An interesting twist on insured sales

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Posted By: warshawlaw 

I just received a card on which I paid an optional insurance charge. It arrived in an envelope showing no insurance. Since I paid for it, I asked the seller to refund the payment for the insurance that was not purchased. Here is the seller's response:

"I insure privately due to the slowness of the post office. If the card had gotten lost I promise you would have thanked me for this. When a person pays the $1.10 I make a note in my database and leave it at that. I charge the same as the post office and I guarantee my service is faster & better then theirs. If after reading this note you are still unhappy and
want a refund just let me know. Thanks for your understanding"

The main problem I see with this is that when you insure, you have a receipt from the post office that proves you insured and shipped the item. What is to prevent me from claiming I never got the card and demanding that he make good on the insurance claim? Then what? Do any of you really believe a seller would pay off "private insurance"? I sure don't.

This seller, BTW, is a "power seller" with a feedback over 1,000.

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Posted By: MW

...but the seller should provide a link to documentation outlining his private guarantee. Absent that, I think you're right -- it's unenforceable and relatively useless.

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Posted By: runscott

...as long as he describes it in his listing. This, of course, would bring the weasels out of the woodwork.

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Posted By: RobertS

I believe this outfit offers coverage for collections, extending to losses involved with the sale of items on online auctions.

They offer dealer insurance and collector insurance, with the collector insurance including coverage when a collector sells an unwanted item or double on the likes of eBay.

Or so their literature says...

I am not affiliated with them or any other insurance agency, I just picked up a leaflet at a paper show last month and talked briefly with one of their salespeople at their table.

Robert S.
(not to be confused with the other Robert out there )

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Posted By: David

2 brief points.

I agree with Adam that the actual insurance part is only part of it. The receipt, tracking or physical signing is an essential part of the transaction.

I'm no lawyer (and Adam is, so perhaps he can answer this), but aren't there strict laws surrounding insurance agencies? It would seem to me that it might not be legal for Joe Blow to start insuring his own items. God help us if anyone can start an insurance agency from his or her basement ('AAA grading, a division of AAA Inusurance. If you have a complaint, simply stop by our convenient location in Honalulu.').

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Posted By: Tom

I don't really see a problem with his system as long, as others have stated, it is outlined somewhere in writing where you have some recourse if your shipment is lost or damaged. Many people insure items outside of the normal post office or UPS/Fedex insurance rates with the insurance company they may have insurance on their stock with. When I shipped a large lot of goods to a large auction house, I used UPS and the auction house paid for the insurance via a separate rider which I was faxed a copy prior to shipment.

SHAMELESS PLUG........and I know some people aren't gung ho on UPS but by the time you pay priority mail and insure for $100, you're paying more than what UPS or even Fedex ground would charge on a one-two pound package 3-4 zones out. Postal insurance is very steep at basically $1.00 per $100 coverage after the first $2.00 for $100 total. UPS (and Fedex ground, I believe) insure every package for the first $100. Also don't confuse the new 'pay for tracking' service the post office has with any type of insurance.

Collecting on claims..........had a couple of items broken by the post office and it was VERY slow to collect. If the amount is under $100, it is generally a little quicker. Unfortunately, insurance is a necessary evil, the way I see it. I just don't trust anyone (including UPS, who I work for) when it comes to large $$ items. I want insurance on items going postal (no guns) in the $50 and up range generally.

Also.........be sure to carefully understand WHAT can or cannot be insured for full value. Collectibles and one of a kind items are very questionable under some circumstances.

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Posted By: Lee Behrens

I personally have started putting delivery confirmation on all my auctions for two reasons: this way the package is tracked and proof that I have shipped.
I still offer insurance as an option but the few times I have had problems it sounded like the paperwork was such a hassle that it wasn't always worth the time and effort.

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Posted By: petecld

Lee,

We take the exact same view but on opposite mailing features. To me, delivery confirmation is the waste of paper work. As a seller, delivery confirmation does cover YOUR butt, but your buyer is still out his money/card if the package is lost or ruined. To me it makes more sense to put money into an option where EVERYONE is covered.

I really don't need to see each stopping point in the route telling where the package is. All I want is the package delivered and undamaged. If the package is damaged or lost and a $200 card is gone/ruined the delivery confirmation doesn't get you your $200 back if you are the buyer. Insurance does.

Plus, everytime you insure something you do have the insurance receipt so that, to me, is proof of mailing as well.

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Posted By: runscott

Obviously, if you wanted to get the most for your money, for various shipping/insurance alternatives, you would use some combination of services and providers, but this is too time-consuming for most people. I ship USPS 1st class (insurance optional), priority mail if over a certain weight, and registered if over a certain weight and dollar amount (registered vs priority is tricky because of the weird insurance tables).

Personally, I hate it when someone ships to me with "delivery confirmation" - if I'm not home, I have to then drive 30 minutes to pick up the package. Sounds weird, but I have a post office 5 minutes away; however, if I'm not home mail gets taken to a post office 30 minutes away!

Tom's points about UPS made me do some thinking about shipping high-dollar items, also - I like the fact that UPS tracks every stopping point along the route, whereas I only get "delivered" when I ship registered.

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Posted By: jay behrens

Delivery Confirmation is a great 'cover your ass' for items that are not insured. It is essentially a piece of insurance to prove that you mailed said item if the buyer claims that he has not gotten the item. If he didn't. I state clearly in all my auctions, anything shipped without insurance is at the sole risk of the buyer. The delivery confirmation is their for my piece of mind that they actually got item.

Jay

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Posted By: warshawlaw

A person certainly can guarantee receipt or your money back. A person also can purchase private insurance on an item that covers business inventory lost in transit to a customer. Neither of these things happened. The seller did not tell me that he was pocketing my $1.10 and therefore guaranteeing my receipt of the item; if he had, my response would have been to refuse the "insurance" because I have no idea if he will pay off if the thing is lost (I have no idea if he will even ship it, for that matter). Insurance is supposed to be a third party thing. It also forces the seller to get a receipt proving the item was shipped out. Now, if the seller is passing on a business protection he has to me, that raises a number of issues, not the least of which is how he calculated the rate he was charging me. The item was modestly priced, so that the insurance charged was nearly 10% of the purchase price, which I signed on for only because I am close to finishing the particular set involved and I needed this common badly and wanted to make sure that the card was shipped.

I feel like I got jacked on this deal because I was charged a fee that was just about the same as the post office fee, there was no indicating that this "insurance" was not the post office standard insurance, and based on the statement that the seller simply made note of the insurance in his ledger, I am under the distinct impression that this seller simply pocketed the insurance money with the plan that if he gets caught with an undelivered item, he will refund the money. Of course, this offers no protection for the buyer unless the buyer has recourse through a payment mechanism (e.g., a Paypal complaint to screw up his account and force proof of shipment with insurance). Otherwise, there is nothing to force the seller to live up to the "insurance" and refund the payment. About all that will result in is a trade of negative feedback (and we all know how effective those are). In the meantime, the seller makes a tidy little profit on the bogus "insurance", doesn't he?

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Posted By: petecld

That was another question I had. Does insurance cover an item after it has been mailed?

Honestly, sounds like you got taken for the money.

EVERY insurance company needs some kind of evidence of loss or damage don't they? It seems like a low dollar amount was involved here but would an insurance company do the same with a $1,000+ card. I would think they would want some evidence of shipping or loss.

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Posted By: bruce moreland

What this guy means by "insuring privately" is that he simply keeps your money.

If you report a problem with the card, or if you tell him it has gone lost, perhaps it reacts differently than if you don't pay him the extra money.

From the buyer's point of view, a seller who ships an item that becomes lost in the mail, and then will not make good on it, is identical to a seller who keeps the buyer's money and ships nothing. There is absolutely no way that a buyer can tell the difference between these two cases.

If a seller is willing to risk having a buyer think he is a thief, I expect that he doesn't really care if someone thinks he is a thief. If I've learned that about a seller, I also assume that the seller also doesn't care if someone thinks that he over-grades. I bid much less on "not responsible for lost packages" raw card auctions.

If you pay the $1.10, you should get postal insurance, not a promise not to be a jerk if something goes bad. So I don't think that this is "okay".

bruce

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Posted By: kyle lentine

I was sending in some cards so SGC to be graded and wanted them to be sent next day and insured for $5,000.
The woman at the counter said "next day comes with $500 insurance and if you dont mind me asking, What are you shipping?"
I told her they were baseball cards and were very valuable. She then told me that if the cards were lost the post office would NOT pay the insurance on these items. If the were damaged they might, but there may be a problem. She said she works with postal insurance claims daily and that paper type items and documets would be paid to be reprinted but not necessarily the value to replace them. I would have to produce a receipt of PUCHASE on the items (especially if they were lost) not just the book value of them and actually prove what I had paid on them. She told me when that much insurance is involved how does the post office know the items were acutally in the package, or the actual condition of the items being sent?
She said I could spend the money for that much insurance but she would almost guarantee if the package was LOST they would not pay on a $5000 dollar claim. She said she know this from experience to be true!!
So basically they will take your money on a high dollar item but may or may not make good on the insurance