Background

On occasion, merchants include freebies or promotional items in shipments to buyers.

These items can be included for several reasons:

1. Customer Loyalty: Offering free items can enhance customer satisfaction and loyalty, encouraging repeat business.
2. Brand Promotion: Freebies can serve as a marketing tool to promote new products, raise brand awareness, and attract new customers.
3. Increased Sales: Promotional items can incentivize larger purchases or motivate customers to buy more frequently.
4. Competitive Advantage: Including extras can differentiate a merchant from competitors, making their offer more appealing.
5. Product Trials: Free samples allow customers to try new products without risk, potentially leading to future sales.
6. Customer Appreciation: It’s a way to show appreciation to customers for their business, fostering a positive relationship.
7. Inventory Management: Distributing promotional items can help clear out excess or overstocked inventory.

Why is this an issue?

Including freebies or promotional items in a shipment can pose problems for a customs commercial invoice due to the following reasons:

1. Customs Valuation: Customs authorities require a value for all items in a shipment to assess duties and taxes. Free items with a zero value can complicate this process, as customs needs to ensure all goods are properly valued.
2. Accurate Documentation: Customs regulations mandate that all items, even freebies, be documented accurately on the commercial invoice to prevent misdeclaration and underreporting.
3. Duty and Tax Assessment: Even free items may be subject to import duties and taxes based on their declared value. Not assigning a nominal value can lead to delays and penalties.
4. Compliance and Transparency: Properly listing all items, including freebies, ensures compliance with international trade laws and maintains transparency in the shipping process.
5. Avoiding Delays: Inaccurate or incomplete documentation can result in customs delays, inspections, or even the refusal of entry for the shipment.
6. Risk of Fines: Misreporting the value of items, even if unintentional, can lead to fines and legal issues with customs authorities.

How to tackle this challenge?

To mitigate these issues and ensure compliance with customs regulations, merchants should:

• List all freebies and promotional items as line items on the commercial invoice.
• Assign a nominal value for customs purposes.
• Clearly marking them as promotional or free samples.

This approach ensures compliance with customs regulations and facilitates a smoother import process.

Possible Solutions

1. Merchants fix at source - start providing nominal values for all free / promotional items in your eCommerce platform.
2. Order value updated manually – Manually adjust the value / description during label creation, before printing the label.
3. Utilise the Product Catalogue – DHL Express Commerce includes a Product Catalogue feature allowing merchants to store all relevant details about their products, including SKU, Content Description, HS code and bin location. For each SKU that is offered as a free item / gift, update the value to provide a nominal value, and also add some text in the 'Description of Content' field, including a note to advise that the value provided is for customs purposes only.
   These details can then be used to overwrite data passed from the platform, when an SKU match is found.
   
   For more information on the Product Catalogue, please take a look at this article