When to Buy Shipping Insurance Part One – The Buyer’s Perspective

13 Apr

You may also be interested in these guides: When to Buy Shipping Insurance Part 2 – The eBay Seller’s Perspective and The Perils of International Shipping With eBay and Paypal – A Guide to Successful Shipping Practices

January 2010 Update: Since it is no longer possible for sellers to offer optional shipping insurance on eBay, buyers no longer have the option of adding it. EBay finally realized sellers were using shipping insurance to tack on unexpected fees and shipping insurance in no way benefits buyers. Plus, with third-party shipping insurance there is little proof that a package is even insured in the first place. Buyers should avoid paying for shipping insurance whenever possible. Read on.

Shipping insurance is one of the most misunderstood topics for both buyers and sellers on eBay. Buyers purchase shipping insurance unnecessarily and many sellers don’t know when they should add it to their packages. This guide is split in three parts. First up – The Buyer’s Perspective.

When should a buyer pay extra for optional shipping insurance? The simple answer is never. It is the seller’s responsibility to deliver the item purchased in the condition it was described in the auction listing. If the item arrives in a condition other than it was listed then it doesn’t matter if the item was damaged during shipment or if the item was never in the condition the seller described. If you receive an item that is not as described and the seller refuses to accept a return and refund your payment you should open a Paypal dispute. You will win the dispute and the seller will be forced to accept the return and refund your payment in full including any shipping and handling charges. Many sellers have disclaimers in their listings saying “Not responsible for lost or damaged items if insurance isn’t purchased.” They may as well say, “The sky is purple.” The statement is not true. Every seller is liable for delivering the item as advertised regardless of what additional shipping services are purchased. The seller may refer to their disclaimer in their correspondence with you or in the Paypal dispute, but it won’t matter. Paypal will side with the buyer when the item received does not match the description in the auction.

Look at it another way: How many times can you expect to be offered optional shipping insurance when shopping online at a reputable retailer like Dell or Nordstrom? The answer is never because companies know their liabilities. If the item arrives broken or damaged they are responsible both legally and ethically to replace it. When a person sells you something on eBay, they take on these same ethical and legal responsibilities.

Finally, let’s imagine for a moment that you did pay for optional shipping insurance and the item you received arrived broken. Your best course of action is to contact the seller to organize a return. If the seller refuses, you should open a Paypal dispute stating that the item you received was not as described. If the seller still refuses to accept the return, Paypal will eventually decide in your favor, and instruct you to return the item to the seller. At this point, it is the seller’s responsibility to file an insurance claim with USPS if they think that is their best course of action. As the buyer, you can technically file the insurance claim yourself, but trust me, you don’t want to deal with it. As the buyer, you also do not have the documentation necessary to file an insurance claim so it would be impossible to file without full diligence and cooperation of the seller. If you receive an item that is not as described for any reason, including what may be postal negligence, your best bet is to return the item to the seller. You simply cannot take the seller at their word that they didn’t intentionally send you a broken or damaged item. Even if it is honest postal negligence, USPS/UPS/Fedex will still likely not issue a refund. You do not want to be out the item and your money if the insurance claim does not work out.

It is the seller’s responsibility to purchase shipping insurance because it only benefits them in the case that they must file a claim for damage during shipment. As the buyer, you have no responsibility to pay for shipping insurance.

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