Just What is the Value of Insuring Shipments?

The Shearing of the Sheep

A look at life's realities.

A couple of days ago I mailed 4 packages. 3 were of little consequence. I didn't even bother to insure them at all. The 4th package was insured for $1650 total value. It cost $60.40 to send that one 27 pound package. The insurance was $19.10, the postage was $40.80. In all that follows, please remember, that there's a lot of "He said. She said." and "Who shot John?" Obviously I wasn't there when the package was received. I wasn't there when it was taken to the Post Office for inspection. I wasn't there for the conversation between the postal official and the recipient of the package. The recipient relayed these conversations to me.

You would think that if you insured something and sent it off, if it got damaged in transit, you'd file a claim, there'd be an investigation, and you'd get your money. That's the theory behind paying the insurance. That's not the way it always works. In fact, it seldom works that way. Probably the only time it works that way is if the goods completely disappear in transit.

My package contained $1650.00 worth of shotguns I sold on an internet auction site. That was the $1567 auction price of the guns plus the freight. Naturally the first package with only $40 worth of shot shell reloading equipment arrived intact. As did the package with the empty original gun boxes. Also the third package, the empty carry case for the Winchester in its original box, arrived safely. But the box that held the actual Ruger Red Label and the Winchester 101 Diamond Grade didn't make it intact. The over/under shotguns were shipped broken down (barrels separate from stocks) and nestled in a velvet lined, padded, locked, hard sided airline case. This is an airline case which made at least 3 cross country round trips without incident. The case with the guns was even packed in the box that the case came in. Yet upon arrival the wood fore ends of both guns were cracked. There must have been an exceedingly severe blow to just the right spot to have damaged such well packed items with so little damage to the outside of the box. It makes one think.

The Post Office puts a bright blue "Insured" label on insured packages. If an unhappy employee wishes to get back at his employer as that package pass through his hands, might he not give it a good slam? The other 3 packages (not nearly as well protected) arrived unscathed. Only the package clearly marked "Insured" was damaged. The airlines used to make you attach a bright red "firearms" tag to your case when you checked a gun as baggage. It was required that the gun be unloaded when checked. An unloaded firearm is about as non-hazardous an item as you can think of. But when you attach a red tag to the box, you invite theft. A stolen gun will probably ultimately wind up in the hands of a criminal which makes a piece of luggage with a red tag on it becomes a very dangerous item indeed. A good example of how burocracy can turn something harmless into something deadly. Just a thought.

When the buyer called to say the guns arrived damaged, my first fleeting thought was, "My God, I wonder if they think I shipped damaged merchandise?" With relief, my next thought, and what I said to the buyer was, "No problem, we're fully insured." How naive on my part. His answer, "Sure, we'll just file a claim." showed he was just as green. The damage, while it could be repaired by $2 worth of glue and a couple hours of time, would cost over $1000 for factory replacement wood. The repair would have to be custom work for the 101 as Winchester Olin is out of business.

The long and the short is, if the package had never arrived, the claim would have been paid in full. Unfortunately, when there's a partial loss due to damage, the carriers know all too well that the claim is open to all kinds of estimation, negotiation and downright fraud. Naturally, the carrier's response it a slow drawn out process which quickly weeds out all but the largest, most legitimate, and most easily proved claims.

The rest of the claims, like ours, will be put to death by euthanasia to avoid a long, slow, lingering death. If we'd have filed a claim, we'd have had to give the damaged fore ends to the Post Office for the local office to send to a national claims center. The clerk told the buyer that most likely the claim would be denied after about a 6 month investigation because while there was some damage to the box, it did not seem to be enough to damage the merchandise inside. Nothing encourages you to file a report like the person taking the report telling you that you are wasting your time.

A six month investigation would mean that the buyer would have his money tied up for 6 months in 2 guns he could not sell with parts sitting at the Post Office national claims center. Then in 6 months the Post Office would deny the claim and send the broken parts back and the buyer would be in the same position he is now. What we did was this: The buyer asked his customers if they wanted to take the damaged but repairable guns for $100 (ea) off the previously agreed price. The buyer and I split the $200, ($85 Buyer, $115 Seller) and the deals were closed that day. Everyone paid a little more for a little less than they wanted, but was satisfied with a reasonable deal in the end. Except the Postal Service. They pocketed the $19.10 insurance fee.

The buyer could have blown up at me, accused me of shipping damaged merchandise and filed the insurance claim or paid to ship the guns back to me for a refund. Either way, he loses. I could have blown up and accused the buyers of trying to cheat me, faking the damage, and recounting a non existent conversation with the postal clerk. They would then have carefully packed my guns in nothing but a couple of garbage bags and mailed them back to me. I lose.

The way both the buyer and seller dealt with this unfortunate damage was wisest and the best for both of them. Take a small, bad tasting lump, while still making money on the deal. Let it go, and concentrate on the next deal. Hopefully a smoother one.

The real questions are: First, do I deal with this buyer again? From all he says, he's eager to deal with me again. Which actually has me somewhat concerned. Second, do I ship insured goods with the USPS again. It's the insurance label on the package which has me concerned, not the carrier. I'm sure (and I mean I'm really sure) that USPS, UPS, Fedex, DHL and any other carrier are about the same in this area.

I think the solution is this: I'll deal with the buyer again, but keep him on a short leash. I still have a number of guns for sale. I'll see if he'll buy one of the less expensive ones. Then I'll still ship it USPS, but I'll take it to the Post Office packed but unsealed. I'll show it undamaged to the Postmaster at my station. If it gets damaged on the way down again, I won't care about the insurance loss. I'll let the Postal Inspectors follow the next (empty but heavily insured) package to find out who's putting a burr under my blanket. - © 2007The Chewed End All rights reserved.