Caitríona Redmond: The collapse of Fastway is not just bad news for consumers

Smaller enterprises depending on Fastway as their sole delivery partner could be seriously struggling at this point. Cash-flow is the life blood of business.

It's now been 20 days since the first news broke of Fastway going into receivership and, in a spectacular turn of bad or good news, depending on which camp you sit in, Christmas is fewer than 40 days away.

Before I start explaining how your online purchases may have been treated in the interim, it’s very important to recognise that the worst of the news has fallen on the former delivery people. Certainly, for the former staff and contractors of Fastway, it’s been extremely difficult news to bear.

It is estimated that there could be as many as 50,000 items missing in the system. That’s an awful lot of missing business supplies... including Christmas presents and clothes ordered by Irish consumers. Very few parcels in transit using the Fastway network have been delivered since October 28.

If your delivery has been lost in transit, it’s not all bad news.

When we order online, we enter into a contract with the retailer or vendor. That’s a promise that has to be fulfilled. It’s reciprocal — we pay the money and they have to make good on their promise to send on the products.

Let’s go back to the previous 20 days. Under Irish law, a retailer has 30 days to deliver an order. When we pay online, we pay the retailer for delivery. It’s very rare that we organise shipping separately. That makes the retailer responsible for making sure our order arrives on time.

What happens next?

In all likelihood, many customers impacted by the Fastway delivery service grinding to a halt are getting close to 30 days since they placed their orders. By now, the retailers should be getting in touch with people who have outstanding deliveries to make good. The retailers have 14 days to refund the customers and, once the money is back safely in their accounts, the customers can order again.

For customers who don’t hear back from the retailers, they have a number of options open to them.

First, depending on the type of card used to pay for an item, customers may be able to request a chargeback on a credit or debit card. They will need to have proof of purchase and potentially proof that the item has not been delivered. That shouldn’t be too difficult, especially if the customers have a dispatch email or tracking number.

The situation is similar for those who used PayPal to buy their products but they must log in, go to the Resolution Centre, and click ‘report a problem’. Select the transaction that matches the unreceived product and then proceed to explain the issue. PayPal will liaise directly with the seller and release the funds back to the customer fairly swiftly.

Paypal Resolution Centre

This all sounds well and good for consumers but it’s not a wonderful news story for some businesses, especially small to medium enterprises.

Larger retailers and businesses who operate a warehouse or drop shipping operation are kept going by the sheer volume of transactions. When a business is shipping tens of thousands of parcels per week, cash flow isn’t necessarily an issue. There’s a contingency plan, and often specific insurance, built into their systems which covers situations like delivery delays or 10% of their products being returned. In fact, some clothing retailers expect high volumes of returns, so they don’t draw payments back into the business for several weeks.

On the other hand, smaller enterprises which were depending on Fastway as their sole delivery partner could be seriously struggling at this point. Their parcels are lost in the black hole of the now-defunct delivery network and, while the money may be in the bank for now, it won’t be for much longer.

Cash flow is the life blood of business. For example, a crafter can’t buy materials to make more products without getting paid for what they’ve already sold. Let’s not forget that everybody has overheads and deserves a fair wage for time spent on what they make.

Some insurance policies may cover a business against a catastrophic loss of a week’s worth of products that are technically lost at this point. But we all know that claiming on an insurance policy now may result in a much higher cost in the future. When a small enterprise is operating on tight margins, an insurance policy premium that rises dramatically can mean the difference between running a profitable business or not. Worst-case scenario, we could see several firms going out of business because they can’t afford to refund customers for undelivered products.

There is no doubt that consumers who have paid for an item are entitled to a refund if it hasn’t arrived on time. My worry is that these refunds, which must be completed by mid-December, could be the death knell for some.

If you’ve been impacted by the collapse of the Fastway network and are upset that your order hasn’t arrived, a little bit of empathy and sympathy for the businesses affected will go a long way.

My advice to consumers is to collect your rightful refund but be kind.

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