File a Shipping Damage Claim

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When to use this workflow

• Customer reports a damaged package upon delivery
• Carrier evidence (photo, inspection) confirms damage in transit
• You need to file a claim with the carrier for reimbursement
• You need to send a replacement or issue a refund

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Immediate steps when damage is reported

Timeline: File carrier claims within 24-48 hours of reported damage.

1. Ask customer to photograph the damaged item and packaging.
2. Request photos of the shipping box exterior (for evidence of impact/crushing).
3. Do NOT discard the item or packaging until the carrier inspects (if required).
4. Note the date and time damage was reported.
5. Gather the tracking number and shipping label details.

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Gather shipment evidence in Arcus

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Step 1: Identify the carrier and package

Open the shipment in Arcus:

1. Click Orders and find the order.
2. Open the fulfillment/package area.
3. Use the package actions menu to view the shipping label, track the package, or view the packet when available.
4. Note the carrier, service, tracking number, package status, and whether the shipment was insured.

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Step 2: Check insurance and declared value

If the label was purchased through Arcus, the package carrier tab can show shipment insurance context:

• Shipment insured or Will be insured with declared value.
• Not insured when the package did not meet the insurance rule or no declared value was set.
• Manual declared value overrides, when used before the label was purchased.

The insured value is locked once a label is active. Do not void or re-buy labels just to change insurance after damage is reported.

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Step 3: File the claim with the carrier

File the claim through the carrier or Shippo workflow your team uses:

1. Visit the carrier’s website (UPS.com, FedEx.com, USPS.com).
2. Select File a Claim or Damage Claim.
3. Enter the tracking number.
4. Answer the damage assessment form.
5. Upload photos (item damage, box damage, packing material condition).
6. Submit.

Timeline for carrier response: 7-14 business days.

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Step 4: Document the claim in Arcus

1. Open the order.
2. Upload photos or supporting files in the order documents area if your team stores evidence there.
3. Add an order note with:
   • Claim number from carrier
   • Date claim filed
   • Item value claimed
   • Expected claim outcome date
   • Whether the customer kept the packaging for inspection

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Provide customer resolution

While the carrier claim is in process, decide on customer recovery:

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Option A: Send a replacement

1. Open the original order.
2. If the original order is eligible, click Create Return and choose Advance replacement (ship new item immediately).
3. Select the damaged item and use reason Damaged in transit.
4. If a return is not the right path, duplicate or create a new sales order for the replacement and reference the carrier claim number in the notes.
5. Tell the customer when the replacement will ship and whether they need to hold the damaged item or packaging.

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Option B: Issue a refund

1. Open the original order.
2. Click Issue Refund, or click Create Return and choose Refund only (customer keeps item) when a return record is useful.
3. Select the damaged item(s) and reason Damaged in transit.
4. Enter the refund amount.
5. Confirm the refund.
6. Inform customer: “We’ve issued a refund of $XX for the damaged item. Once the carrier pays our damage claim, that reimbursement is yours.”

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Option C: Send replacement + refund (high-value items)

For valuable items:

1. Send a replacement (see Option A).
2. Issue a small refund for the inconvenience (50% of item value or a fixed amount like $25).
3. Inform customer: “We’re sending a replacement and crediting your account $XX for the trouble.”

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GL impact

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When claim is filed

No GL entry. This is a contingent asset (potential recovery).

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When carrier approves the claim

A GL entry records the recovery:

• Debit: Cash/Accounts Receivable (amount recovered)
• Credit: Shipping Loss / Claim Recovery (income account)

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When you issue a refund to the customer

GL entry reverses the original sale:

• Debit: Returns/Refunds (sales contra account)
• Credit: Accounts Receivable (or Cash, if refunded immediately)

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Tracking the claim status

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Check claim status with the carrier

1. Visit the carrier’s website (UPS, FedEx, USPS).
2. Search by claim number.
3. View the status: Pending, Approved, Denied, Paid.

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Update Arcus with claim status

1. Open the order.
2. Add an order note with the claim status, date, amount approved or denied, and next follow-up.
3. Upload any carrier letter, inspection result, or claim payment proof to the order documents area.
4. If the customer resolution changes, use Create Return, Issue Refund, account credit, or a replacement order as appropriate.

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Common outcomes

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Damage claim tips

• Act fast: Report damage within 24 hours of delivery. Late reports may be denied.
• Preserve evidence: Keep packaging, photos, and communication until claim is resolved.
• Document everything: Note the date, time, customer name, item value, and photos in Arcus.
• Follow carrier procedure: Each carrier (UPS, FedEx, USPS) has specific claim forms and deadlines.
• Know your limits: Carriers cap claims per package and per year. Check carrier’s terms.
• Reshipment urgency: Send a replacement quickly even if the claim is pending; customer satisfaction matters more than waiting for carrier reimbursement.

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