DDP or DDU for Canada Orders: A Decision Guide for Shopify Brands
Sending an order to Canada forces one decision that domestic shipping never does: who pays the duties and taxes, and when. Get it wrong and the customer meets a bill at the door, refuses the package, and you pay for the round trip.
The two options in plain terms
With DDP, or Delivered Duty Paid, duties and import taxes are calculated and collected at checkout. You, as the seller, are responsible for remitting them, and the customer pays nothing at delivery.
With DDU, also called DAP or Delivered at Place, the customer pays duties and taxes when the package arrives. The carrier or customs collects it at the door.
Shopify's Winter 2026 release expanded DDP and DDU label options for the US and Canada, so the choice is easier to apply at label purchase than it used to be. Check Shopify's current help documentation for how your carrier and destination are handled, because requirements vary by carrier.
What goes wrong with DDU
The core issue is surprise. A customer who saw a total at checkout and then receives a duty bill at delivery often refuses the package. Guides on cross-border shipping consistently list refused deliveries and abandoned parcels as the main DDU failure.
A refused package costs more than a lost sale. You pay the outbound label, the return leg or disposal, and the product is stuck in transit for weeks.
What goes wrong with DDP
DDP moves the cost and the paperwork to you. You need accurate duty estimates at checkout, or you will under-collect and absorb the difference. A wrong product classification can make the estimate wrong on every order of that item.
It can also lift the checkout total, which may cost you conversion for price-sensitive buyers who compare against Canadian sellers.
The decision matrix
| Your situation | Lean toward |
|---|---|
| High average order value, strong margin | DDP |
| Low average order value, thin margin | DDP with duties passed to the customer at checkout |
| Repeat Canadian customers, known products | DDP |
| Occasional Canadian orders, no classification data | DDU with clear checkout messaging, or pause Canada |
| Products with high duty rates | DDP, only after verifying classification |
The numbers to run
- Pull the last 12 months of Canada-bound orders and the share that were refused or returned to sender.
- Multiply refusals by the cost of a refused delivery: outbound label, return leg and product value at risk.
- Estimate the duty and tax amount on a typical order.
- Compare the average refusal loss per order with the average duty amount. If refusals cost more than the duties, DDP pays for itself even if you absorb part of the duties.
Make the choice visible to the customer
Whichever option you pick, say it on the product page, at checkout and in the shipping confirmation. "Duties and taxes are included at checkout" and "Duties are collected at delivery" are both acceptable statements. Silence is the version that creates refusals.
Also check carrier rules before you decide, since some services require duties to be prepaid for cross-border labels.
Review it twice a year
Duty rates and trade rules change, and your product mix does too. Put a recurring review on the calendar, and recheck the choice before peak season when cross-border volume rises.
Look at ShipAid Shipping Rates for direct carrier accounts with no volume commitments, so the shipping cost you build into a DDP quote starts from a lower base.
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