Fast facts:
Duty Paid vs Duty Unpaid

2025 Facts and Best Practice for eCommerce

Warehouse worker with clipboard
Warehouse worker with clipboard

Expanding your eCommerce business internationally brings huge opportunity but also hidden costs if duties and taxes aren’t managed correctly. One of the biggest decisions retailers face is whether to ship Delivered Duty Paid (DDP) or Delivered Duty Unpaid (DDU). The difference determines how smoothly your parcels clear customs, how many are returned and how happy your customers feel at checkout.

Person filling out paperwork

Understanding the difference: DDP vs DDU

DDP (Duty Paid) = the buyer pays duties and taxes upfront at checkout, to ensure the parcel clears customs seamlessly.

DDU (Duty Unpaid) = the buyer pays duties on delivery. A simpler process for eCommerce businesses, but customers may reject parcels If they’re faced with unexpected fees.

Why this matters more in 2025 

With 2025 bringing tariff unpredictability and increased enforcement at customs in US and abroad, the difference between DDP and DDU can make or break where international selling is profitable for your business. But experts are unanimous and collecting duties upfront is best practice for cross-border selling.

Key industry stats around DDU and DDP

  • 10% of DDU parcels are refused or returned due to unexpected customs charges (FlavorCloud, 2025)
  • 61% of merchants display duties at checkout, up sharply from previous years (Avalara, 2024).
  • Showing landed cost “nearly eliminates surprise-fee refusals” (Filuet, 2025).
  • Carriers like DHL now recommend DDP for most e-commerce shipments (DHL Discover, 2025).

Why duty paid (DDP) outperforms duty unpaid (DDU)

DDU DDP
Low return rates ❌ ✔️
High checkout conversion ❌ ✔️
Smooth delivery ❌ ✔️
Protection against 2025 tariff volatility ❌ ✔️

1. Lower return and refusal rates

DDU parcels frequently get rejected by customers when they realise there were additional costs they needed to pay. When they are refused, businesses face return shipping and duty loss that can end up costing more than the product itself. 

2. Higher checkout conversion

Customers tend to abandon their carts when duties appear vague, so transparent customs cost improves trust and increases conversions.

3. Smoother delivery and support

DDP prevents delivery delays and surprise invoices, reducing issues with customer service or bad reviews. 

4. Protection against 2025 tariff volatility

With ongoing US tariff changes and shock headlines, showing total duties at checkout protects your business and reassures customers. (Yale Budget Lab, 2025).

location pin with the US flag

Spotlight: The US in 2025

The United States remains the largest eCommerce import destination but in 2025 it’s the most unpredictable when it comes to tariffs and de minimis thresholds due to: 

  • Greater customs scrutiny for certain products and categories.

  • Tariff talk in political headlines causing consumer anxiety over price hikes.

  • Businesses using DDP messaging (“no surprise fees at delivery”) are outperforming those who rely on DDU by maintaining trust during tariff news cycles (Bloomberg Trade Desk, 2025)

  • The U.S. has ended the de minimis duty-free exemption for low-value imports effective 29th August 2025. Now nearly all parcels imported into the USA, including smaller value eCommerce orders, may be subject to duties and full customs entry. In light of this change, DDU (Duty Unpaid) shipments are at increasing risk of being held up, returned or refused unless the duties and taxes are collected in advance.

  • 68% of U.S. consumers aged 16-24 who bought internationally said they’d experienced surprise customs fees at delivery.

  • Plus, 75% of global consumers said they’d rethink buying again from a retailer after such surprise fees.

eCommerce businesses shipping to the U.S. can no longer treat duties as ‘optional’ or ‘unexpected’. Collecting duties at checkout (DDP) is becoming the  best practice for orders heading to the US.

Best practice checklist for eCommerce businesses

  • Show duties at checkout
    Use a tax and duty calculator to ensure all duties are displayed transparently

  • Collect duties at checkout wherever possible
    Even if margins are tight, upfront collection prevents costly returns.

  • Communicate clearly
    If you must ship DDU, pre-warn buyers at checkout and through delivery emails to reduce refusals.

Best practice checklist for eCommerce businesses

  • Show duties at checkout
    Use a tax and duty calculator to ensure all duties are displayed transparently

  • Collect duties at checkout wherever possible
    Even if margins are tight, upfront collection prevents costly returns.

  • Communicate clearly
    If you must ship DDU, pre-warn buyers at checkout and through delivery emails to reduce refusals.

Businesses who’ve switched from DDU to DDP report:

  • Delivery success rate increases of 5 to 15%.
  • Return volumes dropping by 20 to 30%.
  • Higher customer satisfaction and fewer customer service issues

DDP vs DDU quick comparison

Duty Paid (DDP) Duty Unpaid (DDU)
Duties collected At Checkout At delivery
Delivery success rate 90–98 % 80–90 %
Return/refusal risk Low High (~10 %)
Customer satisfaction High Low
Recommended for Most cross-border sales Limited, niche cases

International shipping is complex but customer experience is key in 2025 and transparency always wins. Whatever country you are selling into, Duty Paid (DDP) isn’t just a logistics decision, it’s a customer experience strategy.

FAQs — Duty Paid vs Duty Unpaid 

Duty Paid (DDP) means duties and taxes are collected at checkout, ensuring faster customs clearance.

Duty Unpaid (DDU) means the customer pays on delivery, which can cause delays and higher return rates.

Most eCommerce experts recommend DDP because it reduces refusals, improves delivery success and increases checkout conversions. DDU is riskier when customers face unexpected fees.

When duties are unpaid at checkout, buyers are surprised by customs charges at delivery. Many reject or abandon their orders, creating costly returns eCommerce businesses.

Tariff uncertainty in 2025 makes DDU even riskier. Collecting duties upfront with DDP gives buyers transparency and protects businesses from drastic tariff changes.

Sources

docs.global-e.com, Avalara, DHL, FlavorCloud, filuet.com, The Budget Lab at Yale, Bloomberg, Avalara Newsroom, and WooCommerce.

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