Butterflies. That feeling is familiar to all of us. It’s that swirly, gooey and fluttery feeling in our stomachs that signals something is coming. It could be a first date or an interview for a dream position. Maybe it’s Christmas morning, and we ran and leapt our way to the Christmas tree as little children.
Pits. It’s a familiar feeling. It’s a pit in your stomach that is heavy, heavy, lethargic, and drags you down when we wait anxiously for it to happen. It could be a first date, a job interview, or Christmas morning. We, as small children, run and jump to get to the Christmas tree, but there are no gifts.
This may have been something we didn’t experience as children, but it’s just a matter time. As children, our parents probably shopped in malls, mom and pop shops, and department stores. Everyone is now shopping online for holiday shopping. It is easy to get holiday delivery right at our door. The postal service is a true professional in providing us with white glove service as we celebrate the holidays, and welcome the new year.
Ecommerce businesses are hard at work all year to build relationships with customers, offer promotions and land sales. All this leads up to the big event — holiday shopping. If the package does not arrive within the timeframe expected, it can ruin the whole experience. Consumers are often stressed out this time of the year if their package does not arrive within the expected time. Brands also need to be happy.
Shipping Insurance: What does it mean?
Shipping doesn’t always go accordingly. Sometimes packages are lost, stolen, or damaged during shipping, which can ruin our holiday cheer. Tiny Tim wouldn’t be as full of holiday cheer if he didn’t receive his new smartphone from the post office on time. Parents who panic are either left with no choice but to watch their children go without gifts or to pay next-day air shipping rates in order to receive the package faster. Carriers can’t be trusted and both shoppers and merchants can suffer.
Shipping insurance, which is offered to consumers and producers, protects them in the event that a package doesn’t arrive at its destination because it was lost, stolen, or damaged. If the parcel is insured, it will be refunded to the owner of the insurance.
It is important to know the declared value. The declared value is determined by the total value of the goods contained in the package. If you ship or receive $75 worth of merchandise, and it is lost, the insured holder will be reimbursed. Buyers are likely to be reimbursed through a refund or a free reorder. Sender will be reimbursed if they send the goods back.
Some packages may not be covered depending on which carrier they are being shipped. All domestic shipping carriers FedEx or UPS offer free insurance for packages up to $100 in value. Below is a list of the included insurance values for all three major domestic carriers in the United States.
|Carrier||Service||Inclusions insurance package value|
|UPS||All||Get up to $100|
|FedEx||All||Get up to $100|
|USPS||Priority Mail (domestic).||Maximum $100 (CPP), and maximum $50 (CBP).|
|Priority Mail Express (domestic) and Priority Mail International (international).||As high as $200|
|First Class Mail (domestic, international, Media Mail, Parcel Select)||Other items not included|
There are certain packages that are not covered by insurance. Commonly, uninsurable items include currency and financial instruments, precious stones, and high-value goods that might have a lower coverage limit (e.g., flat-screen televisions can only be insured up to $1,000).
Many shippers have a maximum value that senders can declare. UPS supports declarations up to $50,000 with a UPS account number. Packages eligible for the Enhanced Maximum can have a declared worth of up to $70,000.
It is vital to provide insurance for your customers during the holiday season. This will help you retain your customers and increase your profits.
Shipping Insurance Policies for Buyers and Senders: Differences
Shipping insurance can be divided into two types: seller and buyer. The main difference is that buyer shipping insurance funds are paid by the consumer, while seller shipping insurance is senter-funded. Each process is different.
Buyer Shipping Insurance: This buyer insurance is consumer-funded. At checkout, buyers have the option to add shipping insurance to their cart and charge to their credit cards. To protect your purchase against lost, damaged or stolen parcels, the cost of shipping insurance is usually around 1.5% of the total cart value.
Merchants have two options to offer shipping insurance to buyers: opt-in or opt-out. There is no default setting between them. Consumers can check the box to opt in insurance. The default setting is no insurance. Buyers can choose to decline insurance and add insurance to their package.
Group 6 Boutique’s shipping policies page shows an example of opt-in buyer insurance. Priority Mail is available for orders less than $50. However, customers can choose to purchase shipping insurance if they are more expensive.
Solo Stove is an example of an opt-out buyer shipping policy. Shipping insurance is included in the Solo Stove order. Consumers have the ability to opt out.
The Kitchn is another example of an opt in shipping insurance option. As you can see, they also offer shipping insurance.
Seller Shipping Insurance: All packages that are sent to the buyer will be covered by seller shipping insurance. It’s becoming more common to have sender shipping insurance. This is because it is now expected that the seller will be responsible for the package until it reaches the buyer. (And more importantly, the package must be delivered to the buyer and not stolen from their front porch.
Some sellers may try to shift responsibility to their fulfillment partner. This can be frustrating for customers who have a direct relationship with the brand. The problem is that there is usually a waiting period between the brand and the consumer to ensure the package arrives on time. This is not a good idea for consumers.
Shipping insurance must be offered by a provider like Lloyds, Shipsurance or InsureShip in order to be valid. A shipping insurance that isn’t backed by an insurer can lead to a brand either charging the consumer more or assuming the entire cost of the shipment.
Why you need shipping insurance for your brand
It seems great that brands could pass the insurance cost on to customers. It is not always in the consumer’s best interest to add these upcharges. It is likely that it makes more sense for insurance sellers to cover the cost of insurance in an increasingly digital world. This is especially true during the coronavirus. Although it might seem expensive, the benefits will be much greater. These are the top four reasons it is in a brand’s best interests to pay for insurance.
1. Reduce the risk of theft, loss, and damage.
Shipping insurance is beneficial for businesses in many ways. The seller usually pays for shipping costs if a product is lost, stolen or damaged. The seller will have to pay for all shipping and handling costs in order to send another product to the customer. In these cases, insurance will reimburse the cost of the package. The seller can keep their customers happy while protecting their bottom line.
2. You can protect your brand image for a lower price
An unhappy customer will leave your store, whether it is a lost, stolen, damaged or stolen package. This will lead to angry customers and poor word-of-mouth. To keep customers satisfied, i investing in their experience will help to protect your brand’s reputation. You can think of it like this: Sellers have to choose between paying the full cost of the product or insurance. This will keep your customers satisfied and protect your brand’s reputation. The Loco Mama is a great example of how a brand can protect their brand image. They focus on toys for kids and must maintain a friendly, approachable, and approachable image. They offer shipping insurance to keep their friendliness intact.
3. Increase your revenue.
Positive customer experiences will increase brand loyalty and bring back customers. Customers will return to you by providing a great customer experience at every touchpoint including product delivery. Shipping insurance is relatively inexpensive and will provide protection for customers after they purchase. It also likely creates increased revenue through customer lifetime value and positive word of mouth marketing.
4. You will feel at ease and have peace of mind.
Many insurance companies now offer simplified claims filing procedures. Some even allow you to file one-click claims. Customers no longer need to complete lengthy insurance claims forms or wait for approvals. This makes the experience even better. This gives consumers and brands security — packages will arrive on time and brands’ bottom lines are protected.
Shipping insurance costs
Shipping insurance costs are important. Every carrier has different shipping options and prices for insuring your packages. The table below shows a breakdown of the available carrier options.
|Get up to $50.00||$1.65|
|From $50.01 up to $100.00||$2.05|
|From $100.01 to 200.00||$2.45|
|From $200.01 to 300||$4.60|
|Get up to $100.00||$0.00|
|From $100.01 up to $300.00||$3.00|
|Each $100.00 additional value is worth $300.00||$1.00|
|Get up to $100.00||$0.00|
|Each $100.00 additional value is worth $100.00||$1.05|
|Get up to $100.00||$0.00|
|Each $100.00 additional value is worth $100.00||$1.05|
|Minimum of $300.00||$3.15|
Carrier insurance comes with big caveats
Carriers that offer insurance are a bit like your mom inviting your brother to your birthday party. Although you didn’t intend to invite him you knew that he would be upset and your mom would be mad. You reluctantly agreed to it. As long as he kept quiet and did what you asked, everything was fine.
The charts may give the impression that carrier insurance is fine. These are household names that are synonymous with quality delivery and low prices. Although carriers may offer insurance, they don’t have the best track record in reimbursing customers for any problems.
First, every carrier has a long list reasons why they won’t honor a claim. This includes events such as:
- AKA theft, loss or damage that occurs after delivery
- Insufficient packaging caused goods to be scraped and damaged
- It is impossible to find the proper insurance documents
- Perishable goods can spoil by the time they are delivered
- The acceptable time limit was exceeded when the claim was filed
A second thing to remember is that insurance companies aren’t always in a hurry to pay out claims. Customers who are relying on carriers to ship their insurance can expect to wait a few weeks for reimbursement , if they have accepted their claim.
The experience was not pleasant. There are different time limits for filing a claim depending on the carrier, package type and whether the shipment was international. Customers can rely on the brand to act as a middleman between them, their reimbursement and claims being accepted by carriers that only accept claims from shippers. Filing a claim through each carrier can be a hassle. There are many steps involved, including document and evidence gathering, complicated form fields, and understanding the appeals process in case the original claim is not sufficient for reimbursement.
Your customers will be robbed of their insurance premiums and any feeling of being treated well by your store.
What are the risks if I don’t use shipping insurance?
Shipping insurance is a risky option that could affect the fulfillment of your order. Not all risks are created equal. These two factors will help sellers decide whether shipping insurance is necessary. These factors will allow brands to be more cost-effective in determining the risk level they need to mitigate.
1. Types of items
The type of product will determine the risk of a failed delivery service. Certain categories are more susceptible to being stolen than others. Items that are designed by brands are more likely be resold, pawned or sold, while smaller and lighter packages are examples of items most likely to get stolen. Porch pirates are attracted to packaging and return labels bearing brand names. Avoid exterior boxes that display a flashy brand or shipping labels that clearly indicate what’s inside.
2. 2. Destination.
The delivery location will also affect the risk of a failed delivery. Certain areas are more difficult to deliver to. You may have guessed that high-populated urban areas are the most vulnerable to package theft. However, rural and suburban areas are not immune. Porch pirates are known to follow delivery trucks and steal packages as soon as they drop at their doors. Although signing signatures or tracking requirements can reduce this risk, many carriers have strict coverage limits. International shipping is best practice. Customs adds an additional risk.
The time of year an order is placed affects the risk of a failed delivery to your home. The most exciting season of the year is also when the highest number of packages are stolen. Package theft increases with the increase in online shopping. Package theft is more common during the holiday shopping season than at other times of the year.
We are nearing the holidays. Have you seen Christmas decorations in stores? Brands must be prepared quickly for holiday shopping season. Brands must provide positive customer experiences throughout the customer journey in order to win customer loyalty, and surpass their competitors this holiday season.
It is important to offer customers easy and generous policies for loss, theft, and damage. This will help create positive customer experiences. Brands can find this experience costly, so shipping insurance can provide great protection and help them to take full responsibility for their products until they reach customers.
You have the choice of offering the butterflies or the pit in customers’ stomachs. The brand has won once a product has been purchased. But the journey is just beginning. Your customers shouldn’t feel anxious about whether they will get their package. Instead, give your customers butterflies while they wait for the exciting product to arrive. Then give it to your smiling child.