Shipping policy advice wanted, please.

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ed4copies

ed4copies

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Carryover from the "shipping charges" thread, but a new direction, so a new thread.


Your answer, Gerry, (Chasper) brings up another point.

We have shipped hundreds of packages. From time to time, someone calls to tell us it did not arrive. In one case, it was a $300 order. We have always simply replaced the order and "moved on". (BTW, the $300 order arrived BEFORE we sent the replacement, pshewww). I have dealt with trying to collect package insurance in the past and found it "daunting".

By law, when it leaves here, the claim would have to be filed by the recipient. AND we would lose a customer and at least five IAP threads would debate our liability. This is certainly NOT what we will do, in the future, nor is it what we have done in the past. Even before "exotics", I replaced lost shipments at no cost to the recipient. But, it does sting on larger orders.

BUT, do any of you shipping gurus have a formula you like????

All packages over $100 MUST be insured?? (we could self insure, on this basis-I think)

FEEDBACK, please??
 
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For me I always ship with tracking and insurance for anything over $100. I insist on it especially if it's international.
 
Chief Hill said:
For me I always ship with tracking and insurance for anything over $100. I insist on it especially if it's international.
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Same here.

One orders less then 100.00 we would usually just replace the items and reship. Adivse that if the original did show up to please call us back and we would issue a return label for them. Anytime this would happen, a note would be placed in the customers file. Just a way to keep track of it and identify any patterns..
 
I know some don't like it, but I think that the way BB has his site set up is real good.
It is very well to the point and if you want to claim you didn't know you are really blowing smoke. On the other hand if you don't want to pay the extra couple bucks for insurance you can do so "at your own risk"

In any case I think insurance should be at least offered if not strongly suggested if shipping USPS. For UPS or FedEx then only if over the $100.00 that is built in.
 
I ship all packages without 'extra' insurance. Regular 'flat fee' shipments up to 1 kg(2.2 lbs.) are automatically insured up to $100 by Canada Post. If a customer wants insurance above $100 than I would do so at their expense.
 
Ed,

I believe all order should be tracked and anything above $50.00 be insured.

I personally don't want the hassle of not knowing whether the package made it or not (the reason for tracking) and in some cases it gives you extra protection from unscrupulous individual (not IAP).

Insurance is of course for extra protection since like you, I believe it is partly my responsibility until the item made it to the buyer. It is easy to say insure or take the risk but in the end, I cannot leave the buyer "stranded" for lost or damaged package.

Self insuring (or flat rate shipping or even free shipping) after a a certain order amount can be used as an incentive for buyers to buy more...choose your poison lol ;).

Just my 2 cents.
 
Some things I believe about insurance and delivery confirmation.
1. Insurance with USPS is a waste of money, they don't very often or very promptly pay even when they clearly do lose a package; ditto UPS and FedEx.
2. It is perfectly honest to offer insurance, accept money for insurance, and simply do nothing except keep the money. If the package gets lost you send replacement or refund. It is called self insurance, you are the insurance company. You should even make a few dollars over the long run and your customers will get a much quicker resolution to their insurance claim than they would have gotten from the shippers.
3. It is equally honest and acceptable (note that I didn't use the work "legal") to require buyers to purchase the self insurance for purchases over and amount you set.
4. Delivery confirmation is worth the time and cost. Be vigilant about a customer who claims non-delivery when no delivery confirmation was provided. Some customers seem to have a way of claiming non-delivery every time a package is shipped without delivery confirmation.

Most of my experience and opinions come from the major direct marketing companies I've worked for, but I've seen a nifty little scam on ebay with our home business. The customer wins the bidding for maybe $20, they pay for merchandise, shipping and insurance. When the package arrives they claim the item is broken (or that it never arrived) and that as a vintage merchandise expert they know it is worth $100, so they file a claim for $100. Apparently when USPS gets the claim they will sometimes pay the full $100. These people are not very happy with our little self insurance business, but I'm not very happy with them either.
 
I completely self insure (and do not charge anything) on all orders purchased through Turntex.com. I had a $900 cactus blank order to Austria that never showed up so I just bit the bullet and sent replacements. I also had a smaller order to John Crane (IAP Member) in Australia that never made it so I sent new blanks to him. Other than those 2, I have not had any issues at all.
 
I don't ship enough out these days to worry about insurance and such.

But, when I had my frame shop and was shipping many boxes each and every day to all corners of the country via UPS, I self insured and charged the customer for the exact same amount that UPS charges. Back in the day I think it was $ .35 per $100. I knew it was going to be much more trouble and work to file claims and figured if UPS can make money on it...why can't I? And I did! In 4 years of shipping I never had a single lost or damaged shipment.

Bottom line, I like to be able to decide now if I want to pay for insurance and if I decide not to...my responsibility. I do not like the rates the post office charges for insurance and I sure would not want to have file a claim. I usually will opt for insurance if a package value is over $500. Below that I take my chances.

Doug
 
jdoug5170 said:
I don't ship enough out these days to worry about insurance and such.

But, when I had my frame shop and was shipping many boxes each and every day to all corners of the country via UPS, I self insured and charged the customer for the exact same amount that UPS charges. Back in the day I think it was $ .35 per $100. I knew it was going to be much more trouble and work to file claims and figured if UPS can make money on it...why can't I? And I did! In 4 years of shipping I never had a single lost or damaged shipment.

Bottom line, I like to be able to decide now if I want to pay for insurance and if I decide not to...my responsibility. I do not like the rates the post office charges for insurance and I sure would not want to have file a claim. I usually will opt for insurance if a package value is over $500. Below that I take my chances.

Doug
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If I read this right, you would be OK with having a $450 order from us get lost. You would then replace this at your cost and not expect "exotics" to do anything??

I like your spirit, but I believe you are one of a kind!!! (OR I am NOT reading correctly!!)
 
Have not ordered anything from woodturningz or CSUSA in awhile, they used to charge an insurance fee even on orders less than $50.00. Don't think paying insurance fees out of line.

Never had a problem with those folks, got all orders.
 
Ed,
I can only answer this as a customer, as I don't do much shipping to customers. I never buy insurance, and I wouldn't expect the shipper to replace a lost package if they could prove they actually shipped it. But, to protect yourself, I think it's a good idea to make the customer accept or decline insurance as part of checkout (like Bill does on AS). That way, you are off the hook. Whether you decide to replace a lost package after that is up to you, but you have no liability.
 
OK, I have a question about self insuring. When you self insure, do you charge insurance to everyone or just those that request it and do you state you are self insuring?
 
I have had several orders lost or torn open by USPS. Keep in mind this is for group buys so replacing lost or damaged goods could get real expensive, I have no profits to absorb them at all. But careful forethought has prevented me going bankrupt or the group buys having to be shut down.
What I do is simply have a 5%-15% mark up on the cost of all items since lost damaged or defective merchandise is a part of the cost of providing it. It does take some time to know just what percentage of losses are going to be involved with any given item. Put simply the rate of loss is added to the cost of each item and I replace orders as needed. If done carefully it works really well but is risky and requires that every customer absorb part of the cost of mistakes.

So far this is the only answer I have used. If I ever thought I could not cover the losses that might happen, I would require insurance paid by the customer. I am not in a position to accept additional operating expenses in any way though. Provided I was running a for profit business I would very likely simply insure any package I was not comfortable covering myself. and that would be that. I do believe that when a customer is paying for an order, they are paying for it to be delivered though. Not just mailed.
 
Daniel said:
Provided I was running a for profit business I would very likely simply insure any package I was not comfortable covering myself. and that would be that. I do believe that when a customer is paying for an order, they are paying for it to be delivered though. Not just mailed.
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This is the "rub", Daniel. I am very comfortable being responsible for MY mistakes. However, I am increasingly aware of my inability to influence the United States Postal Service. So, when I "mail it", I HAVE fulfilled MY obligation.

BUT, if it does NOT arrive at the destination, I sympathize with the purchaser, and replace it at no charge to them. Good news, it does NOT happen often.

The original thread, however, talked about the costs that are "add-ons", and how unsavory these practices are. I prefer to be VERY SAVORY!!! So, that's my dilemma.

Oh, and our profit margin is very slim. So shipping twice not only eliminates profit, it also cuts into cost of goods. (for you accountant types)
 
Mannie, regarding your question, and what I just wrote about how I do things. In truth that mark up percentage is basically the same thing as charging everyone for insurance. There is no discussion about it. most people in my group buys have no expectation that lost orders will be replaced (but they always are, knock on wood) and often the members even go out of their way to say don't replace it (I do anyway). but the system is not a guarantee of replacement. if the percentage ever failed to cover loses their is nothing I could do about them. So I would not want to advertise it as Insurance in the traditional since.
 
Ed, I recognize your desire to be VERY SAVORY, and it is much of what I love so much about you.

Having said that I will also add that this is business, and sometimes business is about the numbers not the heart. appropriate pause here for you to weap......

Now buck up old boy and take it on the chin. The hard truth is in order to be in business, your customers are going to pay every cent of the cost of that business, including your income. At some point you have to find in yourself enough caulosness to charge them for the lighting, telephone, product, packaging, and yes even the postage. and I am sorry my friend they even have to pay you to carry it to the mail box. I know it is cold and ruthless, not everyone is cut out to be a business owner.
The issue as I see it is in what it is called when the customer gets the bill. if they are going to flip out over paying handeling, don't charge handeling, charge them actual postage. when they figure out that actual postage is more than you pay in postage fees we will have to come up with anouther term. call it shipping.

In the end it is not going to change what the customers pay by one cent. just how they feel about it.

I have seriously thought of posting a list of the receipts I have paid in the last 6 months that are only shiping supplies or post office receipts. It would not matter though, not enough people would ever see it to matter. but the truth is a package that the post office charges you $4.80 to mail. did not cost you only $4.80 to mail.
No matter what your customer thinks of it, they are going to pay that extra expense.
 
Ed I think you have it right and sounds like it wont change. I believe you can make a single person happy but if you make him mad he will tell everone he knows. This does not happen often so couldn't just add a small amount on each item to make up for it when it does. No one would complain because it would be built in to the price.

Ray
 
ed4copies said:
Carryover from the "shipping charges" thread, but a new direction, so a new thread.

BUT, do any of you shipping gurus have a formula you like????

All packages over $100 MUST be insured?? (we could self insure, on this basis-I think)

FEEDBACK, please??
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As a matter of practice, my shipping policy says all packages are insured - regardless of size of shipment.... the insurance charge is built into my shipping charges.
 
We don't actually get into the old "FOB", "FAS" etc policies at our level of shipping, but this was Big negotiating points on some of the shipments I handled and could make or break a deal.... 'course I was dealing in multiple truckload levels, multiple containers, ship charters, etc.... but if we set our terms as fob point of origin (which is technically wrong - there's actually another term that should be used), then the onus falls to us to ship and the materials pass title at our door. Fob at destination means we own it till it arrives to the customer's door.

While this has a technical merit, in our business practices, it's not very practical...
 
The overwhelming expectation on a direct to consumer transaction that the shipper is responsible until delivery. The only way to keep customers happy is to accept that responsibility, even though it is not a legal requirement. That is why direct merchants use the phrase "shipping and handling," or if their legal department is on the ball they use the phrase "shipping, handling and guranteed delivery." They charge more than the actual shipping cost to pay for things like insurance.

It is not uncommon to see an online merchant offering "free shipping" but still charging for handling. Not so many shippers still charge extra for delivery insurance, most build it into the "shipping and handling" rate.

A few years ago I consulted with a company who was named in a class action accusing a group of direct merchants of profiting from from "shipping and handling" charges by charging more than it actually cost. They were able to put their financials together in a way that accurately showed that they were spending more for picking, packing, shipping and delivery insurance that it was costing them. They won and were excused from the suit, it only cost them a few tens of thousands of dollars in legal fees and a mere pittance in consulting costs.
 
As a customer, with one exception*, I expect insurance for anything that I purchase.

I don't purchase from the "cheapest" vendor who matches any price on everything - because I know that their profit margins are so small that their attitude will reflect it if I have a problem. I have a friend that purchased a several hundred dollar order from one of these kind of vendors (but computer related) - just as the vendor was going out of business. Recovery of his money was difficult.

Stores and operators have to make money or they can't stay in business. Too much risk or even uncounted risk is a recipe for failure eventually.

Insurance and trackable (if possible) for me.

*I have been a user of some items of Harbor Freight since the '70s. They use to be horrendously slow in shipping. It had to come from China by boat. :rolleyes: I accept that and I don't expect things from them to be delivered tomorrow or next week.
 
I believe we as a penturning community have become spoiled by the vendors within this group. Many if not most people offering items for sale add freebies within each order that most people have come to expect as a normal course of action. Now, the vendor may be doing themselves a favor by getting rid of excess or slow moving stock by doing this, but it does increase the cost of each order.

I have done business with several vendors that allow the customer to choose the delivery method. I do appreciate vendors such as AS, CSUSA and others that offer multiple shipping methods and allow me to opt-in for insurance if I want to add insurance. AS for example offers a selection of "cheapest method" meaning they will find the cheapest method but it may also mean my order will be another day or two for delivery. I'm sure this causes them more time searching for the cheapest method and we know time is money.

As to insurance....
Insurance covering the safe delivery of a package is a risk I should assume or not. Shipping insurance is like any other insurance...what costs am I ready to cover if something happens to me? I have a deductible for car insruance where I agree to cover small problems or a portion of larger problems. Everyone would like the ability to buy life insurance the day before the die if we knew when that may happen.

I beleive all vendors or individuals offering items for sale should offer insurance on the products being sold. If the buyer makes a conscious decision not to buy insurance, the buyer assumes the risks of the package not being delivered.
 
I don't see any easy answer to this. Most people probably feel the seller is responsible until they recieve their order and never think about the fact that once it is shipped it is out of the sellers control. If I ever started a mail order business I probably would self insure or purchase insurance and just figure the cost of it into the selling price of my product so that no one would complain about added on costs. This is just my personal opinion but it may not be the right one since all of my selling has been on a face to face basis.
 
How often is this an issue? If you raise your prices by 10 cents a blank, or your shipping by a dollar an order, and put this into an 'insurance fund', would that cover the very rare problems that may develop? I

This is essentially the idea in the restaurant industry...in university, you paid .25 cents a day to the restaurant, and they would cover any 'walk-outs' that occurred...over 5years, I think I paid in a LOT, and never collected...others seemed to need it all the time.

So essentially, an 'insurance fund' might be a good idea - esp. with Canadian and international orders, as Customs sometimes loses these.

Andrew
 
If I read this right, you would be OK with having a $450 order from us get lost. You would then replace this at your cost and not expect "exotics" to do anything??

I like your spirit, but I believe you are one of a kind!!! (OR I am NOT reading correctly!!) __________________


Ed, you read it completely right. If I opt to not pay insurance, I would expect it to be on me. I consider my form of self insurance with all of the premiums going to me.

I've had great results and service from all of the shipping vendors once they figure out how to find me...that can be a challenge. I wish the drivers would learn how to pick up their cell phone and ask for directions. My phone number is listed on most shipping labels nowadays.

Doug
 
OK, I have a question about self insuring. When you self insure, do you charge insurance to everyone or just those that request it and do you state you are self insuring?

Monty....I did charge everyone in the day on orders over $100 and yes, it was well known that I self insured. My customers knew that if anything was wrong there would be no hesitation on my part, they would be made whole immediately with no long discussion.

Doug
 
I used to buy from a vendor (entirely different hobby) that saved shipping costs by using surplus stuff for packing... one day I got a package that had a USED PIZZA BOX as filler.....honest...pepperoni grease and all. We don't do business any longer. I'm good for handling and insurance... just tell me up front, not after 17 clicks and after I enter my credit card number.

By the way, I got a package from Ed...er...~Dawn today... very happy!

Tom
 
leehljp said:
As a customer, with one exception*, I expect insurance for anything that I purchase.
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Ed, I tend to agree with Lee. As a consumer and also as a sometime seller, I feel insurance (either purchased from the carrier, or furnished by the shipper) is expected.

That said, sellers like you and many others on this forum and outside this forum who offer great service, good selections and reasonable prices, should not shy away from asking the purchaser to provide insurance, if they so desire. I received two orders this week, one from you, the other from Bill at AS. In both cases enough FREE blanks were sent to more than offset not only the shipping but also insurance. The difference is, AS gives the choice to pay the extra cost of insurance if you desire.

I understand that extra effort would be involved for you, but unless you are willing to replace uninsured shipments (which I understand you currently do), this is the only acceptable out. Make it clear that the buyer is responsible for lost shipments UNLESS they elect to insure.

Personally, I usually elect to insure on orders over $50. I believe that having insurance gives the package a little extra attention to assure it gets where it is going.

BTW, thanks for the beautiful FREE blanks in my order which came today :)
 
ED, Look at what every cost in insurance costs. divide that with the total amount of items in the shipment. Average the cost for a month. You should now a a per item cost for the insurance. Add that amout to the cost of the item. I ordered the complete setr of cat blanks There was six blanks Cost of insurance was 2.50. The cost per item for insurance was 41 cent. Add that to your cost base.
 
ed4copies said:
.....I am very comfortable being responsible for MY mistakes. However, I am increasingly aware of my inability to influence the United States Postal Service. So, when I "mail it", I HAVE fulfilled MY obligation.....
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I don't know what others think; but I do not agree with that thinking, at all. Far as I am concerned.....as either a buyer or a seller.....the obligation is not satisfied until the product is in the hands of the buyer. The seller can choose any method of delivery that he desires from hand delivering the product himself to contracting with some third party to deliver the product; but the sellers obligation is to put the product in the hands of the buyer. In the case of using the USPS or the like, they are the seller's agent and he is ultimately responsible directly or indirectly for their performance or lack thereof.

If the shoe were on the other foot and a buyer could show that he mailed a payment, would you ship the package even if you never received the payment? I think not!!

This might make an interesting poll question to see what everyone think about where the sellers obligation ends??
 
.....the obligation is not satisfied until the product is in the hands of the buyer. The seller can choose any method of delivery that he desires from hand delivering the product himself to contracting with some third party to deliver the product; but the sellers obligation is to put the product in the hands of the buyer.


I could take an opposing view in that if I select the shipping method, I am instructing the seller to use a specific shipper on my behalf. The shipper then becomes my agent who has assumed responsibility for my goods until they are delivered.

 
beck3906 said:
.....I could take an opposing view in that if I select the shipping method, I am instructing the seller to use a specific shipper on my behalf. The shipper then becomes my agent who has assumed responsibility for my goods until they are delivered.
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That argument might fly if the buyer is offered an unlimited choice of "ANY" shipping method of his choice; but that never happens. Commonly you have only two choices.....USPS or a "private" carrier and maybe regular delivery or some type of expedited service. Basically, you do not have unlimited choice of service; but rather are offered a few seller defined options.
 
Randy_ said:


If the shoe were on the other foot and a buyer could show that he mailed a payment, would you ship the package even if you never received the payment? I think not!!

This might make an interesting poll question to see what everyone think about where the sellers obligation ends??
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Randy makes a good point. If the buyer said he sent payment but the seller never recieved it they they would not ship the order until they get the payment. By the same token the buyer is going to assume the seller did not ship the item if they don't recieve it.
 
In the case of your "check in the mail", nothing is lost. If the check is not received by the vendor, it is not cashed and you have not paid.

Conversely, once I ship ten blanks, I am out ten blanks. The postal service has it, and it has value.

An uncashed check is simply a piece of paper.

Can you see the difference??
 
I want to introduce a few contract law items to the discussion -- I generally order and pay by credit card. My contract with the Credit Card company (AKA a bank) is that they will pay the merchant on my behalf, and I will be receiving a product. The contract (agreement) include that I will receive the produce in usable condition, and if not that I have the opportunity to hold the payment UNLESS I have specifically agreed to waive the guarntee of receipt -- such as Bill Baumback allows.

Merchants have similar agreements with the Credit Card companies --

Several ways to approach it, but the contractural basis still stands behind the scene, especially with credit cards (and Pay Pal or similar).
 
In regard to the conversation Randy is having above.
Certainly a supplier can say that their obligation ends when they turn the package over to the shipper.

This would be at the expense of very unhappy customers and loss of both future business and reputation. Not only is this unacceptable to Ed (Yes I know I am speaking for you, sorry) It is not even acceptable to me in the way group buys are ran. And yes I have to be very careful to protect the reputation of group buys.

So to preserve Reputation , trust and our own expectations as people. that lost order is going to be replaced, it is going to be replaced at our expense. Question is who ultimately is going to pay out of pocket for that expense and how is it going to be charged. no shipper is going to get another box of blanks together, Ed is. And they did not come to him free, He is going to pay again to mail it. The post office is not even going to waive the fees for the package that replaces the one they lost in the first place, Ed will pay that also. and nobody is going to do one thing about an inconvenienced customer except Ed offering his apology. And He is the only one that did everything that was in his power to do correctly.
 
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ed4copies said:
In the case of your "check in the mail", nothing is lost. If the check is not received by the vendor, it is not cashed and you have not paid.

Conversely, once I ship ten blanks, I am out ten blanks. The postal service has it, and it has value.

An uncashed check is simply a piece of paper.

Can you see the difference??
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Of course I see the difference, Ed. But your example is not inclusive and does not fully address the principle involved. Suppose the buyer sent cash rather than a check.....(stupid, I know; but certainly his option).....or suppose this was trade rather than a pure sale and the "buyer" sent merchandise rather than a check?

Whether you or others agreed or not, it will always be "MY" opinion that "I", as a seller, am responsible until the merchandise is in the hands of the buyer and in the condition promised.

I'm not really interested in debating this issue. I am just offering "MY" opinion and understand and accept that others will have different ideas.:)
 
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