Shipping Protection

“Is Shipping Protection Worth It?” Answering 6 Common Consumer Assumptions

Aaron Sullivan
July 10, 2024

It’s incredibly frustrating when high-value items (or any item) arrive damaged or don’t arrive at all. Many merchants now offer shipping protection to give you a convenient and affordable way to recover from these losses.

But when you see the option to add shipping protection to your online shopping cart, it’s natural to do a cost-benefit analysis. Is it worth the modest extra fee? Maybe you’ve never experienced a shipping-related loss, or you assume the claims process requires a ton of effort (it doesn’t).

In reality, shipping protection is becoming an essential add-on given the rise in shipping volume and — no surprise — the rise in package mishaps. Pitney Bowes forecasts a continued year-over-year increase in parcel shipping, to 28.3 billion packages in 2028, up from an anticipated 22.7 billion in 2024.

If you’re still on the fence about shipping protection’s value, here are six common assumptions about it that don’t hold up. 

#1: “Everything is already so expensive. I don’t want to pay for something I probably won’t need.”

When inflation stretches your budget, safeguarding newly purchased products gets more urgent. Already pricey items like furniture and electronics become bigger investments. If they arrive damaged, repairing or replacing them out of pocket will set you back even more.

Shipping protection is that safeguard. And even if you think you don’t need it because you’ve never had a shipping-related problem, the safety net it offers makes it worthwhile.

Consider these statistics:

In a 2023 study from market research firm CivicScience, 56% of surveyed consumers experienced problems at some point with a package delivery service. The issues included missing or damaged packages. Of these, 21% said they experienced problems “at least ‘somewhat’ often — with 6% experiencing this ‘very often.’”

Image of survey results about how often package delivery problems occur.
21% of surveyed consumers have experienced delivery problems at least "somewhat often." Image source

Then there’s “porch piracy,” or package theft. In its 2023 State of Safety survey, home security firm SafeWise estimates 35% of respondents said they experienced porch piracy within the last year. Over 65% of United States residents worry more about package theft than they did the year prior.

What would you pay for one less thing to worry about? Again, shipping protection only costs a fraction of the declared value of the items. It’s better to have it than wish you did.

#2: “Major carriers like UPS and FedEx automatically include shipping protection, so I don’t need to purchase more.”

It’s true that third-party logistics carriers include shipping insurance coverage — which isn’t shipping protection — on items with a declared value of $100 or less. If the item's value is over $100, insurance costs kick in. 

Many merchants pass these costs on to you, the recipient, in shipping and handling fees or in higher prices. Some merchants (though not many) opt out of paying for UPS and FedEx shipping insurance entirely.

But even if a merchant offers carrier-provided insurance, it might not be enough to give you the satisfying resolution that shipping protection provides. Here’s why.

Longer claim resolution times

Some good news first. With a few exceptions, both UPS and FedEx let you file claims online. The exceptions come from a handful of larger merchants that don’t let you start an online UPS claim without their approval.

That’s the first potential resolution delay.

Then you’ll need to gather documentation and photos supporting the claim. Besides a sales receipt and detailed product description, UPS requires seven photos of the damaged package.

In some cases, UPS and FedEx ask for a physical inspection of the damage at an approved facility — that’s another delay. FedEx lets you perform the inspection as long as the package was a ground shipment with a declared value of greater than $100 and less than $1,000.

Once the carriers confirm the claim has been submitted correctly, claim processing begins. For UPS, processing takes on average 8 to 15 business days

Fewer options if claims get rejected

At the end of 15 days, the claim might still be rejected for a variety of reasons (like improper packaging). A rejection leaves you with the option of filing an appeal or engaging in a back-and-forth with the merchant about a replacement. Yet another resolution delay.

Shipping protection from a provider like Extend costs a fraction of the item’s cost. For that amount, you’ll enjoy a significantly improved claim-resolution experience. 

You’ll still need to submit proof of loss or damage (like photos showing package damage or a police report for a stolen package). But claims are typically processed in minutes, not weeks. For approved claims, you’ll receive a product repair, a gift card, or in many cases a replacement product, saving you the time of reordering one.

#3: “Filing claims and getting a response will take forever. I’m better off just buying another product.”

Your time is valuable, which means you pick your battles. 

Say you’re about to purchase a $20 pack of press-on nails from ecommerce merchant Glamnetic, who offers the option of adding shipping protection. 

If you assume a claim means filling out forms and frequent calls to customer service, you might simply decide to buy another box if the first one goes missing.

Shipping protection from Extend doesn’t work that way. If your package arrives damaged or it gets stolen, you can start a claim with your email address. Online assistant Kaley will ask a few questions, and depending on the issue, you may get a claim decision in a matter of minutes.

Image of Extend's 24/7 virtual claims specialist, Kaley, beginning a hassle-free claim via chat box.
Kaley, Extend's 24/7 online claims specialist, can process shipping protection claims anytime, anywhere.

You may need to submit a few photos in case of damage or a police report when you suspect theft. But you won’t have to wait weeks to find out whether your claim has been approved.

This is a “battle” worth fighting. Plus you’ll have an extra $20 in your pocket.

#4: “I don’t want the hassle of sending back the damaged package if asked. Again, I’m better off buying another product.”

Rarely will a shipping protection provider ask you to ship back a damaged product in support of a claim. Photographs of the package are sufficient in the vast majority of cases.

But if you’re one of the rare cases, providers like Extend make it as easy as possible. You’ll receive a prepaid shipping label and clear instructions on where to take the damaged item.

If the damaged product is difficult to move, a merchant-approved service partner will handle the pickup at no additional charge.

#5: “If I need to file a claim, it will probably get rejected over something buried in the fine print.”

Some shipping protection claims get denied, but not usually because of hidden clauses in the fine print. For example, fraudulent claims or evidence of multiple failed delivery attempts could result in a denial.

It’s also true that not every product is eligible for shipping protection. But when ecommerce businesses attach optional shipping protection to a product, you can have confidence that genuine claims of carrier damage, loss, or theft will be accepted.

Eyewear retailer Felix Gray is a good example of what to look for while shopping online:

Image of cart at checkout on Felix Gray website that includes Extend Shipping Protection.
Felix Gray gives customers peace of mind by including Extend Shipping Protection at checkout. Image source

An accepted or approved shipping protection claim doesn’t automatically mean you’ll receive a replacement product. Depending on the circumstances of the loss, you might receive a full or partial refund via gift card, or a professional repair at no cost. 

These conditions aren’t buried in the fine print. Extend makes them publicly available here.

#6: “My credit card covers package theft, damage, and loss, so I don’t need shipping protection.”

Like the insurance provided by major shipping carriers, the “package protection” offered by major credit card companies is often not enough to cover every shipping-related issue. Policies vary by card, with some covering far less per claim than expected.

The Chase Freedom Flex card, for example, caps its coverage at $500 per claim. Say you buy a $1,000 area rug that arrives with a giant tear down the center. At $500 per claim, the card’s plan might cover the cost of a repair (which might be sufficient). But it won’t get you a new rug at that same sale price.

The more elite American Express Gold Card has an annual fee of $250. It won’t cover damage to or theft of property while “under the temporary care and control” of the shipping company. The lesson here? Equating “package protection” with shipping protection is not a good idea.

Shipping protection fills the coverage gaps left by these and other credit cards. Whether the product is a $100 hair iron or $1,000 rug shipped by UPS or FedEx, shipping protection fully covers the value of a loss after claim approval. 

Shipping protection from Extend is more than worth it.

Everyone values peace of mind. But how much are you willing to pay for it? The answers vary. 

Given the limitations of other forms of coverage, Extend Shipping Protection is much more likely to give you the outcome you want when carrier damage or theft occurs. This improved customer experience and peace of mind are worth shipping protection’s modest extra cost.

Merchants like Voro Motors and Jomashop do a great job of explaining the value of shipping protection to their customers. When other merchants follow their lead, many of the preconceptions above will start losing their grip.

If you still have questions about shipping protection, check out Extend’s complete guide.
Aaron Sullivan
Aaron Sullivan is senior content marketing manager at Extend. He specializes in writing about e-commerce, finance, entertainment, and beer.

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