Shopify has announced a significant update to the way merchants manage duties and import taxes when shipping to the United States. This enhancement introduces the option to align duty calculations with postal tariff rates, providing greater flexibility for businesses using postal carriers like Canada Post.
Key Takeaways
- Shopify merchants can now choose to calculate duties based on postal tariff rates for US-bound packages.
- The new option benefits those shipping via postal carriers, differing from the default commercial carrier method.
- Applicable to all international checkouts with US destinations, regardless of the chosen shipping method.
- Setting can be toggled within Shopify admin under duty settings.
Overview of the Duty Calculation Update
Previously, Shopify applied the same import tariff rate calculations for both commercial and postal shipping carriers. These calculations, based on the Harmonized System (HS) Code and the country of origin, mirrored the method used by US Customs for commercial deliveries.
Now, Shopify gives merchants an additional option. When enabled, the system will compute duties using an Ad Valorem method, referencing only the country code of origin. This approach matches the postal tariff rates commonly applied to packages sent via national postal services.
How This Impacts Merchants
This update allows merchants who use postal services — such as Canada Post — to benefit from potentially different (often more favorable) duty assessments. It’s a useful adjustment for businesses seeking to optimize delivery costs and better serve US customers with packages sent through postal routes.
In practical terms, switching to postal tariff rates can:
- Reduce overall import duty costs in some cases
- Align calculations with postal carrier requirements
- Streamline checkout experience for merchants and buyers
How to Enable the New Postal Tariff Rate Option
Merchants can easily activate this feature:
- Log in to the Shopify admin panel.
- Navigate to the duty settings section.
- Check the box labeled “Use postal duty rates into the United States.”
Once turned on, all international orders destined for the US will use the postal tariff approach, regardless of other shipping selections. This gives sellers finer control over landed costs and helps to avoid overpaying on duties where postal rates differ from commercial ones.
Implications For The E-Commerce Community
Shopify’s update underscores a broader trend of e-commerce platforms providing more nuanced tools for international trade compliance. For merchants, especially small businesses sending smaller parcels to the US, the update means:
- Better alignment with postal carrier tariffs
- Possible savings on duty and tax costs
- Enhanced transparency for buyers regarding total landed costs
Ultimately, this feature equips sellers to stay competitive and compliant in the global market.
