Brexit deal may cause UK retailers to abandon the goods that EU customers want to return. Some of them are even thinking of just burning the items because it is cheaper to get rid of them than bringing them back to the UK.
Retailers said that the new EU trade deal had put costly duties on the returns when businesses are already struggling due to the pandemic.
UK Retailers Affected by Brexit Deal
According to the BBC’s report, the UK High Street and luxury brands have a massive volume of stuck items with courier services in Europe. However, none of the retailers had talked to the media about the issue.
The head of the UK Fashion & Textile Association or UKFT, Adam Mansell, said that it is cheaper for retailers to write off the cost of the goods instead of dealing with all of it. They can either leave it with the couriers or burn them.
Since January 1, numerous European customers have been presented with an unexpected customs invoice when they signed for goods that they have ordered from the UK. These new charges from customs result from the new trade deal with the United Kingdom, post-Brexit.
Mansell said: “It’s part of the ongoing small print of the deal. If you’re in Germany and buying goods from the UK, you as the German customer are the importer bringing goods into the EU.”
“You then have a courier company knocking on the door giving you a customs clearance invoice that you need to pay to receive your goods,” he adds.
Because of the sudden change in the custom charges, customers immediately rejected the goods and refused to pay additional surcharges. This issue then left the couriers to take them back to storage.
Around 30% of the items that were bought online were returned, according to the data from Statista. That meant that the large volumes of goods are heading back to the United Kingdom.
When the goods arrive back at depots in Europe, there is new customs paperwork that needs to be filled up.
Mansell explained: “Export clearance charge, import charge arrival, import VAT charge and depending on the rules of the good of origin document as well. Lots of large businesses don’t have a handle on it, never mind smaller ones.”
A document received by the BBC states that four major UK High Street fashion retailers are stockpiling returns in Ireland, Belgium, and Germany. One brand was charged with almost £20,000 so that they can get their returns back.
Couriers and freight businesses that ship items from the UK to Europe are experiencing long delays in getting their goods because of the new customs clearances.
Shona Brown from Speedy Freight, a courier service, said: “It’s a bigger change than we thought possible. Before, we’d get the order to Germany, and off, the driver would go.”
“Now we’ve got to do export entry detailing where was it made, the driver needs to go to the customs office at Dover, then customs in Germany on arrival, and then sort out the VAT. There are so many hoops to jump through, it’s so laborious,” Brown detailing the difficulties.
“You’ve got to have the manpower to figure out what to do. And with people working from home, it’s difficult. For small businesses, it is a huge thing for people to do,” she added.