OAImages Blog

There was a discussion on patch-l on the proposed USPS rate increase.  

Nothing has been approved yet, and current media reports disagree with this published rate case, but it does promise changes that will result in significant increase in shipping costs for those who sell patches online.    It was reported that patches would be treated as “parcels” and subject to that higher rate, regardless of weight, if the package was not thin enough to pass through the Postal Service’s sorting machines.  These were topped only by the even more significant proposed changes in international shipping costs

In a related topic Chris Jensen of Streamwood, Inc. posted a message about how worthless the USPS’ insurance is, especially when shipping outside of the US.   With his permission, I share what he wrote:

With the new proposed mail rates, If you take the base parcel rate of $1.00 proposed for post office, add in tracking, and add in $100 of insurance coverage (REAL insurance, that pays off quickly….. not just “feel-good” insurance, like the post office), the delivery cost difference between the post office and UPS is getting much closer. If you want to send a 1 pound package at the post office vs. the UPS rates, its about a wash. I have all but abandoned the use of the post office for packages over one pound (unless I am using media mail for collecting guide books) ….. substituting UPS for all of my packages of merchandise other than books.

As far as the International Rates are concerned, this kind of rate increase is just about going to put the thumb screws on the sellers of inexpensive items on ebay to international addresses. Presently, the international rates for Fedex and UPS are insanely high priced, and the only real alternative was the USPS.

What you need to also remember is that with USPS that when you buy insurance on an international shipment it has a very serious flaw. Here’s a very real scenario - You sell a $1000 patch to some collector in the UK. He sends you money via Paypal. You receive confirmation of the money in your account, and pack and ship the item to the buyer in the UK via U.S. Postal Service.

To avoid loss with this shipment, you send it insured for $1000, which requires you to send the package via REGISTERED MAIL. To make sure that the patch is not damaged, you fasten it in between two pieces of card stock and put it in a padded bubble mailer….. total weight 3 ounces. This costs $2.55 for postage. Then add to it the cost of registered mail for foreign shipments of $7.90. Add in insurance cost for $1000 of coverage of $11.15. (note, the maximum insurance you can buy going to the UK is $857, and that only parcel post packages can be insured….. which slows down delivery). Then to make sure you have proof of delivery, you ask for a return receipt on this foreign shipment….. that is $1.85 more.

Total cost of this shipment to the UK of your well-packaged patch is now $23.45. Now, let’s say that your customer in the UK claims that he never got the package and files for a return of his $1000 from Paypal….. and gets it after 2-3 weeks. Paypal dings your account immediately, and now the odyssey begins.

You then go to the post office and file a claim, and after a long and deliberate paper shuffle at the post office you are told the following….. the post office does not consider that a package is lost for 30+ days, and in the case of parcel post, they do not even claim that they would deliver it to the UK for 4-6 weeks…… come back in a few more weeks.

You come back in 4-6 weeks and file a claim, and after the legally allowed 6 MONTHS to respond (!), the post office declares,

“Yep, the package never arrived in the UK. But, we are sure that your package got on a plane leaving for the UK, therefore we, the US Post Office, did our job. It was lost somewhere out of our control, and therefore we are not responsible for it. Your claim for $1000 is denied.”

Then, let’s consider that you have proof that your local postmaster is sleeping with the senator’s wife and he magically approves your claim, and ignores that internal form (that you never saw anyway) that shows your parcel got on that plane in Atlanta to go to the UK …… and surprise (!), he says that the post office is going to pay your claim up to the max allowable for foreign shipments. Here is what would then happen……

“YOU WILL GET A CHECK FROM THE US POST OFFICE FOR $61.28!!!!!”.

THAT IS THE MAXIMUM ALLOWED FOR INSURANCE COVERAGE PAYOUTS ON MERCHANDISE ON YOUR UK PARCEL POST SHIPMENT. THE $61.28 CHECK ARRIVES AFTER 6 MONTHS, THAT COULD ACTUALLY BE OPTIMISTIC, BECAUSE THE POST OFFICE HAS UP TO 6 MONTHS AFTER A CLAIM IS MADE TO ACTUALLY MAKE A DECISION ON THE LOST PACKAGE PAYMENT….. SO THE TOTAL TIME BETWEEN THE TIME THE PARCEL WAS MAILED, AND WHEN THE $61.28 CHECK ARRIVES COULD ACTUALLY BE OVER 7 MONTHS BECAUSE THE POST OFFICE DOES NOT EVEN CONSIDER THE PARCEL “LOST” UNTIL IT HAS BEEN MISSING AT LEAST 30 DAYS.

Just remember, that on international shipments via USPS, the post office is only insuring that the package or letter is delivered to the exit point from the USA, not that the package actually gets safely to the addressee in the other country.

In this example, you bought and paid for $1000 worth of insurance, yet the most you will be able to get back is $61.28… if you’re lucky and only after several months’ of struggle.   Nevermind the possibility of the USPS completely denying the claim unless you can provide sufficient proof of the item’s value.   That they agreed to insure it for that stated amount is NOT sufficient, as I know from experience.

This is a very good example of USPS ”insurance” being a very bad deal for the shipper.  It is also yet another example why many sellers, myself included, will no longer ship outside the United States.