Buyer Beware When It Comes to Shipping Insurance for Things You Buy Through eBay and Other Online Services - 5,334 Views, 12 Comments
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You may not be aware of this, but when you purchase something through eBay or, really, any online service, and you pay for shipping insurance, that insurance does not actually go to you if anything happens to the item. That’s right. Shipping insurance protects the sender - also known as the seller in the case of an online purchase. You are still out the money you paid for item! Here’s how it works. Let’s say that you purchase an antique vase on eBay for $100.00. And because it’s an antique you decide to pay for insurance, just in case anything happens. Or maybe the seller requires that you purchase insurance, as some do. Now let’s say that the vase arrives, and as the delivery person drops the box onto your porch, the vase breaks. Now what do you do? Well, if you don’t know any better, you think “Well, darn, I really wanted that vase, but at least I got insurance, so I’ll get my $100.00 back.” Right? Wrong. Because when you contact the shipping company, and file a claim, the claim money is going to go to whomever actually purchased the insurance and insured the item at the time of shipping, and that is the sender - the seller. Now the sender has $200.00 - your $100.00, and the $100.00 from the insurance! And you’re out $100.00 and have nothing to show for it but a broken vase. If you are lucky, you have done business with an ethical seller, and they will refund your $100.00. If you aren’t, well… as the title says, buyer beware.
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This is not true when dealing with the USPS. I sell on eBay and pack very carefully but occasionally something will happen. In this case, all I do is send the receipt to the customer, they take the broken item and packaging to the post office in their city and file a claim. Then then receive the money for the amount the item was insured for plus postage. Linda
Comment by Linda — 8/28/2006 @ 6:48 am
Does Internet Patrol have any actual cases to cite?
I think Linda above is correct - the broken item remains with the seller, and one would need to present the evidence as is (broken item and packaging) to get reimbursed for it. As such, the seller might as well send the insurance claim to the buyer.
Comment by Walter — 8/28/2006 @ 9:17 am
Actually I have had this exact thing happen. I bought insurance. The figurine arrived cracked. I tried to claim it, and was told that even though I had the broken item, because the seller had purchased the insurance, the money would go to them and I would have to get it from them. I never ever heard back from them (so I think they sold it to me broken). So I didn’t file the claim because why should I put even more money in their pocket. Some sellers like Linda are probably honest and would send the money but this one wasn’t.
Comment by The Internet Patrol — 8/28/2006 @ 9:24 am
no
Comment by FIKIRTE — 8/28/2006 @ 11:12 pm
Recently purchased a bicycle on EBay and it was properly packaged in a bike box and shipped UPS. When it arrived it was badly damaged from items being sstacked on it . You could even see wher somene had walked on the box, resulting in a bent hydraulic brake assembly.
It was the Seller who had to file the claim and who ultimately, was paid the money. Fortunately, he was an upstanding individual and covered the cost of repairs.
Comment by RRegene — 9/1/2006 @ 6:57 am
Nope. With paypal and ebay you get back exactly what you spent. This is stupid.
Comment by odran — 6/25/2008 @ 1:32 pm
Yes the shipper must collect the insurance but and this is a big but, if they keep the money and don’t replace the item you do have recourse. If you paid by CC or Paypal, contact them. And then contact ebay and let them know what happened. Sellers are at a disadvantage these days with both paypal and ebay and can be bounced for screwing over customers.
Comment by Charli — 10/6/2008 @ 9:43 pm
always use a credit card, or paypal when dealing with (f)ebay the seller does NOT have to have to get insurance. CC/PP will get your $$$ back, if item does not arrive or is broken. Just file a clain within the proper time frame
Comment by rj — 11/2/2008 @ 6:53 pm
This is not true. If you ever do an insurance claim on USPS.com, you check whether or not the insurance money goes to the sender or the receiver.
Comment by Nancy — 7/28/2009 @ 4:33 pm
I have no idea where you get your info from but it is wrong. USPS allows for a claim check to go to sender or to the one you shipped it to, Also when something breaks all the seller does is send the buyer the insurance ticket so they can file a claim. The claim process is very fast these days for domesric, kess than 10 days and anything under 50 is paid at post office. UPS and FedEx also will send the money to the buyer. A seller cannot make a claim on an item that is broken since he does not have the item the buyer does and has to show it to post office. UPS is similar and may or may not stop by to see item.so I am not sure who you were using or maybe it changed since this was written but your facts are no longer relevant and are not correct.
Comment by Billy Pendragon — 9/5/2009 @ 9:26 pm
Ridiculous article! The seller pays for the insurance policy, so the money goes to the seller. How many sellers will risk being charged with mail fraud by NOT turning the money over to the buyer (assuming the buyer relinquishes his rights to the item). Unfortunately, some buyers will “claim” that something is damaged, demand a refund, and still want to keep the item. I, as a seller, would demand that the item be returned to me BEFORE paying a claim.
Comment by Greg — 10/13/2009 @ 4:16 am
As a seller on ebay, if an item is damaged in shipment. I file the claim and upon receipt of the claimed dollars I refund the buyer. Keep in mind that with insurance the item has to be picked up by the shipping company i.e. usps, ups etc.
Comment by Jackie — 10/25/2009 @ 2:04 am