We have all heard the term “There is no such thing as a free lunch”. This applies correctly to most things in life and truer words have not been spoken. In the shipping world, the United States Postal Service started offering free insurance for Priority Mail packages in $50 and $100 increments. On paper, this sounds like a great offering for shippers of all sizes. Now the USPS can compete with FedEx and UPS with offering a small portion of default coverage free of charge.
But when is “free” not actually “free”? When time is involved, “free” can start costing you money. Filing a claim for a lost or damaged package against this “free” insurance can be a major time drain. Take this example of filing a claim for a package that was lost in transit, but scanned as “Delivered”. This is a real, active (as of 12/17/2013) claim for a real package lost in transit.
- Filing the claim
Visiting the USPS website to file a claim is easy enough. The online claim form is a bit convoluted but manageable. Once a claim is submitted, you now wait. We waited 2 weeks and logged into the website to check the status. See #3, below.
- Following up on the claim
Call the USPS to follow up on a claim and you will be lucky to get a live person on the phone. An automated system will let you know that your claim in “pending”. This means: Please wait a little longer.
- The claim response
The response to our lost package was “USPS records indicate delivery of article”. Yes, the package was scanned as “Delivered” but the recipient never received the package. We now must appeal the decision. The appeal is labeled “First Appeal Submitted”. It seems like we are getting ready for more than one appeal. Please note, we have never been notified of the claim status. We found out about the status by checking the website and calling the toll free number.
- The appeal
We submitted an appeal online explaining the package was not received.
- The first appeal – Denied!
We were not notified of this, but when we logged in to check the status of the claim, we noticed that the status now read “Denied – First Appeal”. Since the package was indeed lost in transit, we filed a second appeal. We are now 2 months after the initial claim was filed.
- The second appeal
Pending as of 12/17/2013
- The settlement
UPDATE: 2/3/2014 – Denied.
We are not bashing the USPS claim process. The point is that this “free” insurance has now been going on for 8 weeks + with no resolution. If this package was insured with Shipsurance at a very low cost, resolution would have been completed weeks ago. When a claim is filed with Shipsurance, a request for supporting documents is sent out the same or next business day. When these documents (proof of value, proof of loss, photos & repair estimates – if necessary) are received, payment is typically made within 5 business days. Many claims are paid within 1 day! We also provide real phone support without an automated system asking you to say or type a 22 digit tracking number. Our online claims system provides real-time status updates with reminders sent to you on aging claims.
Now, if “free” means spending time hoping for a refund, then the free Priority Mail coverage is indeed “free”. If you or your staff values their time and you want to be able to refund your buyer or recipient quickly, this “free” coverage will end up costing you much more in time and goodwill.
This posting is not a shameless plug to insure your Priority Mail packages with a 3rd party insurer. It is providing the reader options and shows the differences in levels of service. Many small business owners would prefer to spend $1.00 to save 3 weeks of time.
The result of the 2nd appeal has come in. Four months of waiting and submitting documents and the claims was denied. The recipient never received their merchandise.