Opinions Wanted on "Self Insuring"

[gmarguli]

When selling on eBay I frequently have people purchase insurance for low value items ($20 or less). I charge the exact price that the Post Office charges, which is $1.30 for $50 and less.

 

I have been considering self insuring these packages. Basically not purchasing the insurance from the post office and I would pay off should the item get lost or damaged.

 

Another possibility is purchasing Delivery Confirmation for $.55 instead of the insurance. That way I'd know the package arrived and the buyer couldn't lie about it trying to get me to cough up the money.

 

Any thoughts on this?

[TomB]

Whenever I receive something that is sent Delivery Confirmation all that is confirmed is that the package was stuffed in my mailbox or left on the ground next to my driveway. It does not confirm that you actually received the item, only that it was left at your mailing address. In my opinion, this is a ripoff by the Post Office.

 

Also, whenever I see someone states that they are self-insured, I always get the feeling that they are just looking for another angle to get a few more bucks.

[spy88]

I personally have had 2 items lost in the mail, all coming to me from sellers on eBay. In one case, I did not get insurance for the items but the seller said he will make good on replacements when we get together here in Vegas over Superbowl weekend. In the second, I had insurance on the item (a 1972-S PCGS PR69DC---pd $358.). The item went to the wrong address where the sender lives, then to the wrong PO where I live, from there to the major hub in LA, where nothing but a torn up and empty package was reported to the seller. After many phone calls to the local POs here in Vegas, I was given the number for the lost and found dept at the central distibution PO in Vegas. Gave them a call and lo-and-behold!, there it was, waiting for someone to claim. Had it sent back to the seller as he had already refunded my money.

 

The point? If it is going to get lost, it is going to get lost. Nothing you or the PO can do to protect this from happening. All you CAN do is limit your liability and responsibility and send it the most secure way available---and we all know even this is sometimes not enough.

 

One thing I would like to pass along to all the dealers out there---you can help eliminate theft by PO employees by NOT using your business name in your return address, ESPECIALLY if it has "Coin", "Gold", "Silver", "Rare", etc.---

any word referring to numismatic content. Sometimes, these key words along with a healthy insurance coverage, is an open invitation to less-then-honest postal workers. Where there is a will, there is a way, and most of them know a way.

 

When I buy from a dealer, I always request this as a personal favor and they are more then happy to comply.

 

David

[Beijim]

One thing I would like to pass along to all the dealers out there---you can help eliminate theft by PO employees by NOT using your business name in your return address, ESPECIALLY if it has "Coin", "Gold", "Silver", "Rare", etc.---

any word referring to numismatic content.

 

I couldn't agree more with this. Writing or pasting anything on the outside of a numismatic package sent for delivery through a common carrier is like painting a target on yourself rather than forcing the enemy to do it . In short, it's an epsilon minus semi-insufficiently_thoughtful_person act ($5.00 to Aldous Huxley) and not worthy of the vast majority of participants in THIS forum.

 

Although I do appreciate that it's a 100 I.Q. world by definition.

 

Beijim

 

[EZ_E]

Greg,

 

You can get signature confirmation on a certified or registered package. It is a green card stuck onto the envelope. When delivered, the receiver must sign the card and it is mailed back to you.

 

Of course, theft does happen at the post office but it is highly discouraged. A postal worker can get away with almost anything as a gov't employee except for stealing or fighting. This makes me think that theft isn't much of a problem in the US. Probably the greatest problem with postal workers is apathy. The mail in third world countries are atrocious, however. If it isn't sent registered or the like then the letter definitely will not make it to its destination.

[braddick]

The problem is eBay'ers will assume you're ripping them on the postage if you charge and then "self insure". I've thought of doing the same thing but in the end it's probably best to just continue insuring EVERYTHING.

 

It keeps the Opportunists at bay.

[darktone]

Just don't offer insurance under a certain amount. I won't insure under $20 for anyone it's just not worth a trip to the post office. mike

[CarlWohlforth]

I'd rather pay for $100 of insurance than for signature confirmation. That way I get both insurance and proof the package was received. I didn't think signatures are required if you get the (green form) $50 insurance, only for the over $50 (blue form) insurance.

 

I self insure for the last $50. I really do earmark some of the shipping fee I charge for insurance. I've shipped close to 1,000 packages and have had very few issues arise.

 

If the coin costs $225 I buy insurance for $200. If the coin is less than $50 I don't get USPS insurance. In every case I set aside about 50 cents per package. I now have a few hundred dollars to spend on refunds in case a package does get totally lost or destroyed.

[truthteller]

Greg,

 

The opportunity for fraud for the end user in your transaction escalates when the package is not insured. Think of this, when the buyer recieves his package, with no insurance stamp on it, he/she might get a bit greedy and claim they never got the package, even with delivery confirmation, which merely tracks the package from PO to PO. With an insured stamp on the package, the buyer is less likely to claim they never received the package, since they must fill out a federally sworn document alluding to the fact they never received the merchandise and wait many weeks to be reimbursed.

 

 

 

TRUTH

[braddick]

Greg,

 

The opportunity for fraud for the end user in your transaction escalates when the package is not insured. Think of this, when the buyer recieves his package, with no insurance stamp on it, he/she might get a bit greedy and claim they never got the package, even with delivery confirmation, which merely tracks the package from PO to PO. With an insured stamp on the package, the buyer is less likely to claim they never received the package, since they must fill out a federally sworn document alluding to the fact they never received the merchandise and wait many weeks to be reimbursed.

 

 

 

TRUTH

Agreed.

I've NEVER lost an Insured package but somehow have "lost" two that were not insured. Go figure.

[jtryka]

Here is the way I approach it. On low value items I make the insurance optional, if they pay the $1.30 I insure it at the PO, since it really irks me when I don't get something I pay for (like an uninsured package when I paid for insurance). On other items I may put one fee to cover both and on occasion I sefl insure and if those parcels are lost or damaged (never happened yet) I would then send a PO claim form for them to fill out, since in the case of someone trying to perpetrate fraud on my self insured package, signing a claim form will at least cause them to think twice. If they return the form and any damaged goods, then I will refund them from my own pocket.

[sanmary]

Good call, in this day and age you HAVE to cover your @ss. I do the same. I've never had a person "not receive" their package. I've sold I suppose about 300 different lots and not a single problem. I have however encountered a couple on the receiving end.

[Higashiyama]

Ignoring the value of your time, and the customer not appreciating your self-insurance, whether this makes sense really ties back to Truth's comment on moral hazard.

 

If the items you are shipping cost less than $ 20, and insurance costs $ 1.30, and there was no moral hazard, the post office would need to lose more 6.5 % of all packages for you to lose money on the venture. Clearly, the post office has a better record than this. Presumably the post offices loses less than 1 %? So, the moral hazard is the big unknown.

 

Greg -- why don't you go ahead and self insure - it would be interesting to monitor the experience!

[gmarguli]

I appreciate everyone’s thoughts. I have been considering doing this for quite some time. I’m not worried at all about having to pay out some claims and I’m also not considering doing it just for the money – which would probably be less than $300 a year. Getting to the Post Office is a pain at times and just not worth it. I also hate to see people throw their money away by spending $1.30 to insure a cheap item.

 

If I don’t start to self-insure some of the packages I might consider an outside insurance carrier. I remember reading about one where the cost was about half of what the Post Office charges. I just have to find that information again.

 

 

Whenever I receive something that is sent Delivery Confirmation all that is confirmed is that the package was stuffed in my mailbox or left on the ground next to my driveway.

 

Correct, but I figure if it made it to the mail box it is likely OK. The buyer could only claim that the item was damaged and would have to return it to me for a refund. They don’t get anything out of it. They could just as easily return the item to me, so there is no incentive for them to damage it and try to collect on insurance.

 

 

whenever I see someone states that they are self-insured, I always get the feeling that they are just looking for another angle to get a few more bucks.

 

Me too, but I can’t help but notice how many people buy insurance for really inexpensive items. I had one person buy insurance for a $5 item. I’ve had probably 20 people buy insurance for a $10 item and had scores of people buy insurance for $20 items.

 

 

You can get signature confirmation on a certified or registered package. It is a green card stuck onto the envelope. When delivered, the receiver must sign the card and it is mailed back to you.

 

The problems with this are: The expense of this is about the same as the insurance and my postal carrier just leaves the item with the card attached for me. I have to tear it off and sign it and stick it in the mail box for them to pick it up the next day. Not much security there.

 

 

The problem is eBay'ers will assume you're ripping them on the postage if you charge and then "self insure". I've thought of doing the same thing but in the end it's probably best to just continue insuring EVERYTHING.

 

Agreed. However, there are ways around this. For the under $50 insurance, all that is on the outside of the envelope is a stamp that says “Insurance”. I can stamp the packages with insurance. The person I spoke to at the Post Office said there was nothing wrong with this, but there might occasionally be a problem with someone somewhere in the system thinking that not enough postage was paid for mailing. I could get around this by stamping the back of the package or getting a stamp that says “Insured”.

 

 

The opportunity for fraud for the end user in your transaction escalates when the package is not insured. Think of this, when the buyer recieves his package, with no insurance stamp on it, he/she might get a bit greedy and claim they never got the package, even with delivery confirmation, which merely tracks the package from PO to PO. With an insured stamp on the package, the buyer is less likely to claim they never received the package, since they must fill out a federally sworn document alluding to the fact they never received the merchandise and wait many weeks to be reimbursed.

 

Delivery Confirmation now shows what time/day it was delivered to the actual address. My postal carrier scans the delivery confirmation sticker before giving me the packages. The only time the PO to PO is true is if you send it to a P.O. Box.

 

I can work around the stamp on the package. I’d also make the buyer fill out a Post Office claim form without telling them that I self-insured the package. That way it would discourage people from filing false claims as they would think they are dealing with the Post Office.

 

 

 

Just don't offer insurance under a certain amount. I won't insure under $20 for anyone it's just not worth a trip to the post office.

 

If you don’t offer insurance and the package gets lost, then YOU are responsible for it. That’s asking for people to claim that their package got lost.

 

 

Since I’ve been selling on eBay I’ve probably shipped 750+ packages. Of those I have had:

1. One lost that was insured ($15)

2. One damaged by water ($250 – they were stamps, not coins).

3. One that was not insured, but finally made its way to the buyer after a month.

4. One that a claim was filed for (under $100), but the package turned up in the buyers car after the Post Office showed him proof that it was delivered and signed for. I believe this was a honest mistake.

 

 

[bigd5]

For the inexpensive items I like to offer the insurance option to the buyer. If they decline insurance, I get a proof of delivery slip from my PO, notating that on such and such a day, a specific item was indeed shipped to such and such an address. Now, the end user could claim that an empty mailer showed up, but it hasn't happened to me yet.

That's FREE!

I try not to list items on Ebay for under $50 (just not worth the hassle), so I haven't had to get these all but a half a dozen or so times.

[crito]

If they pay for insurance I send it insured. It's amazing how lost packages mysteriously reappear when a buyer realizes he has to sign a P.O. form to receive a refund from me. I'm sure it's just a coincidence though.

[mark]

Greg:

 

I have never sold anything on ebay--I'm only a buyer. And I ALWAYS buy insurance because that way I don't need to worry about a big hastle with a seller if something is lost. So, for most sellers, I'd be a bit peeved if I paid for insurance and received an uninsured package. But that's because I don't "know" these sellers. If YOU told me that you were going to self insure, I'd have no problem with paying you for insurance because I "know" you from these forums. Ditto for several others on ebay from whom I have purchased several coins.

 

So, I think self insuring might prove to be an issue with buyers that do not know you because they haven't purchased much from you. But for buyers who have dealt with you enough to get to know you, I don't think self-insuring should be a huge issue.

 

Mark

 

 

[CarlWohlforth]

Coins less than $50 are mailed First Class and are insured privately

 

I have that line in the fine print in my auctions. I also state that insurance in already included in my shipping charge.

 

So what do I do when somebody adds an extra $1.30 asking to please be sure to insure a $25 coin?

 

That just happened to me yesterday. I will return the $1.30 and explain that the package is insured privately and the $3 shipping fee covers that insurance. However I will do my explaining in a note inside the package so they have to acknowledge receiving the package if they want to complain about the lact of USPS insurance.