What Is Non Delivery Compensation (NDC)?
Non Delivery Compensation (NDC) is a compensation service applies to Joom Logistics Registered Mail (RM) parcels.
In case a registered mail order was shipped by Joom Logistics, and refunded by Joom due to the logistic issues, the cost of the product refunded to the customer will be fully or partially compensated to merchant by Joom. In case of such orders are in confirmed delivery status, but refunded by Joom due to logistics issues, Joom will compensate the merchant as well.
Logistics issues include:
- Not delivered (according to the tracking information, the parcel was not delivered to the customer);
- Damaged (the parcel got damaged during shipping);
- Missing proof of delivery (according to the tracking information, the parcel was delivered, but the customer says that he didn't get it and there is no proof of delivery);
- Delivered to the wrong address (the parcel was delivered to the wrong address or the wrong person);
- Turned back by post office (the client forgot about the parcel in the post office and didn't receive it or refused to receive it, so the parcel was sent back to the merchant);
- Consolidation error (the consolidated parcel is missing some products or includes the products ordered by other customers).
⚠️ Please note:
- The NDC compensation is not applicable in case the parcel was returned to the merchant;
- The NDC compensation amount for ordinary orders is calculated after deducting the discount amount; the NDC compensation amount calculation for bloggers’ orders doesn’t deduct the Influencer Program Amount;
- NDC amount is calculated after a merchant fulfills an order, the Order Details page of an unfulfilled order will not show the NDC amount.
Which Orders Are Usually Shipped Via Registered Mail?
All orders with the Original Amount above $5 are shipped via RM. Some orders with the lower Original Amount can be shipped via registered mail as well, depending on a destination country, the product itself and other factors.
(Original Amount is the base amount for calculating the merchant payment. In case of online orders which use Joom Logistics for delivery: Original Amount = Price (per Item) × Quantity)
How Is the Non-Delivery Compensation Amount Calculated?
Non-Delivery Compensation Amount is the amount that will be compensated in case of a refund due to the logistic issue. Joom Logistics compensates the Merchant Revenue amount to the merchant, within the compensating maximum.
Non-Delivery Compensation Amount = Merchant Revenue
(shouldn't exceed the compensation maximum)
(Merchant Revenue is the amount Joom owes to the merchant for an order. The formula to calculate Merchant Revenue is: Original Amount - Competitive Price Reduction Amount - Discounts - Joom Take Rate).
⚠️ Please note: For orders approved before November 27, 2020, Non-Delivery Compensation covered either Merchant Revenue or Declared Value (always the smaller one).
Click here to see examples
|Order information||Refund (Merchant Revenue)||Non-Delivery Compensation Amount|
|Merchant revenue = $55||$55||
(Merchant revenue < 2,000)
|Merchant revenue = $800||$800||
(Merchant revenue < 2,000)
|Merchant revenue = $2,300||$2,300||
(2,000 < Merchant revenue)
⚠️ Please note: If a NDC covered order has been refunded partially, the NDC service will only compensate the corresponding part. For example:
- If order A is 100% refunded, the Non-Delivery Compensation Amount is $50. Thus, if this order is 50% refunded, the Non-Delivery Compensation Amount is: $50 * 50% = $25.
What Is the Compensating Maximum of NDC?
There is a maximum amount that can be compensated per order, the maximum is $2,000 for all product categories.
If the Merchant Revenue is higher than the maximum, only the maximum amount will be compensated.
How Is the Non-Delivery Compensation Amount Shown in the Invoices?
Earlier, the compensation amount was calculated from the refund amount for the order and wasn’t reflected separately in the invoice. Now, all the non-delivery compensation amounts are allocated to a separate non-delivery compensation invoice.
PLEASE NOTE: Non-delivery compensation invoices will always be included in the Joom SIA payments, even if the order was paid through the Joom USA.
What Do We Expect with the NDC Service?
With the service added, there is no extra costs for merchants, Joom Logistics costs for the customers might increase because now all the risks of non-delivery will be covered by Joom Logistics and not the merchant. So, we expect from our merchants:
- To exclude the risk of non-delivery while setting the product prices for mid-price and high-priced products and lower the product prices;
- To upload new unique products with competitive prices that were too risky to sell on Joom without the compensation.
👉 For more detail about Joom Logistics, please refer to our ▶️Live Stream replay about Joom Logistics.