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The Money Desk · Blog
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5 Ways to Handle Being Out of Stock

Confirm what is available, communicate realistic timing, offer customers clear options, and improve your records and reorder process to prevent repeat stockouts.
From TheFinanceBase Team4 min to read
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When a product is out of stock, first confirm what is actually available, then tell the customer what you know and offer clear options. If you accept an order for future delivery, do so only when you have a credible fulfillment plan. After resolving the immediate issue, use it to improve your stock records and reorder timing.

1. Verify the stock position before replying

Check the inventory record against a physical count before telling a customer an item is unavailable. Look in other storage areas and fulfillment locations, and separate units that are damaged, expired, returned, or otherwise unsellable from inventory that can actually be shipped. A record can show stock that is not usable—or miss stock that is on hand.

Regular stocktakes help identify discrepancies and make the inventory record more dependable. The Australian government’s inventory guidance recommends keeping stock records and checking them against physical counts.

2. Give a timely, honest availability update

Tell the customer whether the item is temporarily unavailable, whether you expect more stock, and the estimated timing only if that estimate is dependable. If you do not have a reliable replenishment date, say so rather than presenting a supplier’s unconfirmed estimate as a firm shipping promise. Update the customer if the situation changes.

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Some ecommerce platforms allow a merchant to accept purchases when tracked inventory is zero or below. Shopify documents this as a setting that can support cases such as preorders or incoming stock, but enabling it does not confirm when an order can ship. See Shopify’s guidance on selling out-of-stock products.

3. Offer a real choice: wait, substitute, or cancel

Give the customer control where your policies and fulfillment capabilities allow it. The right option depends on how urgent the purchase is, how unique the product is, how well a substitute meets the need, and how certain replenishment is.

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Wait for the original item The customer prefers that product and can tolerate the estimated wait. Whether there is a reliable availability estimate, how you will communicate changes, and the customer’s cancellation options under your policy.
Choose a substitute Another product meets the same need and the customer is willing to consider it. Meaningful differences in features, size, compatibility, price, or other relevant terms.
Cancel The customer cannot wait or no suitable alternative is available. How cancellation and any refund will be handled under your stated policy and applicable requirements.

Do not treat a substitute as equivalent if it is materially different, and do not steer a customer into an option without explaining the trade-offs. The appropriate response is case-specific; the cited guidance does not establish a universal best option or quantify how these choices affect sales or retention.

4. Take a backorder or preorder only with a credible fulfillment plan

A backorder is an order for an item expected to be fulfilled later. Shopify distinguishes it from an out-of-stock product that may not return; if you take a backorder, explain the expected timing and what you will do if it slips. Do not describe supply as certain when the supplier or delivery date is uncertain.

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Allowing customers to buy at zero inventory is a platform setting, not proof that a specific order has a confirmed ship date. Check your store’s current settings and explain the arrangement before accepting payment. Requirements for preorder disclosures, payment timing, cancellations, refunds, and consumer rights vary by jurisdiction; the general guidance here does not determine the rules for every market.

For background, see Shopify’s explanation of backorders and the Shopify Help Center documentation on selling when inventory is out of stock.

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5. Reduce the chance of another stockout

Keep one dependable stock record

Use one primary method to record stock movements, sales, and returns, and keep it current. A carefully maintained spreadsheet or other simple system may be enough for a small assortment; the important thing is consistent updates rather than adopting a more complex tool by default. Sell on Amazon’s small-business inventory guidance discusses choosing and maintaining a tracking method.

Set a reorder point based on demand and lead time

A reorder point is the stock level that triggers replenishment. A practical starting point is the quantity likely to sell during the supplier’s delivery lead time. Then consider seasonal demand, supplier reliability, and whether a buffer is appropriate for your business.

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The Australian government illustrates the calculation with 10 chairs sold per week and a two-week delivery time: demand during lead time is 20 chairs, so 20 is the example reorder point before any additional buffer. This is an illustration, not a general benchmark for other products or businesses. See Manage your inventory.

Use counts and tools that match your workflow

Repeat physical counts and investigate differences rather than simply overwriting the record. Counts can uncover missing, damaged, expired, or unsellable units. Barcode scanning is optional: it may help when the number of products or stock movements makes manual entry difficult, while a simple manual process can work for a small range. GS1 US explains how barcodes can support tracking across online and in-store sales in its small-business inventory management guide. If you are considering a barcode scanner for inventory, choose one that fits your existing workflow; no particular device is established as necessary by that guidance.

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Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.

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