CANADA POST LOST A PARCEL AND IT COST ME 25% EXCHANGE

[torpedobottle]

I sold an expensive item to the U.S. in late September. With shipping fees, my paypal payment for this item was approaching $600 U.S. The exchange rate at that time was 1.03 in favour of the Canadian dollar. I always calculate the exchange rate into the shipping cost so the buyer pays the EXACT shipping cost.

I insured the parcel for $600 U.S. (at my cost and thank heavens I did!!!) Canada Post LOST the parcel. I had to file a claim and FINALLY received my refund cheque for $584.59 CANADIAN DOLLARS on Friday. I will refund the buyer FULLY (via money order so he doesn't get dinged with paypal fees) the above amount in U.S. dollars (since his paypal payment was in U.S. dollars). BUT!!!!, now the exchange rate is at almost 1.28 in favour of the U.S. dollar. So; that means that it WILL COST ME A 25% PREMIUM TO REFUND FOR A LOST PARCEL. WHICH MEANS IT WILL COST ME ALMOST $150 CANADIAN DOLLARS FOR A TRANSACTION THAT WAS NOT SUCCESSFULLY COMPLETED.

Anyone have any thoughts on how I can recoup this cost? Is that a cost that the CRA will allow as a deduction? Will paypal or Canada Post allow for the difference. I am being penalized through no fault of mine!! Or is that just the cost of doing business with Canada Post??

By the way; the buyer is an ace and is most understanding. But they are so disappointed they did not receive their rare treasure.

[duujogl]

Is that a cost that the CRA will allow as a deduction?
Definitely. You should report, on your income tax, ALL exchange profits and/or losses under miscellaneous income - speak to your accountant about that!

Will paypal or Canada Post allow for the difference
No. Your Canada Post Insurance is in Canadian dollars.

Or is that just the cost of doing business with Canada Post??
Again no. It's the cost of doing business internationally!

[recped]

If you had this happened last year when the Canadian Dollar rose by 30% would you be here complaining? Or would you have told Canada Post "Thanks but you don't need to pay me so much".

[torpedobottle]

Yes; I would have advised Canada Post if there was an overage on their part. I ALWAYS factor into every transaction whatever the exchange rate is. And; I keep my buyer copied and informed of all emails re this investigation, so there is nothing to hide here.

What I didn't state in my post and what really irks me,is that from the time Canada Post started the investigation until I received and cashed the cheque, the exchange rate just kept going up and up and was approaching a 10% rise from initiation time until cheque time!!!

I guess the next time, on a valuable item, I should overinsure the item. But are you allowed to hedge your bets on exchange rate increases in case the parcel is lost???

If so, I would have had to overstate the value of the parcel by approaching $300. Then when Canada Post asks for ALL info (ebay & paypal) they will see you sold (for example) a $500 item and then insured it for $800. What would Canada Post say? I'm sure it would like a scam to them. And this could cause a customs/duty issues for the buyer!!! Looks like a no win all around.

I'm sure they would pay you the ebay closing price. In fact, I KNOW they would. I insured the parcel for $600 CAN (insurance is in $100 increments), but they paid out in CAN dollars...which included both the ebay closing price and the postage paid. Everything is in CAN dollars. So; if you sell a $100 US item...and the exchange rate is at 25%, and the parcel is lost/claimed, they'll pay you $100 CAN (not the $125 CAN/$100 US the item sold for). Just thought, I am ALSO OUT MY PAYPAL FEES TOO!!

I really don't know what to do for future sales. It is something that I think should worry all sellers on any expensive international transaction.

Any thoughts by anyone on how to hedge your bets/protect yourself against something like this in the future?? BECAUSE, THIS COULD HAPPEN TO YOU TOO!!

[recped]

Yes; I would have advised Canada Post if there was an overage on their part.

Either you didn't understand my post or you are looking to get nominated as a saint!

Any thoughts by anyone on how to hedge your bets/protect yourself against something like this in the future??

Sure, list in Canadian Dollars, you will be 100% protected against currency fluctuations (both good and bad).

[snoopwiz]

I will refund the buyer FULLY (via money order so he doesn't get dinged with paypal fees)

If you haven't refunded your buyer yet, only refund through the refund tab, in Paypal. Your buyer will not get dinged for any fees.

[bits-n-pieces]

This is always problematic when dealing with exchange rates. A simple solution is to refund immediately and not wait to get the money in. That way you are sending back more or less what you received.

You may as well bite the bullet and refund quickly because if the buyer paid with Paypal, they will get their money back from you whether you ever get compensation from Canada Post or not.

As far as the tax situation - it is simple - for example if you have $500 in as sales and $600 out as a refund, you are getting the benefit of the $100 loss against your income.

[dipmicro]

I guess the next time, on a valuable item, I should overinsure the item.

I am curious ... how to overinsure the item without receiver paying more duties/taxes ?

Recently we had a buyer quite upset about us making a mistake marking parcel value C$65 instead of C$56, since 45 EUR is a personal exemption limit (will go up to EUR 150 from next week).

This is little off topic: Austrian customs mistook C$ for US$ (our C$65 would still work within exemption), so the mistake was not entirely ours. Customer had to pay 15 EUR in duties and he was quite upset and threatened with a neg. Even though not entirely our fault, the first mistake was ours, so I took the full blame and promised to refund his entire loss (easier than argue with customs). He was surprised, and acknowledged it was not entirely our mistake and suggested we'd split the loss.

[recped]

Austrian customs mistook

Unsure about Austria but I've heard from other Euro countries that there is no simple system (back of the customs form) for a recipient to challenge import charges like we have here in Canada.

Now I wonder if that because we are nice or Canada Customs makes a ton of mistakes?