posted on June 25, 2001 06:36:46 AM
Hello. We deal mainly in sports trading cards. Lately, we have been seeing some of our customers saying that they never received their package, lost in mail, etc. Since a majority of our items sell in the $1.00 to $5.00 range, we dont offer insurance on those items. But since we do see a increase in lost mail, we were wondering if all items should be sent out insured? And tack on the cost in postage? Some were new customers so some could be taking advantage. But one was a repeat customer and lost a $22.00 order. What do you do on your smaller value items. We ususally refund no questions asked as good customer service but it is starting to really eat into the little profits we make. Any suggestions would be greatly appreciated. Thank you.
posted on June 25, 2001 06:58:54 AM
You can use delivery confirmation for 50 cents even on media mail. I have never had a DC package get lost.
Remember that if customer uses paypal, billpoint or other credit card based payment, they can charge it back, whether or not they took insurance. My policy is that I add DC to all my items. Customer has the option to refuse but not if they pay with any method that allows a charge back.
posted on June 25, 2001 07:57:35 AM
Don't bother with delivery confirmation until the post office can make the system work properly. For low-ticket items like this I'd self-insure. Here's an example of how this would work.
Let's say you sell these items at an average selling price of $3.00, and out of every hundred shipped you lose two. That's a six dollar loss per hundred items, so in order to cover that you would need to add a six cent fee to each order. Yes, people howl about fees, and howl about self-insurance but this is really better than the buck ten that the post office charges and it allows you to refund your losses without taking a hit.
To weed out the fraud you might ask people claiming a loss to sign an affidavit stating that they never received the item. I ask people to mail me a statement, and explain to them that if the item shows up they either have to return it or pay for it again *and not doing so would be a felony*. You'd be surprised how many times those packages mystically show up the next day when you use the "f" word.
posted on June 25, 2001 08:06:07 AM
I've had lost non-insured lost packages twice. Both times I initiated the offical post office lost-item claim process, which does have the receiver formally sign that they never received the item.
Both times I never heard from them again, plus I get to let the PO be the "bad guy".
posted on June 25, 2001 08:08:52 AMLet's say you sell these items at an average selling price of $3.00, and out of every hundred shipped you lose two. That's a six dollar loss per hundred items, so in order to cover that you would need to add a six cent fee to each order.
And what happens if 75 of the 100 claim damage to their item?
This scenario does not work because you cannot accurately predict how many will file a claim.
posted on June 25, 2001 08:15:04 AM
revvassago, people who aren't good with numbers probably better just go with the USPS insurance, or have someone who is good with numbers help you out. Obviously, my example was just a simple one used for illustration, YMMV. You're welcome to hire me as a consultant to figure this out for you, but my fee would probably be higher than your savings on the insurance would be.
posted on June 25, 2001 08:25:40 AM
"This scenario does not work because you cannot accurately predict how many will file a claim"
If you are a high volume seller you can. People and companies do it all the time.
In any case, in the example given, you would want to charge, say, $.30, which gives you a 500% margin of error to protect yourself should claims increase, but also is low enough to not scare off customers. The PO insurance has a built-in fixed cost to cover the time involved in writing insurance (filling out the form, etc), so the cost is very high for low-cost items ($1.10 for anytinng under $50). The good thing about self-insurance is that you don't have to pay that fixed cost per each item, since there is no administrative fee for each item.
The chance of claims increasing more than 500%, say, is roughly the same as the Dallas Cowgirls deciding to kidnap me to use as their love slave. Yes, it could happen, but (sad to say) you don't really have to worry about it.
The "law of large numbers" is a wonderful thing, indeed...
posted on June 25, 2001 08:52:01 AM
Sounds like yet another way to tack a fee on to reap profits from your bidders....
This has nothing to do with "being good with numbers". Your example was based on AFTER THE FACT information. Just because on that particular 100 items there were 6 claims, it doesn't mean that in the next 100 items there won't be 99 claims.
The law of averages does not apply, because there are too many factors that affect it, such as:
1. Different bidders with different intentions
2. The "Unreliability" of the USPS
3. Different times of the year with different mail volumes
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posted on June 25, 2001 09:04:53 AM
So you would prefer that sellers charge buyers $1.10 rather than, say, $.30?
sounds like yet another way to tick off buyers.
The factors you mention are all merely probability distributions that certainly CAN be handled via appropriate statistical methods...by someone who knows what they are doing, of course.
posted on June 25, 2001 09:10:55 AM
From the sounds of it I do not think that the problem is with the post office, more like your bidders have found a new way of getting something for nothing.
Sports cards have a high % of fraud. I would only accept payment by bidpay or postal money order or cash as its low $ amounts.
posted on June 25, 2001 09:32:46 AMcaptainkirk: your veiled attempts to insult me are not needed.
I stand by my post that I feel that I should not force insurance on people who do not want it or need it. Many of the items I sell would not benefit from insurance, because the cost is so low.
I am not in the business of charging bidder A for bidder G's insurance claim. It isn't bidder A's responsibility, it is bidder G's responsibility. If they choose not to take insurance when it is offered to them, it is their own fault. It certainly isn't bidder A's fault!
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posted on June 25, 2001 09:46:20 AM
revvassago, you don't sound like you have a whole lot of business sense. Amateurs aren't likely to put much thought into refund policies. Saying that "the lost package is on their shoulders" if the buyer doesn't deal with the problem in advance is a very amateurish way to deal with refunds. That may work very well for the casual seller at ebay. However, a professional will want to have a more well thought out refund policy. Obviously, what anyone will do is dependent upon their business. In my case, anything I sell for over $25 is insured by the USPS insurance, with no exceptions. Anything under $25 is self-insured. If someone tells me their package was never received, I will replace/refund upon their signing an afidavit that they did not receive it. It is my opinion that asking for the signed statement virtually eliminates all fraud. I add about thirty-cents above the cost of postage to cover the cost of bubble mailers, other shipping materials, and self-insurance. Out of that, the bubble mailer is the most expensive part. Insurance is just a couple of pennies. I have almost no packages missing, after my requests for a signed statement. One package this year, out of hundreds so far, where the person wrote to me that the package never arrived. There were numerous others that claimed a lost package in the e-mail but the package showed up when I requested the signed statement. Anyone who is doing this as a regular business will do well to come up with a similar policy that will work for them. Saying "tough luck" to your customers who don't want to pay USPS insurance on a low-ticket item is not a well thought out policy, will not protect you from fraud, and will only anger your honest customers.
posted on June 25, 2001 09:51:47 AM
i apologize if you mistook my post. no attempt to insult you was intended, veiled or not.
My point was merely that the idea of insurance has been studied and understood for many years now, sellers who are comfortable with it and who sell a lot can apply the concepts.
But on the other hand, there are many people for whom statistics is a black hole, indeed.
Which category you fall into I have no idea. Those who are comfortable with the issues should feel free to consider self insurance, those who don't should stick with the post office.
If you don't want to "force" someone to buy insurance, don't. Its fine with me.
Each seller should set their own policies based on costs, risk aversion, customers, and so forth. Buyers can then choose to bid on items from sellers that meet their expectations on those policies.
posted on June 25, 2001 10:49:29 AM
Many of my items end for 2.99 or less. With that kind of tight margin, I cannot and will not afford the luxury of insurance out of my pocket. Many buyers do not see the benefit in paying for insurance on such a low priced item, and I am not going to force it.
But I always offer it, and it is in my TOS.
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posted on June 25, 2001 11:16:31 AM
i think yisgood (hi izzy ) gave you good advice. include d.c. in the price of shipping, and state that in the auction. i've read many others here saying their problems with missing packages have lessened, or disappeared, since doing that. seems to me the simplest solution in your case.
) gave you good advice. include d.c. in the price of shipping, and state that in the auction. i've read many others here saying their problems with missing packages have lessened, or disappeared, since doing that. seems to me the simplest solution in your case.