The United States Postal Service has been in official operation for more than 50 years. It’s the only delivery service that reaches every address in the country, and it has more than 34,000 retail locations spanning the nation. Its longevity, logistics, and reach make the USPS one of the most reliable delivery systems available.
Our country’s postal service is a trusted source for sending and receiving mail—but for many businesses, it’s actually not the best shipping carrier when it comes to package insurance protection. Fortunately, there are other options that offer a streamlined user experience, affordability, and greater protection.
In this article, we’ll discuss the importance of shipping insurance, along with the best package tracking alternatives to USPS.
Why Is Shipping Insurance so Important?
Package loss, damage, and porch pirates are on the rise. Just over 64% of Americans were victims of package theft in 2021, and 53.5% had more than one package stolen from their doorstep in the same year. Check out our page on how to stop porch pirates for more information.
Across the nation, more than 1.7 million packages go missing on a daily basis, adding up to $25 million in lost goods and services. The statistics grow even grimmer in major cities: In places like New York, Washington D.C., and Denver, around 15% of packages never even make it to their intended destination.
In a world where 91% of Americans receive at least one package per month and 40% raking in packages every week, there’s a lot of opportunity for packages to wind up letting down recipients. Today, consumers spend a lot of time online shopping and anticipating the arrival of their orders. They track, await, and plan for their packages. As time ticks by between purchase and safe delivery, anxiety grows and emotions are at their peak.
With emotions running high and shipping out of the merchant’s hands, it only takes one poor delivery experience to fracture the trust between the brand and buyer. Merchants have limited capabilities to repair the broken trust, and the scorned customer won’t hesitate to blame the merchant instead of the carrier (or thief).
One way ecommerce brands can take back some control over the delivery experience, even when things go south, is to offer customers shipping insurance against theft, loss, or damage.
While package protection can’t stop a thief from swiping stuff off of stoops, it can provide peace of mind that even if something goes wrong, the customer is protected. This ongoing surge of shopping and shipping isn’t about to go away, which means shipping insurance is a crucial tool for any ecommerce brand’s toolbox.
Drawbacks of USPS Shipping Insurance
The importance and impact of shipping insurance is evident. When deciding to offer this perk to people, you may be tempted to choose USPS package insurance as part of the delivery. However, there are many reasons to avoid this popular option.
Here are a few drawbacks of USPS shipping insurance for ecommerce brands:
1. USPS Insurance Is Costly
USPS package insurance is more costly than other reliable shipping insurance options, with rates increasing based on package value. Package values up to $50 cost $1.65, package values $50.01–$100 cost $2.05, and the price per additional $100 of insurance is $4.60. For ecommerce brands shipping a high volume of packages, these costs add up quickly.
2. USPS Insurance Has Many Caveats
While USPS package insurance provides coverage of up to $5,000 for packages that are lost, damaged, or missing contents, there are many caveats and restrictions to the service. Insurance doesn’t cover fragile items, concealed damage, or packages that have been signed for (even if they’re damaged). USPS has a host of other stipulations that should give any ecommerce business pause before choosing their services.
3. Filing a Claim with USPS Is Complex
As any business using USPS shipping insurance will quickly discover, the service is difficult for both business owners and customers to navigate. Insurance claims require receipts and photographic evidence—and even with proper documentation, they could still take months to process. The complex experience pales in comparison to simple, user-friendly shipping insurance apps, which offer quick service with the tap of a button. This complex process leaves the merchant eating the cost of a refund or replacement until the insurance might kick in.
What About UPS and FedEx Shipping Insurance?
When looking for the best USPS alternative, many merchants turn to UPS or FedEx. These omnipresent carriers are also great carriers of goods, but they can still fall short when it comes to insurance cost and ease of use.
Rather than using a simple mobile app, FedEx requires customers to file claims online, by email, or by fax, and claims must be made within 60 days after the shipment is sent. Packages valued at $100 or less come with free insurance, and after that, insurance costs $1 for every $100 of declared value.
UPS has an equally convoluted process, using a third-party company to process claims that exceed $100 in declared value. Products shipped in low-quality boxes are not covered, and there may be insurance limitations depending on the shipping location.
In a nutshell, providing your customers a way to protect packages is a way to make the best of a bad situation (stolen or damaged packages). If you offer protection at checkout and your customers are met with hoops to jump through or time-consuming claims forms, they’re still going to leave the post-purchase experience with a negative outlook and a low probability of returning.
4 Reasons Route Protect Is the Best USPS Insurance Alternative
When it comes to frictionless and affordable shipping insurance for merchants, the choice is clear. Route package protection offers the best all-around service, giving shoppers a seamless, proactive way to track packages and file claims. It’s the sure-fire post-purchase tool that merchants can count on to turn a bad experience (and potentially lost customer) into a positive opportunity.
Here are a few reasons ecommerce companies—and their shoppers—love Route.
1. Merchants Savings
When a package is damaged, lost, or stolen, it’s the merchant’s responsibility to issue a refund or replacement if they want to salvage the customer relationship. Without efficient and comprehensive package insurance, the merchant has to simply eat the costs associated with refunding or replacing. A lost or stolen purchase isn’t a matter of if—it’s a matter of when. Large enterprise brands might not notice the price of forgoing insurance, but smaller companies will take a hit.
Route Protect, however, empowers ecommerce merchants to tailor the level of protection they offer. With choices to let the shopper choose if they want insurance or not, pay for protection automatically if the cart total exceeds a certain threshold, and more, merchants can rest assured that they’ll be covered just as much as their shoppers.
2. Out-of-the-Box Integrations
Rather than going through timely and complex processes, Route offers out-of-the-box integration with every major ecommerce platform, including Shopify, WooCommerce, Magneto, and BigCommerce. Customers can access buyer protection with a simple click, then self-resolve any issues that may come up during the shipping process.
3. Customizable Protection
Route understands that shipping insurance shouldn’t be one-size-fits-all, which is why our technology allows merchants to customize buyer protection to fit their business model. This tailored approach offers peace of mind and greater merchandise protection while aligning with any brand’s unique budget and position. This includes a carbon neutral shipping option for eco-conscious brands.
4. Self-resolve Issue Claims
Customers don’t want to wait for help—especially when they’re wondering what happened to their package. Getting stuck in chatbot purgatory will only worsen their feelings of frustration or betrayal. Fortunately, Route empowers customers to resolve issues on their own with just a few clicks. This simple claims process takes manual approvals off the to-do list for sellers and alleviates the shopper’s stress in just seconds.
Give Your Customers a Better Post-Purchase Experience with Protection
More than 10,000 merchants and millions of shoppers choose Route for shipping insurance that offers peace of mind and simplicity during a stressful moment. Route is proven to boost customer loyalty and increase purchase intent up to 50%. With $3.7 billion in protected merchandise, Route is the reliable, streamlined choice for shipping insurance.
While carriers like USPS, UPS, and FedEx are trusted for getting packages from point A to B, shipping insurance simply isn’t these carriers’ bread and butter. Route was designed specifically to enhance the post-purchase experience for brands and shoppers, including protecting what’s purchased no matter what happens.