WHY DO WE PAY FOR EXTRA INSURANCE WITH THE CARRIERS?

[amberwoodottawa]

This is something that has always bothered me. Why do we pay to insure our products' safe passage to our customers?

CP, UPS, Fedex all charge us for their mishandling of our goods. It is totally ridiculous that we are paying them extra should they screw up and damage or loose our item.

That is what we are paying for in the beginning isnt it? For them to deliver our goods in the same condition as we sent them out.

It gets even more ridiculous when filing an insurance claim. In the case of CP, they will only reimburse you, the cost of the item to you. So you loose your profit, you loose your packaging costs, you loose your eBay fees and PayPal fees you paid on the sale AND CP wont reimbuirse you for the cost of shipping the item.

Can you imagine paying them to safely deliver something plus putting on additional insurance and then when they loose it or destroy it, they expect to keep the money you paid them to deliver it.

I have it in writing from one of their claims people who said, we'll pay you this time but not the next as our policy wont allow us to reimburse shipping costs.

The other problem is that they will only pay you your COST of the item even if you paid extra insurance to cover the selling price of the item.

This is totally nuts. Lets assume I sell a one of a kind item that thru my good fortune I paid only $20 for but get a buyer to pay me $200 and CP looses it in the mail. I have paid eBay fees and PayPal fees based on the $200 selling price and I have taken out extra insurance with CP and paid CP $25 to deliver it after I carefully packaged the item with $10 worth of packaging materials. And after a few weeks of justifying my claim, I get $20 from CP and have to give my customer $225 back.

I am out of pocket my eBay and PayPal fees, my shipping cost, my extra insurance cost, my packaging costs and my profit.

I was only informed recently by CP (after 10 months) that I should only insure my goods for the cost and not the selling price. I have probably given CP an extra $500 in insurance premiums this year as a result of overpaying them on insurance and they wont give it back to me.

Sorry for the run on discussion but it is something that has really bothered me and something else I believe we are being ripped off by CP for.

[jaymor8]

Malcolm - Holy moly, it IS that bad, isn't it? I am starting to think that perhaps jewels*n*tools has the right idea. She won't insure her jewelry because she says that CP won't pay out on a jewelry claim. They consider it like cash. It could be touchy too, because as in your example Malcolm, what if I sell a vintage piece that is totally unique and irreplaceable? I would be screwed and my customer would be screwed? Do you think that not offering insurance would deeply affect our sales? I mean for me and my small items Mal - not you and your large instruments 😉

Let me know what you think!

Jackie...

[your-chic-shopper]

quote"they will only reimburse you, the cost of the item to you. So you loose your profit, you loose your packaging costs, you loose your eBay fees and PayPal fees you paid on the sale AND CP wont reimbuirse you for the cost of shipping the item. "


When somthing is damaged through Canada Post
My sold price on Ebay is my cost ..paypal and Ebay fee's are invloved in my cost .

I do not tell Canada Post my Cost , Just like Sears does not walk into the Bay and tell them their cost of somthing. My cost is what I tell CP , if they have a problem I print off the auction and fax it too them . never been a problem so far

Todd

[jaymor8]

Todd - so you have had to file some claims, then? How did it go and how long did it take??

Jackie...

[amberwoodottawa]

Jackie
Fortunately I speak from limited experience in having to file claims. I spend extra money and time in packaging most of my products because they are generally fragile at the same time fairly large and open targets for damage.

Had I not taken out extra insurance on everything I shipped this year and paid for the losses out of my own pocket I would be ahead of the game. So it is definately food for though on whether to take out additional insurance or not, remembering that only your cost will be reimbursed and not the value, whether you paid for extra insurance or not.

I just dont understand CP and the others failing to take responsibility for not being able to do their job. They are being paid damn good money to deliver our items safely and when they screw up, they still want you to pay their delivery costs and will reimburse you a fraction of your actual costs and you loose the profit on your sale because of their inability to do their job.

I have valuable antiques that I was considering to sell on eBay. Many cost me nothing as they are family heirlooms. Would that mean that should CP destroy or loose the item, I receive nothing?

Other items I acquired over the years at auctions etc. Same thing. First I have no receipts for things I acquired perhaps 30 years ago or so. So again according to CP, worth nothing.

It certainly is a dilema and one that CP and others have not taken any responsibility to properly address to their customers.

I wonder how USPS operates and whether or not they insure the COST or the VALUE of the item being shipped and insured and if they refund, under a claim, the delivery costs.

I know for a fact that anything shipped from Canada that USPS looses or damages, CP pays 100% of the claim and doesnt get any reimbursement from USPS and that CP has less damage and loss than USPS so the relationship between CP and USPS is a fairly heavy expense for CP (pretty one-sided).

It might be worthwhile if eBay was able to find a 3rd party insurer for us PSers.

[acurael]

UPS is the same way too - insurance only for the "cost" of the item - but they reimburse for shipping costs too.

And their insurance department is quite liberal with "cost".

[ospreylinks]

Jackie, I have had instances of having to file claims for lost goods with Canada Post.

I find them great for delivery to Canadian Residential addresses (and commercial too), not bad to the US, but give them an APO addressed parcel and you might as well file a claim for lost goods the same time you are paying for the postage.

You are right, Canada Post only reimburses the cost of the good. In our experience for claims, we had to provide an invoice showing the wholesale value of the goods, so someone saying their cost on an item selling for $200. is $200.? How do you substatiate this? Also they have reimbursed us the cost of freight in claims......

On manifests I use to show the value of goods as the sale value and pay insurance based on this amount (remember if you ship expedited the first $50. (or is it $100.) is included in the cost of freight). But since having a couple of claims and only being reibursed for wholesale, I am careful not to overstate value...

In terms of payment, it depends on the agent you get handing the claim. I have seen payment come as fast as 20 days and drag on for three months....

Jeff

[amberwoodottawa]

Overstaing values on the manifests can cause real problems as well as incur uneccesary costs not only for the seller but also the buyer.

In the case of CP if your cost was $50 and your selling price was $200, dont pay the extra for insurance as CP will only give you the $50 cost.

On the other hand, I bought something from a US vendor on eBay last month that was shipped by UPS. I paid $46 US for the item but he insured it for $300 US resulting in my having to pay tax and brokerage fees on the Canadian equivelant (valued at about $400 Cdn).

I was able to prove to UPS that the price was only $46 US and yesterday received a refund from UPS.

This is why he did this, as I have been told by others in the US. They are apparently able to super insure their goods shipped and if lost, reimburse the buyer for his cost only while collecting the full insured value for the parcel.

In this case, had the parcel been lost or destroyed, I would get my $46 US and shipping costs back and he would get around $254 to keep for the $2 or # in insurance that I paid for in my shipping fees he billed.

In all likelyhood, they will produce fake receipts to give to the carrier.

[ospreylinks]

The receipt I was referring to was not the bill of sale to the purchaser, but the invoice from the vendor I bought the goods from to prove value.

Jeff

[jaymor8]

Ok now I am thoroughly confused. Now...just listen. Same premise - I pay $50 for something and sell it for $200. When I sell an item, it is the 'buyer' who decides whether or not he wants his purchase insured. To the 'buyer' the item is worth $200 because that is what HE paid and it is HIS insurance. If the reverse is true - then should we not advise our buyers that 'if you choose to purchase insurance, the item you just won only cost me $50. Although you just paid $200, that is all it is worth!'? I mean, let's face it. That would be the absolute frustrating truth. Does what I am saying make sense?

I know the PO will say,'no no...it's is YOUR insurance not the recipient's' but that is bullcarp. If I had known that this is what it's really about, I would have told all of my customers that I will not provide insurance because it's not worth it. Do the buyers actually know that they are only insured for the lesser amount??

Pi$$ed in Quebec,

Jackie 😉

[treasure-pot]

Malcolm, in your instance it would not be UPS that would require the proof of a lower value but CCRA.

UPS is not a bonded carrier. They clear all goods at border crossings through customs. Customs will use available documentation and inspections to determine value and assess taxes and duties (if applicable). If the shipper showed a $300 value that would be the value that CCRA would use. UPS is then required to "front" the money for your shipment to CCRA and collect it from you when they deliver the goods to you.

If the shipper showed an incorrect value, UPS would have to go back to CCRA and convince them of the lower value and complete what used to be called a "drawback". Basically it would just be a partial refund of the taxes initially paid.

Bill

[treasure-pot]

Jackie, the buyer is insured for the full amount... it is the seller that is on the short end of the stick.

CP and I have had this fight a number of times and they consistently have asked to see my costs.

In your instance I would tell them that the item is purchased for cash in yard sales nd the insured value is your cost. I've done this in the past and explained that the item was old inventory that I was selling at my cost just to get rid of it.

Or, it was offered at auction and you actually took a loss on it. Would they still like to pay your cost?

Bill

[jaymor8]

But if it is lost or damaged, does the buyer get his $200?

Jackie...

[amberwoodottawa]

Bill
It is not just the extra taxes collected on the overstaing of the product shipped but also the extra brokerage charges UPS charged for clearing my goods.

UPS charges brokerage commission on goods they clear which is based on a certain percentage of the "Value" of the goods. Sometimes UPS uses a brokerage firm, sometimes they clear them.

I have received goods that UPS clears and collects their customs fees and taxes and other goods that I have been charged later by a 3rd party brokerage company.

The refund I received (after I talked to my contact in UPS in NB) is a UPS cheque for the extra taxes and extra commissions (brokerage charges) they levied on me when they delivered the parcel.

I have been told by a UPS rep that UPS does not make any money for delivery in Canada, the majority of the money paid for shipping stays in the US and they dont make enough on their Canadian shiopments to cover their expenses here. HOWEVER they are making fistfulls of money on brokerage charges which often exceed the shipping costs.

UPS is thinking of setting up a couple of northern border warehouses to accomodate big Canadian and US shippers who regularly move goods across the border by allowing them to ship large quantities to the warehouse and store their goods for UPS to pick and ship on their instructions.

[gem-n-i-gemstonz]

Hi Everyone,

I have always considered that I am acting as an agent for my buyer. They are paying the shipping costs, and the item has cost THEM $200 (using your example). I havent been asked to provide any receipts, and so far, only my wholesale orders(not my eBay stuff) has been lost. But I think in those cases, since I am acting as an agent for my buyer, I would show the wholesale cost of my buyer....in other words the $200. This is what makes sense to me.

What I dont understand is why no one has sued CP. If you pay for $XXX of insurance, why does it matter what the cost of the item is. If they are willing to take the moeny to "insure" an item, legally then shouldnt they be willing to pay that insurance once they have messed up and lost/damaged it?

I dont think the case of the US seller who superinsured his item is not right, given that he was sending stuff across a border(he should have realized he would cost his client extra money in duties etc). But, theoretically shouldnt we be able to insure something for whatever amount of money we want...as long as we are willing to pay the premium? For CP, doesnt that fall into the realm of "you made your bed, now lie in it"?

I am not implying we should use this right for dishonest actions(like the US seller...to me that is taking it too far...greedy). I do think though that we should be able to state what the cost of something is worth to us. What if I sent (for example)a painting to a loved one? Maybe they didnt buy it from me at all, but it may have significant sentimental value to me. So, who is to say what its worth?

Jaqui

[gem-n-i-gemstonz]

Whoops,

I dont think the case of the US seller was right.

And I think that CP should be legally bound by thier charge for the insurance.

Jaqui

[amberwoodottawa]

Here lies the problem. CP is not selling insurance perse. They self-insure. We in turn, are not "purchasing" insurance from them.

CP is prepared to pay us for any loss or damage under $100 at no additional cost to us. If our product costs more than $100, they are agreeing to compensate us our cost in the event of a loss for a small fee but only up to a certain value of the cost of the goods. That fee is not considered to be an insurance premium, more likely referred to as an administrative fee.

This is unlike the other carriers who I believe provide 3rd party insurance. I know that UPS, as an example even uses a 3rd party claims adjuster who I believe is retained by the Insurer.

That is why UPS told me that each of my instruments, packaged, would have to undergo extensive testing at their Montreal facilities before they would allow me to insure my packages.

Think of it in these terms. They dont inspect our goods before they are packaged, so they dont know if we are in fact packaging already broken merchandise. They also dont inspect every package to see if we are really protecting what is inside.

Imagine for a moment, someone packaging an already broken widgit, orignal cost $1 and insured it for $999 and then filed a claim, stating it arrived broken.

It wouldnt be long before the Post Office was bankrupt.

Im possibly one of the last people to stand up in CP's defense however I am confident that they cant be sued as they will sucssfully argue that they are not in the business of selling insurance and in fact have not been selling insurance.

The onus will remain on us to prove our costs and that will be the extent of their liability, providing we paid their extra fee for the extra value of the goods shipped (not extra value, sorry, extra cost over $100)

My suggestion: Look for 3rd party insurance. That means if CP destroys or looses something, we file with a 3rd party insurance carrier where we have paid for coverage based on our selling price. They would pay after CP paid their minimal or token amount to us being the cost of the item. I doubt however this insrance would be that cheap unless made available through our eBay membership.

[gem-n-i-gemstonz]

Hi Malcolm,

"CP is prepared to pay us for any loss or damage under $100 at no additional cost to us. If our product costs more than $100, they are agreeing to compensate us our cost in the event of a loss for a small fee but only up to a certain value of the cost of the goods."

Ok then, going back to our example, where the cost is $50, but it sells for $200....why then do they not say that if the item costs more than $100 they will only cover the cost? Why only cover the $50 in that case?

You are probably right....getting 3rd party insurance would be the way to go...but given the cost of insuring to the US...there is no excuse for that type of charge if they are not willing to go ahead and provide full coverage. An envelope that costs me 65 cents to send airmail, costs me MINIMUM $9.50 to insure to the US. That is a hefty hike for not REALLY giving you insurance, don't you think?

Jaqui

[amberwoodottawa]

You are 100% right!

I started to add some comments and went off on another tangent, another rant. Basically here is what I feel:

We (Canadians) are a bunch of dumb, patient and accepting Canuks who bitch in forums and and on talk radio but do little about it. We are jerked around by monolpolies like banks, oil companies, CP, Bell Cda and the likes of them.

Our fellow friends across the great 49th dont sit on their laurels. They change what they dont like. They even vote out a Governor that was just voted in.

Perhaps our disadvantage is living in such a vast country with so few people inbetween. We cant congregate the "masses" so to speak.

I have a feeling that through the PS forum, we are slowly discovering that CP discounts dont, for the most part exist, and that their insurance coverage is not really insurance coverage. That someone spending $120,000 per year with CP is getting almost the same discount and no better service than someone spending $5,000 per year.

I have been a member of some pretty powerful international associations and groups and it is possible and in fact likely to be beneficial to us, that one be formed out of the ranks of the members of eBay.ca PSers.

It is no easy task to set it up and run and participation would go well beyond chatting in this forum. I see a group of people and businesses representing a broad sector of Canadian business and this group would likely become the first e-commerce buisness association in Canada ("E-ComBAC").

It would not have to be limited to eBay members either but unite all business actively involved in promoting business through the internet.

It would become a Buying Group for the purpose of negotiating reduced services and products for its members and be politically active to ensure legislation and parliamentary bills being passed protected our interests.

What do you think?

Malcolm

[muminlaw]

Malcolm, I'm in! I won't be much practical help ... I'm one of those seniors that "real" business people think of as "cute", but revenue canada still accepts my taxes (and gets upset if they arrive late) so I might have a half voice anyway!

Re CP insurance, in the antiques and collectibles field cost equals replacement value and replacement value is what the item last sold at, that is my price realized! I haven't had a postal loss for a long time, but that's how it worked last time, with no arguments.

Glenda