This year’s Black Friday will be the first peak trading season under the EU’s new customs rules for low-value ecommerce imports. For UK retailers selling into Europe, the challenge is no longer simply generating more orders. The real question is what happens to margin when higher customs costs, more complex peak-season baskets and the January returns wave are added to the equation. With Q4 planning already under way, retailers still have time to model that exposure before volumes rise.

Black Friday falls on 27 November this year, but the decisions that will determine its profitability are being made now. Retailers are planning promotional ranges, discounts, inventory and logistics for the most important trading period of the year. This peak will be different. Every parcel entering the EU from outside the bloc is now subject to a €3 charge per tariff line under the new low-value import regime. It is not simply €3 per parcel. Goods sharing the same tariff classification, description and country of origin can sit on one declaration line and carry one €3 charge, regardless of the number of units. Different categories can create separate lines.

From 1 November, Product Identifiers are also due to become mandatory on distance-sales customs declarations, including a standardised identifier such as an EAN where one exists, a non-standardised identifier where it does not, and a merchant identifier. For UK retailers, Black Friday will therefore be the first major stress test of the new system at peak volumes.

More orders do not automatically mean more profit

The €3 charge looks relatively small in isolation. The problem is what happens when it meets peak-season shopping behaviour. Black Friday and Christmas baskets tend to contain more products and more categories. A customer who buys one item in a quieter month may buy several during peak, particularly when shopping for gifts.That matters because the number of tariff lines can increase with basket complexity.At an average of 1.6 tariff lines per order, the duty is €4.80. At 2.8 lines, it rises to €8.40. The cost per order is therefore increasing at exactly the point when retailers are processing their highest volumes.

“Retailers should not look at the €3 charge in isolation. What matters is the economics of the entire order. How many tariff lines are in the basket? What happens to that basket after the Black Friday discount? What does it cost to deliver it into Europe, and what happens financially if the customer sends it back? Those are the numbers that determine whether cross-border growth is actually profitable,” says Paweł Zakielarz, CEO of Shopreturns, a company supporting ecommerce businesses with cross-border logistics and returns.

For Zakielarz, this is the distinction retailers need to make before peak: sales growth and profitable growth are not the same thing.

Black Friday discounts can change the customs calculation

Promotional pricing creates another variable. A basket that sits above €150 at full price can fall below that threshold after a significant Black Friday discount, changing the customs treatment that applies to the order. For qualifying UK-origin goods under the UK-EU Trade and Cooperation Agreement, a basket above €150 can in some circumstances be subject to 0% duty under normal tariff rules. Discounting that same basket below €150 can move it into the €3-per-line regime.

That means a promotion designed to increase conversion can also change the cost of serving the order. Retailers should therefore model planned discounts against the €150 threshold before campaigns go live. They should also check that shipping is not being incorrectly included in the intrinsic value calculation, as this can push an order across the threshold.

“Peak planning is usually dominated by demand: how much will we sell, which products will convert and how aggressive should the discount be? This year there needs to be another layer to that calculation. Retailers should model what happens to margin after the promotion changes the value and composition of the basket. A discount can change more than the selling price,” says Zakielarz.

Gift bundles deserve particular attention

Gift sets are an obvious Black Friday and Christmas product, but under the new regime they can also create one of the clearest examples of how basket structure affects cost. A four-component set can potentially create four tariff lines and €12 in duty. Genuine retail sets can sometimes be classified under a single heading, but that needs to be established correctly rather than assumed. The question should be resolved with a customs specialist before promotional ranges are locked. The same principle applies more broadly to the Black Friday catalogue. Retailers do not necessarily need to review every product they sell before peak. They do need to know that the HS codes and Product Identifiers attached to their promotional range are correct. From 1 November, Product Identifiers are due to become mandatory. Doing that catalogue work before peak means the new requirement becomes part of normal preparation rather than another operational issue arriving in November.

Delivery is only half of the cross-border equation

For UK retailers, the customer experience also depends on what happens when the parcel reaches Europe. If duties are not settled before delivery, the customer may face the €3 charge plus a carrier disbursement fee, typically €5 to €15, before receiving the parcel. During the gifting season, that can be particularly damaging. A parcel delayed because payment is required is not simply an operational inconvenience if it misses the occasion for which it was ordered. That is why retailers should know the full landed cost of the order and ensure EU shipments are delivered duty paid, with no unexpected charge at the door. But delivery is only the first half of the economics. The second begins when the customer decides to return the product.

The real Black Friday P&L closes in January

Returns are where peak-season economics can become significantly more complicated. The average ecommerce return rate reached 20.4% in 2024. For holiday merchandise, around 20% to 25% of products are returned. Return requests then rise sharply immediately after Christmas and peak in the first days of January. Under the new rules, when goods are returned after release because the customer has simply changed their mind, the original import declaration can no longer be invalidated on that basis. The €3 already paid therefore remains a cost. If the product is then sent back to the UK and later sold to another EU customer, it can cross the border again and incur duty again. For retailers, the relevant calculation is therefore not only the cost of delivering a Black Friday order. It is the cost of the entire lifecycle of that order.

“A return should not be treated as something that happens after the commercial process is finished. It is part of the economics of the original sale. If a product enters the EU, travels back to the UK and is then sold into Europe again, every additional movement has a cost. At scale, the way returns are structured can have a direct impact on the profitability of a market,” says CEO of Shopreturns.

There is an alternative to automatically sending every returned item back across the border. A local EU return address allows the return leg to remain domestic. The item can be inspected, restocked and potentially resold within the single market rather than immediately making another international journey. For retailers expecting a significant January returns wave, that decision needs to be made before the wave starts.

Five questions UK retailers should answer before peak

The most useful preparation now is not necessarily a major logistics transformation. It is understanding the numbers.

Before Black Friday, UK retailers selling into the EU should be able to answer five questions:

• How many tariff lines are actually in our peak baskets?
  The cost should be calculated using the planned promotional range and bundles rather than assuming a flat €3 per order.
• Which promotions move orders across the €150 threshold?
  Discounting can change the customs treatment of a basket, so promotional pricing and customs modelling should not be treated as separate exercises.
• Is our product data ready for 1 November?
  HS codes and Product Identifiers should be checked before peak volumes arrive.
• Will customers know the full landed cost at checkout?
  Unexpected duties and carrier charges at the door create additional friction at the point where retailers can least afford it.
• What happens financially when the product comes back?
  The calculation should include the outbound duty that cannot be reclaimed following a change-of-mind return, return freight, re-import administration and the potential cost of selling the item into the EU again.

These are operational questions, but ultimately they are margin questions.

Some decisions cannot wait until November

There is still time to improve peak readiness. There is less time for structural changes. Moving inventory into the EU is not something retailers should attempt to improvise during peak. If the numbers indicate that holding stock inside the EU would produce a better long-term model, that belongs in planning for the next trading cycle. Returns are different.A local EU returns process can still be put in place before the post-Christmas wave, reducing unnecessary border crossings when return volumes rise. The broader lesson from this year’s Black Friday is therefore not simply that customs has become more expensive. It is that UK retailers need to understand cross-border profitability at order level – from the composition of the basket and the discount applied, through customs and delivery, to what happens if the product comes back.

“Europe remains an important growth market for UK ecommerce. The question is not whether retailers should sell cross-border, but whether the operating model still makes commercial sense as volumes grow. The companies that understand their cost per order, cost per return and the point at which their logistics model needs to change will be in a much stronger position than those looking only at top-line sales,” Zakielarz concludes.