I read somewhere that there’s no point in paying extra for insurance when ordering something online because the vendor is responsible for the delivery of the product as advertised. Is this true? Does it matter if they say they’re not responsible ahead of time?
That depends on:
- What venue you bought on
- What specific terms were included
- How you paid (VISA gives more protection than a check…)
However, here’s the real deal:
Damage in the mail is not insurable.
If you try to claim that your item was damaged in shipping, your insurance carrier will claim you didn’t pack adequatey.
They will usually be right, incidentally.
Anything short of 200 PSI cardboard boxes will occasionally fail in transit, and the fault lies with the sender.
Buying on Ebay? 99% of sellers with under 1000 feedback total can’t pack worth 5 cents.
Buying on Amazon? Amazon itself packs properly 99% of the time, unless you order a book. Amazon injures the dust jackets of my books about 3 times out of 4. Buying from an Amazon marketplace seller? About half of them can’t pack for squat.
Insurance covers items that are lost or stolen in transit, nothing else; while damage claims are technically eligible, short of submersion or tire tracks on the parcel, you’re losing the claim.
On edit:
In summary, all but one item out of thousands I’ve ever seen damaged in the mail/shipping system were due to poor packing. One time I saw a 3x3x3 box containing expensive electronics that was speared by a UPS forklift, but that’s about the only contrary example.
Poor packing isn’t the buyer’s fault.
Poor packing isn’t the shipper’s fault.
Poor packing must be the seller’s fault— unless you’ve got forklift marks.
Just one response? I’m wondering if I didn’t get insurance, would the vendor be responsible for damage, whether or not they told me they wouldn’t? I know contracts don’t supercede federal law. What if it was lost in transit? Obviously that’s the shipping services fault, but without insurance, either the vendor or buyer will have to eat it. Which? What should a buyer do if this happens?
It has never happened to me. I’m just wondering if it’s worth paying for insurance as a buyer in the future. I don’t want to pay for what amounts to the seller’s responsibility.
I’m not a lawyer of any stripe, but I spent several years running a shipping and receiving department for a small company, and now am involved in running several websites with e-stores which ship stuff all over the country.
There are three parties involved here: the vendor you bought the item from, the carrier the vendor used to ship the item (this is generally going to be UPS, USPS, Fed Ex, a larger freight carrier like Con-Way, Fed Ex Ground, etc.), and you.
Generally speaking, the carrier is accountable for any damage in shipping, and dealing with the carrier is the vendor’s responsibility, since the vendor hired the carrier to do the work. But keep in mind contracts can be written so that the goods transfer ownership at the vendor’s dock, and the buyer is responsible for shipping, including damage. But that is not the usual way.
However, even when the vendor is responsible for working with the carrier, in order to collect on a claim, you usually must point out damage to the driver as the package is delivered and get them to sign something, otherwise it’s a “he said, she said” situation. You say it was damaged, the delivery person says it wasn’t. Even if you do point out the damage and get the delivery person to note it and sign for it, you may still have to wait for the vendor to process the claim with the carrier. Depending on the vendor, they may ding you for the payment during this time, or even refuse to file a claim with the carrier.
If the vendor won’t pursue a damage claim with the carrier and send you a new item or otherwise compensate you for the damage, then you have to take it up with them (the vendor). This can be anything from complaining on the phone to filing a grievance with the local BBB, to going to court.
For lost items, you tell the vendor it never showed up, and it is their responsibility to get “proof of delivery” from the carrier and provide it to you. If they can’t, then it’s on the vendor, who can again make a claim with the carrier if they want.
But keep in mind “proof of delivery” is different for different kinds of delivery. If they sent you something via ordinary mail with the US Post Office, there may be no proof available, and it’s back to “he said, she said”, unless the contract specifies some kind of delivery that requires a signature. If you agree to a shipping method that does not require a signature or insurance, then you accept at least some of the responsibility for lost or damaged packages.
In my experience, most vendors (especially larger ones) will work with you and try very hard to determine what happened and get the customer taken care of. A guy running an EBay business out of his house may not even be aware of the procedures to follow, and doesn’t want to do it anyway. Not your fault, but that’s they way things are.
And to cover more specifically the subject of insurance: All carriers have default maximum values they will pay for a lost or damaged package. If the vendor does not pay for additional “declared value”, this is the most they can get if the package is lost or damaged. I believe the default amount is $100 for UPS, Fed Ex, and probably most small box carriers. For larger items it depends on the freight class, weight, and NMFC number that applies to the item being shipped.
If the package is lost or damaged, the vendor usually has to provide to the carrier an invoice or other document that shows the value of the item lost or damaged. Then the carrier will pay up to the insured amount (either the default or whatever amount was paid for) or the price of the item, whichever is less.
So if you buy an item with a value over the amount covered by the default insured value, and refuse to pay insurance for the additional value, the most compensation you will receive is going to be that default insured amount unless the vendor gives you more out of the goodness of their heart.
But what if you never got the chance to pay for extra declared value and the vendor just shipped it the cheapest way possible? In this case, the vendor is responsible, but again it may or may not be a struggle to get them to own up to it.
Generally you just don’t pay for lost or completely damaged items, and that is enough to get the vendor to take care of things. But if it comes to a dispute, the vendor may come after you in the form of collection agencies, court, or damage your credit.
RJKUgly has given you some good advice. Let me add some specifics.
It depends entirely on the vendor whether or not you can get them to take responsibility. Some eBay sellers state in their item descriptions that they aren’t responsible, unless you pay for insurance. I have seen cases where sellers just used this as a way to charge you more. But if you pay for it, and have a claim, they have to eat the loss; not you. The safest thing to do on eBay is to use Paypal. I’ve had probably half a dozen complaints over the years that Paypal got my money back on. The one exception was when what had been a big vendor of overstock CDs suddenly went kaput, and too many others had already cleaned out the pot. I was too late to get anything. Paypal’s guarantee doesn’t cover absotively, posilutely everything. If you’re buying a $5 item and want to take a chance, it’s up to you, but it’s wise to think about just how big a hit you’re willing to take if something goes wrong, and you didn’t buy insurance. But still, if the seller said in the item description they weren’t responsible if you didn’t insure, you’re SOL without it. Sellers, in any and every circumstance, have the right to spell out Terms Of Sale. If you don’t take them at their word, don’t whine if you didn’t buy insurance and something goes wrong.
Amazon takes responsibility for anything you buy direct from them, even if it’s shipped from somebody else. If you click to buy from the item description page, that means that Amazon is taking responsibility. I think they put pressure on “marketplace” vendors to make good on damaged goods, or things that never arrive. I suspect they make an issue of “making good” on stuff. The important thing is, ya gotta let the vendor and/or Amazon know, and promptly, when something doesn’t arrive, or is damaged.
Look at feedback, whether it’s Amazon or eBay, and see people complaining that they didn’t get their stuff, or something was wrong. There’s a good chance that they didn’t follow the established procedures. Or that they’re slamming the seller for no particularly good reason. Yes, some people do that, and sometimes people give lower ratings because they have unreasonable expectations. Or both. :smack:
Do pay attention to feedback, in either case. I always read the negative feedback on eBay. You can usually tell whether it’s warranted or not, at least once you get a feel for it. I will almost never buy from an eBay seller with FB lower than 98%, or Amazon marketplace with lower than 96%. Or at least, I think about it pretty hard. It seems like many Amazon marketplace buyers give lower ratings just for the heck of it; I think that stinks. That’s why I read FB when it’s something I really want, and can’t find elsewhere at a comparable price and/or quality.
Buy.com takes responsibility - I recently bought a replacement optical drive from them. They shipped it in a padded bag. It arrived with a dent in it (surprise, surprise), and they immediately sent me a prepaid shipping label to return it.
The music club I belong to is extremely good about any problems. That’s a good thing, given that the packages are so small they even fit my apartment mailbox. And if they goof and you have to send something back, they, too, provide a prepaid shipping label.
If it’s a “name” seller online (a big company), I’ve yet to have a problem. Examples? L.L. Bean, Orvis, anybody that’s been around a long time. For companies that sell exclusively online, ten years is a long time. And I would think just about any publicly traded corporation.
In general, it is an extremely wise thing to immediately examine the outside of the package of any item you buy online, or from a catalog, for evidence of damage, before you sign to accept. If there is visible damage, you either don’t accept it, or you call it to the driver’s (or mail carrier’s, if US Snail) attention. I’m not sure how you’d make a note of damage, now that you sign on the hand-held thingies rather than the paper waybills you used to have to sign, and I have some doubt whether the driver would stand there while you call the carrier or shipper, so maybe refusal is safest.
On any website, read their shipping policies. If they don’t spell them out explicitly, send them an email, asking what they do. If they don’t respond, or the answer is vague, don’t buy from them; simple as that.
So to sum it up, the vendor is responsible for damaged or missing items, assuming you can prove it, and is responsible for contacting the transport agent, unless it was otherwise stated when you bought the item. But much of the time things don’t go as they’re supposed to and customers get screwed. And when it comes down to it, it’s very difficult forcing a vendor from far away to live up to their obligations legally even if you can prove your case.
One more question: how are you supposed to prove the product is damaged if the box was not (poor packaging) or if the agent just leaves it at your door without you signing anything? Last thing I received was from USPS and they just sit it at the door, knocked, and walked off. Fedex used to hide the item under my motorcycle cover while I wasn’t home.
Vendors bear the responsibility to get the goods to YOU intact and in working order.
Insurance is to protect the SENDER not the receiver. This is why you should only order via credit card so you can dispute charges.
If something is damaged the vendor should promptly refund the money plus the cost of returning the damaged item back (if they want it back) and the vendor files the claim for insurance.
That’s what I had heard before. So does it matter if they state otherwise in their agreement when you buy? Is there a federal law that supercedes such a contract?
This is technically correct, but my experience is that the vendor gets screwed much more often than the customer, and that the vast majority of the time the packages are delivered to the customer pretty much on time and in good condition. Very often a vendor will ship a replacement or issue a refund on just the customer’s say so. At least with regards to the larger vendors, or those that have been in a business for a while and have good feedback or reputations.
This can be ugly, no doubt about it. I always request that the vendor ship such that a signature is required. This can cost a little more, and can delay delivery if no one is home, or if the driver is in a hurry and just blows off your delivery and says no one was home.
But if you did come home and find a damaged box, your best bet is to take it unopened, and as quickly as possible to the office of the carrier. They can document whatever damage is there, even if they can’t say for certain when the damage is done. Then send that documentation to your vendor when making a claim. It may help. Again, reputable vendors will make every effort to make sure you’re treated fairly.
And again, I’m no lawyer, but I’m unaware of any federal law that says the vendor has to insure the package if you don’t pay for it. My feeling is that if you refuse insurance, it’s your loss if something happens. You’re typically going to be covered up to $100 with no extra insurance, and the cost per extra $100 of value is still less than a $1. So spend an extra $5 on that $1000 item and be safe. And larger vendors will always insure so they’re covered, and just automatically include the cost in the shipping, and probably never tell you about it.
Okay, right there you just asked a question that’s very easy to answer.
In my experience, the odds of something getting lost in transit are well under 1 in 1000.
Given that Ebay sellers (I know you’re talking Ebay, since on few other venues are you ever asked to buy insurance) generally charge USPS insurance rates, you’re looking at the following cost:
Fee . . . . . . . . . . Insurance Coverage
$1.70 … $0.01 to $50
$2.15 … $50.01 to $100
$2.60 … $100.01 to $200
$4.60 … $200.01 to $300
$5.55 … $300.01 to $400
$6.50 … $400.01 to $500
$7.45 … $500.01 to $600
$7.45 plus $0.95 per $100 or fraction thereof over $600 to $5,000.
Well, if I ship $100,000 worth of $100 items (1000 units), I’m paying $2,150 in insurance.
My records show that my business loses about 1 package per 1800 units I ship [these are my actual stats for my online used bookstore].
In a given year with 1000 units shipped, I’m wasting $2150.
Over the course of two years, let’s say I have 1 package lost.
I’m spending $4300 on insurance and getting reimbursed for $100 worth of lost packages, for a net loss of $2100 per year.
Basically, insurance is a rip-off. If the vendor packs properly [that means bullet-proof], the odds of the product getting damaged are 1 in thousands.
If the vendor doesn’t pack properly, the insurance doesn’t pay.
Why do sellers on Ebay offer insurance?
In many cases, it’s a scam. They take your insurance money and just pocket it, and pay out of pocket on the legitimate claim every other year they actually get for a lost package. Some take your insurance money at the inflated USPS rates and then buy a wholesale policy such that the coverage costs you $1.70 and them 25 cents.
In quite a few other cases, they’re rank amateurs and think they’re actually selling a useful product; they’re not.
Finally, some sellers offer insurance, but only do so because some uninformed consumers believe they need it. They’re afraid consumers will buy elsewhere if insurance isn’t offerred.
Incidentally, all of my Ebay store items note something along the lines of, “No insurance needed, as we guarantee delivery.”
As an Ebay seller, I’m in the business of selling books, not stealing from and defrauding customers. As a self-respecting business operator who is not afraid to actually do his job, I’ve got no problem with the fact that I might occasionally have an unexpected loss.
Also, the term some of you’ve been looking for is “Freight on Board” for situations where liability passes from the seller to the buyer as the product leaves the loading dock.
Here’s a definition: