We've spent the last few months trying our best to figure out how we can become compliant with new European Union regulations, and today we had to make the call to throw in the towel, at least for now. With our order volume already ramping up towards the busiest part of the year, and without important tools which would allow us to be compliant, we are going to have to discontinue shipping to the EU until we are able to get everything in place to ensure that packages are able to make it through customs.  

This is not a decision that we make lightly. In fact we make it after many painful hours of research, logistics, meetings, overhauling our catalog, and a certain amount of banging our heads against the wall, to try and make things work. Not only is this a significant financial loss, but it hurts to know that our socks won't be available to our EU customers this holiday season. It means something to us that people feel our products are good enough to ship across the world, at no small expense. We don't plan on giving up on this indefinitely, but we are a small team, and for now we need to focus our time and energy on meeting the demands of busy season.  

The first major obstacle is the new Packaging and Packaging Waste Regulation, which went into effect in August. This regulation aims to reduce and regulate packaging on all products being shipped to and between EU member countries. Let us start by saying that we fully support the goal of minimizing the impact of packaging materials, which is why we use recycled cardstock for the socks we manufacture, and ship our orders in recycled polymailers. The problem with this regulation lies not with its intent, but in the implementation. 

So, what does the new regulation require? It's complicated – some might even say convoluted! To attempt to simplify it, all packaging entering the European Union must now be registered. With each country. Separately. That's 27 separate registrations. But that's not all! Most countries also require foreign businesses to designate a representative already established in that country, to take legal responsibility for their obligations. From what we've seen, representation can cost around €200 a year per country, with very few countries waiving this requirement for even very small businesses like ours.

This is further complicated by the fact that we carry products from dozens of other suppliers, so while we can account for our own packaging, we don't have the information for all of our suppliers' packaging, and there's a good chance that most of them don't have it either, since this is not documentation that anybody had to create prior to this regulation. On top of that, many EU member countries don’t actually have a system of registration set up yet, which of course makes registration impossible.  

This is painful for us, but we really feel for the small businesses and artists in and around the EU, many of whom have either gone out of business already, or else had to cease shipping to neighboring countries where they can't afford the price of representation. The fact is that large corporations (who produce most of the packaging waste targeted by this regulation) are much better equipped to shoulder the financial and administrative burden of compliance. It's the small businesses who are being crushed by the way this regulation has been implemented.  

The second regulation we have to contend with is simpler, but is going to be much harder on customers once we are able to become compliant. This is the new €3 customs duty. On the technical end of things, this new regulation requires that we provide three new Product Identifier (PID) data points for every item on our customs forms: one from the Merchant (us!), one from our supplier, and a Standardized Manufacturer (e.g. UPC) code if it exists. 

Now we can get that data for most of our products, and we can do the spreadsheet magic needed to wrangle it into a useful format. Unfortunately our shipping platform does not currently have a way for us to import this data and generate customs forms with it. That could change by the end of the week, but with the new requirements going into effect on Sunday, November 1st, we most likely wouldn’t be able to have the system operational in time.  

Sending parcels to the EU without this data will most likely result in them being sent back to us, and international parcels do not have the best likelihood of making the return trip. Some countries actually destroy packages, rather than returning them to the sender, which makes it a pretty major gamble. Remember this, because it will come up again before this post is over! 

Customs and Handling Fees 

The thing that makes this regulation particularly scary isn't the technology and data required on our end: it's the new fees that our customers are being hit with. The new regulation applies a €3 customs fee to every line item in every order under €150. This is not €3 per order, but €3 per line item, so if you order ten different items, that will come to €30 in customs before even factoring in taxes, regardless of the price of the items in question.  

It is worth noting that buying multiples of the same item only results in a single fee, so if you were to buy ten of one item, it would appear as one line item, and only come to €3. We have yet to determine how this would apply to multiple colorways of the same item, but that's a question we'll definitely be looking for answers to before we resume shipping to the EU. 

However, the €3 customs fee is not all! There is an additional €2 handling fee per line item on all orders – not just those under €150. So for orders under the €150 threshold, customers will now be charged €5 in customs and handling fees per line item, in addition to VAT.  

Even before these new fees, we have often found that when international customers are hit with unexpectedly high customs charges, they often choose not to pay. In theory, the order is then “returned to sender” (RTS'd). As previously mentioned, this does not always mean that the order is actually returned to us. When orders are RTS’d due to unpaid customs charges, we are unable to issue refunds if they do not make the return journey, nor are we able to refund shipping costs for the orders that do make it back to us. This is a scenario that makes everybody involved unhappy, so we do our best to avoid it as much as possible. 

Thinking again about the first regulation, which requires us to pay to register and hire a representative in almost every EU member nation, we had been running the numbers, prioritizing which countries we would register with first based on previous years' order volume and whether they actually had a usable system in place. For some countries, hiring a representative would cost more than we make in their sales each year. And that was all before factoring in the likelihood of reduced order volume due to significantly higher customs and handling fees, or the risk of orders being RTS'd when people realize how high those fees are. 

With less than a week before the new requirements go into effect, we hope you can understand why we simply do not have the tools or bandwidth to sort this all out at this time. We believe that we will eventually be able to push through and begin shipping to (at least some) EU countries again, but it's just not feasible at the moment. 

We sincerely apologize for not being more forthcoming in our communication about what we've been dealing with. The last few months have been stressful and confusing for those of us who have been working on the problem (and being a small business, most of us have been involved in one way or another). More than anything, though, we feel like we've failed our European customers, many of whom have been loyal to us for years, if not decades. This was not an easy choice to make. Please know that while we are unable to move ahead today, we plan on fighting for you. We just need a little more time.