling

If you intend to sell directly to your U.S. customers, you'll need efficient methods of handling payments, returns and warranties. Your specific solutions will vary according to your particular business and product, but the list below describes some of the factors you'll need to consider.

Payments

You might deal with payments in U.S. funds by:

• converting them to Canadian funds when you receive payment;
• using a U.S.-dollar bank account at your Canadian bank; or
• using a U.S. bank account.

Remember to account for any fees the bank will charge for handling the payments.

Returns

You might deal with returns by:

• having the returns shipped directly back to Canada by the buyer;
• renting a U.S. warehouse to store returns until there are enough to merit a shipment back to Canada; or
• subcontracting a U.S. company to collect your returns and deal with them, or ship them back to Canada.

Remember that you might have to pay customs-brokerage fees and shipping costs when the goods are returned to Canada (although you can require the customer to pay the shipping costs). Although these costs might make a return policy prohibitively expensive, don't forget that a "no returns" policy could make your customers go elsewhere.

Warranties and guarantees

If the product is returned to Canada, you might incur customs-brokerage and shipping costs. Given this, it might be cheaper to have a U.S. subcontractor handle warranties and guarantees, including the repair of the product if necessary. Again, these cumulative costs might force you to consider whether such policies are feasible. Remember, though, that many buyers won't purchase anything if it doesn't come with a warranty or guarantee.