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Duties and Taxes
Calculation Principles

  1. Duties and taxes at checkout are calculated based on initial product allocation to hubs

  2. For domestic shipments (within the US or Canada), Shopify calculates domestic taxes which are combined with Global-e cross-border D&T (if applicable)

  3. Duties and taxes are calculated per parcel based on parcel hub and destination country:

    • Threshold calculations are based on parcel value (not order value)

    • If final D&T exceeds the amount paid at checkout, the difference is absorbed as a merchant subsidy

  4. If a refund is issued before fulfillment is completed, the D&T will be refunded based on the D&T paid for the product at checkout.

How Shipping Cost Is Calculated
Overview

Many Shopify merchants use multiple shipping profiles or hubs. Shopify’s carrier-service API sends one request per hub, each containing only part of the cart, which leads to duplicate shipping charges, incorrect free-shipping threshold evaluations, and inconsistent promotions.

This feature introduces a consolidated shipping-cost engine.

At checkout start, a new ingestion API captures the full cart data (items, quantities, discounts, addresses).

The shipping domain computes the total cost once, caches it, and returns delta-based responses so shoppers only pay the highest cost.

The solution supports fallback to existing behaviour when data isn’t available, allows merchants to opt into split-shipping, and improves the checkout experience for mixed-hub orders, benefitting both merchants and Global-e.

Business Process

The following shows the business process:

  1. Checkout start: The client triggers a SaveShopifyCheckoutData API call (via webhooks, analytics, or UI extension) that sends the full cart context (items, quantities, discounts, addresses, locale, currency, token).

  2. Data ingestion & storage: Platform stores this snapshot in Couchbase/ValKey using the checkout token and merchant ID as keys.

  3. Carrier-service calls: Shopify calls the carrier service in parallel per hub/profile.

  4. Split-shipping option: If merchant opts for split shipping, skip consolidation and return individual hub costs.

  5. Fallback: If no cached checkout data is found (cache miss), perform the current per-hub shipping calculation (“as today”) to avoid blocking checkout.

  6. Duties & Taxes: The service reads the consolidated shipping cost from cache to compute duties and taxes consistently across hubs.

Prerequisites & Dependencies

The following list shows the prerequisites and dependencies:

  • Shopify checkout integration to trigger the ingestion API.

  • Couchbase/ValKey storage layer with an atomic “first call” claim logic.

  • MAS flag EnableCarrierServiceConsolidateCalculation to control rollout.

  • Merchant configuration to align shipping service levels across hubs.

Relevant Platforms and Shippers/Carriers

The relevant platforms include Shopify, but may be extended to other platforms in the future. The relevant shippers/carriers include Global-e shipping services, and integration with the Duties & Taxes domain.

Edge Cases and Limitations

If the ingestion API isn’t called before carrier-service calls (e.g., headless checkout or network failures), consolidation falls back to standard per-hub calculations.

Feature KPIs

The following list shows the feature KPIs:

  • Percentage reduction in duplicate shipping charges for mixed-order merchants.

  • Free-shipping thresholds evaluated at checkout level rather than per hub.

  • Consolidated shipping-cost accuracy (is greater or equal to 95% of calls return single cost).

  • Response time: 99% of consolidated shipping calls is less than 500 ms.

  • Fallback hit rate is less thsn 5%.

FAQ and Common Questions

  • Can this work with X platform?

    The initial implementation is for Shopify. Support for other platforms (GEM, Magento, SFCC, BigCommerce) may be considered after the Shopify rollout.

  • Will it impact existing customers?

    Regular (single-hub) orders will not be affected, and shipping costs are calculated as today. For mixed-order merchants, the feature consolidates costs to avoid duplicates; merchants can opt out via configuration.

  • What happens if checkout data is missing?

    If the ingestion API isn’t called or cache lookup fails, the system falls back to the existing per-hub calculation to avoid blocking checkout, and the event is logged.

  • Can merchants opt to charge shipping separately?

    Yes. Merchants can choose split-shipping mode via configuration, which disables consolidation.