6 Objections to Product and Shipping Protection (+ Why They Don’t Hold Up)

Product and shipping protection aren’t just another add-on for ecommerce merchants. When properly implemented, they can save merchants money and boost revenue. One of our merchant partners, Boutique Rugs, reduced annual shipping costs by $1.5 million and saw revenue increase by $60,000 in three months with both product and shipping protection.

Still, some merchants have doubts when it comes to implementing new value-added services. In our experience, that’s largely because they’re unfamiliar with how the services work or the value they can bring.

Let this article reassure you. We’ve pulled together six common concerns about product and shipping protection, along with the truth about these objections.

1. “My team is too busy to implement protection services.”

Your teams already have long to-do lists, and the last thing they want is to reprioritize tasks or radically alter project timelines. Naturally, they may be worried about product and shipping protection creating more work.

Our merchant resources make it simple for you to launch product and shipping protection. Here’s how Extend makes your team members’ lives much easier.

Minimal to no burden on developers

As an API-first solution, Extend either eliminates or drastically reduces the need for in-house development.

Shopify and BigCommerce merchants can quickly “plug in” the Extend app to their ecommerce stores. Extend’s development team takes it from there, completing and launching the integration within two to three weeks (typically).

For Ryan Pamplin, CEO and co-founder of Shopify merchant BlendJet, the integration only took a few days. “It was just a matter of putting some code in our theme,” he said.

Asset-creation support for marketing teams

Extend saves your marketing team time by helping design co-branded advertising assets that drive sales.

Partnering with Extend is a win-win, with both merchants and Extend taking a share of each sale. That’s why program-centric assets for in-store, website, email, social media, and more are so important.

And after years of A/B testing our assets, we know what works.

In fact, when one Extend merchant in the wearable technology space needed to improve buyer confidence at checkout, they asked Extend to design co-branded Facebook and Instagram ads highlighting the benefits of product protection. The result? Customer acquisition costs were 10% lower than the brand’s benchmark.

2. “Protection offers might interfere with our user experience.”

The most important buttons for an ecommerce leader are “Add to Cart” and “Check Out.” You and your team have worked hard to create product pages that guide site visitors to these buttons, and you don’t want new offers to get in the way.

Rest assured, Extend offer placements don’t interfere with the experience that leads to clicks on these buttons. We provide customizable offer placements that match the natural, intuitive extension of the ecommerce store.

Here are the on-site offer placements for Extend Product and Shipping Protection that deliver the most merchant value.

The PDP offer

The first Extend offer placement is on the product description page (PDP). The offer can sit just after the language containing the product’s value proposition and before the “Add to Cart” button.

Extend founder and CEO Woodrow Levin isn’t surprised that ecommerce titans like Amazon, Best Buy, and Wayfair include warranty offerings on their PDPs. These players have “seen the data that tells them that offering warranties can avoid that empty shopping cart,” he told PYMNTS.

Extend’s merchant partners have PDP data, too. One of them, Boogie Board, saw a 29% increase in conversions after launching Extend on their PDPs and elsewhere.

The pop-up modal

Merchants use pop-ups to announce promotions and encourage mailing list signups. Why not also use them to promote product and shipping protection?

Of the three Extend offer placements, the pop-up modal is the biggest driver of protection service attachment. Extend merchant Felix Gray reported a 200% increase in attach rate after adding the modal.

These modals are customizable, so they can align seamlessly with each merchant’s site design. Extend’s in-house design team will put together modal mock-ups and recommend a cadence for their placement in the sales funnel.

The cart offer

The cart offer appears to bottom-of-funnel shoppers. It’s the final reminder to attach product or shipping protection before checkout.

This offer takes up the least real estate and doesn’t require a shopper to exit the checkout portal. The experience of adding protection is seamless.

3. “I don’t want to impact my brand’s reputation.”

Many factors can tarnish your brand’s reputation: poor customer service, too many clicks at checkout, or limited payment options. Some merchants add product protection to the list. Why? Customers might mistakenly think the offers signal cheap, easily breakable products.

While some consumers have this mindset, most look at product protection as a safeguard against accidents. A dropped tablet, a pet accident, or spilled wine — these mishaps can ruin the most expensive, durable products.

Take Apple, one of the most valuable companies in the world. They offer AppleCare, and it enhances their brand because it offers consumers peace of mind. A cracked screen doesn’t mean paying full price for a new phone. Plus, the white-glove experience of getting the replacement phone makes the customer feel like it’s all about them.

In a survey of product protection buyers, we learned what peace of mind looks like to them. Here’s what they told us:

Adding extra protection seemed like the smart thing to do because the purchase was a large one.
I liked the benefits of Extend, including fast replacements or repairs and malfunction protection.
The protection was convenient to purchase.
I save on unexpected costs.
The price of Extend was fair.
I’ve had a product like this break before.

Bottom line: Product protection turns a negative experience (product damage) into a brand-building experience.

4. “Replacing the damaged or lost item ourselves is easier.”

You want to keep your customers happy, so it might seem like the best approach is to ship a replacement product yourself if a customer reports damage to the one they ordered.

Sure, this approach gives you control, but is it sustainable? For many merchants, retail profit margins are already thin. Even worse, Insider Intelligence estimated back at the beginning of 2023 that retail returns would hit $627.34 billion by the end of the year, up 2.2% from 2022. Not all of these returns are the result of product damage, but their costs make thin margins even thinner.

The point is: every opportunity a merchant has to pad its margins can help offset costly product repairs and replacements. Merchants pay nothing to become Extend partners, and a portion of every sale goes to the merchant.

Revenue sharing can increase your average order value (AOV) and, in turn, your gross profit, too. With healthier profits, you’ll have more money to spend on customer acquisition.

5. “We’ll make more money if we offer our own protection.”

Some merchants want to develop a revenue-generating product protection program of their own — until they discover the cost of offering it. Extend allows you to make money from offering product protection while taking the two biggest costs off your plate.

Compliance

Merchants wanting to offer their own product protection need to know about the patchwork of state regulatory requirements that service contract providers must comply with. In some states, these include licensing requirements, filing and approval of the content of service contracts, and other requirements.

Retailers that want to sell service contracts or product protection need to assess the regulatory landscape in every state where they do business. Navigating each state’s regulatory process requires industry expertise and is time-consuming and expensive.

Extend has done all the heavy lifting already, allowing you to sell protection with minimal licensing requirements when you plug our platform into your ecommerce store.

Customer support teams

When products get lost during delivery or damaged during daily use, customers will call or email to file a claim. Be ready to manage claim redemptions and field any questions concerning them. You’ll either need to hire, train, and manage support personnel, or build a software solution that automates the process. Both options sap financial resources.

If you can’t offer high-quality support throughout the claims process, you risk losing your shoppers’ loyalty. More than one-fourth of respondents to PwC’s 2022 Customer Loyalty Survey said they stopped using or buying from a business that year because of bad experiences. “Products or services and/or customer service” were mainly behind those bad experiences.

Keep your shoppers happy by letting Extend handle the claims process. Our platform lets your customers file claims online 24/7 using only their email address or order number, and our virtual assistant, Kaley, processes 94% of claims in 90 seconds or less. A successful resolution is either a replacement or repair. If a customer needs to speak to a person, they can do that, too.

No added labor costs, and there’s minimal risk of customer frustration. Not to mention, the quality of Extend’s customer support will make your brand look good.

6. “Value-added services are too costly for our consumers.”

Inflation is straining consumer budgets. In this economic climate, you might be wary of adding a service if it raises the price at checkout.

At Extend, we keep consumers’ needs top of mind to make sure we’re creating services they value, even in this market. Product and shipping protection meet the top five requirements respondents shared in AmTrust Financial’s Warranty Survey:

“Resolved quickly.” Online assistant Kaley processes most claims in a matter of seconds.
“No deductible.” Consumers only pay the protection price.
“Certified.” Extend has the required licenses necessary to provide expert service on approved claims.
“Reimbursement.” For approved claims, Extend covers the cost of a replacement or repair.
“Online process.” Consumers buy protection and resolve claims online.

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When it comes to pricing, our data science team has found the “sweet spot” for each product category — prices that maximize revenue without sacrificing attach rates. We also work with merchants to find pricing levels that best suit their business goals.

Impress customers and generate revenue with Extend Product and Shipping Protection

Extend Product and Shipping Protection offer a win-win situation for merchants — no costs, total profits, and protection for customers’ product damage and shipping issues. We realize we’re biased, but it’s hard to argue with these benefits!