Why USPS International Shipping Insurance, Indemnity Coverage and Signature Confirmation is Useless

Every online seller knows that shipping insurance, proof of shipment and delivery are must-haves when sending high value shipments. These are important tools for fighting unjust payment disputes and credit card chargebacks, especially when using PayPal which offers Seller Protection when certain shipping requirements are met.

The problem with this is that what one party requires, another party cannot provide. In this case, I speak of PayPal and USPS.

No Signature Confirmation on International Shipments

PayPal Seller Protection requires signature confirmation on shipments valued over $250. The problem is USPS, the only realistically affordable way to ship internationally, is not able to provide signature confirmation on Priority Mail or Express Mail International. If you have a small enough package that can be sent First Class Mail International, you can send it Registered, but for many sellers, this is not a practical option as it requires going into the the Post Office to mail.

I shipped a large order valued at $400 to an overseas customer 2 weeks ago using Express Mail International. I asked the clerk at the Post Office to confirm that I would have access to signature confirmation on this shipment and he assured me that I would. A week later, the package was delivered according to USPS online tracking. However, there was no information on who signed for the package. Next to the delivery information was a link to obtain proof of delivery. These are documents the USPS will email, fax or mail to you with a scanned copy of the recipient’s signature. I filled out the request to have the proof of delivery emailed to me. One week later, I received the following document from USPS:

In response to your request dated 09/20/2011, we regret to inform you that we were unable to locate any delivery information in our records regarding your item EC######### US.

This is highly disturbing considering their website clearly shows the delivery progress, date and time. The fact that they cannot even “find” that information to include in my Proof of Delivery document is incomprehensible.

Unfortunately, this is not my first problem with international delivery confirmation.

No Shipping Insurance/Indemnity Coverage Against Rifling/Theft

When you purchase international postage online, it comes with a certain amount of indemnity coverage against rifling, theft, loss, etc. You also have the option to purchase additional insurance.

Last year, I shipped an order using Express Mail International which includes $100 shipping insurance. As with the previous case, online tracking showed delivery information. However, my customer reported that the item didn’t arrive whole: it was missing a piece that was definitely firmly attached when I packed the shipment. It had not broken off in transit but was neatly and completely removed from the item and package. It is entirely possible the customer was just trying to get us to send her a free replacement item, but it was also possible that a customs worker had opened the package and removed a part of the piece.

I filed a claim with USPS to cover the losses resulting from this damage/theft. A week later, I received a call (voicemail) from USPS informing me that they had “investigated” this claim and learned from the Polish Postal Service that the package had been delivered undamaged making it eligible for insurance reimbursement. A week after that, they sent me the same letter I quoted above, that they had no record of delivery regarding that package.

Conclusion

For my business size and order volume, UPS and FedEx are exorbitant and out of the question for international shipments, so the search continues for the perfect solution to my international shipping concerns.

While I have had relatively few problems with overseas shipments since they only comprise 5% of my orders, my shipments are high value and the result of hours or days of work, so I want to make sure I am fully protected.

But in the mean time, a few tips regarding shipping overseas:

  • Carefully select the shipping method — Choose one that is fast, reliable and offers at least some form of delivery confirmation. Avoid Small Flat Rate Boxes unless you are willing to risk loss of small shipments or customer fraud.
  • Do not count on USPS shipping insurance or indemnity coverage to come to your aid in the event of loss, theft, rifling.
  • For very high value shipments, consider a 3rd party insurer, which I will soon be looking into.
  • Make sure you save all proof of mailing/shipment — easier to do with electronic postage which provides receipts via email.
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About Grumble Bee

Partner in a home-based online family business, Grumble Bee's duties include but are not limited to: customer service, order processing, shipping, website design and maintenance, purchasing, accounting and assisting in production.
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