What is Shipping Protection? (+ See How it Benefits Merchants and Their Consumers)

A delivery driver for a major shipping carrier was discovered last year to have dumped more than 300 boxes in a ravine in Alabama. 

And it wasn’t a first; he similarly dumped packages at least six times in total.

While this kind of ship-stopping event doesn’t happen every day, package loss, theft, and damage are a common occurrence. Unfortunately, customers are more likely to blame the merchant than the shipping carrier — or at least expect the merchant to make it right. 

Discover Extend Shipping Protection offering.

Post-covid consumers are blending their in-store and online shopping in ways the industry is still trying to understand. But the bottom line is that we have to think about the customer journey in an integrated way, and consider the experience all the way from product delivery and beyond.

What is shipping protection?

Delivery is the next frontier of the customer experience, but it’s also a cost center that can make or break your margins.

The critical moment of brand engagement that happens when customers receive their product is very difficult, if not impossible, for merchants to control.

However, saving the customer relationship in the event of a delivery mishap takes time and money. That’s why thousands of merchants leverage shipping protection.

Shipping protection or parcel protection, which is sometimes offered in the form of shipping insurance, protects against financial loss in the event that a package is lost, damaged, or stolen before the customer receives it. It helps to mitigate the many impacts of delivery problems on your bottom line. 

Sometimes when people talk about shipping protection, they’re talking about protection purchased by the seller. This option can help offset some of your financial loss, but you still have to invest a lot of internal time and effort. 

Submitting a claim can be onerous, and there’s still a good chance it’ll be denied. Plus, this protection doesn’t include the time and cost it’ll take to make things right with your customer.

A more cost-effective and efficient option is enabling customers to purchase their own shipping protection at checkout. This saves you time by taking claim submission, approval, and resolution out of your hands. 

Benefits of shipping protection 

Shipping issues disrupt your customers’ experience and siphon off valuable people and resources. It takes time for your customer support team to make things right with the customer, and then you have to absorb the cost of a replacement product and its related shipping costs.

Offering your buyers a shipping protection solution can give you two big advantages. 

• When something goes wrong, customers can easily file claims with your third-party protection platform, giving valuable time back to support teams. 
• It also outsources and offsets the cost of replacing the necessary products for approved claims.
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Let’s break down the four main benefits of shipping protection.

1. Provide customers with peace of mind

Particularly after both supply- and demand-side logistics shake-ups in the last several years, customers are sensitive to the frequency of package delivery issues.

Give them the peace of mind that shipping protection will protect their investment so they can feel comfortable purchasing even fragile or big-ticket items online.

2. Reduce costs associated with issue resolution

Your customer support staff are already spending time resolving shipping issues — and it could be costing you more money than you think. 

Logistics platform provider project44 reports that WISMO calls — customer calls asking, “Where is my order?” — commonly make up about half of your customer service call volume and can cost $5 each to resolve.

Customer calls asking “Where is my order?” commonly make up of about half of your customer service call volume and can cost $5 each to resolve.

With the right shipping protection provider you can offload much of that call volume, giving your service reps time for other pressing issues. 

Plus, you’ll eliminate the need to absorb the cost of replacing these products. That’s all covered by the shipping protection your customer purchased. 

3. Improve the customer service experience

Some shipping protection providers make people jump through hoops to report a missing or damaged package — like requiring copies of shipping labels, photographs of damage, or even police reports.  

Instead, look for a provider that makes it easy for your customer to submit claims 24 hours a day, 7 days a week, and puts a new product in your customers’ hands as soon as possible. 

For customers who purchase shipping protection, delivery mishaps will be covered — providing a simple and hassle-free way to turn potential detractors into lifelong brand advocates. 

4. Protect your brand

This is a make-or-break moment: 

If a customer’s package is lost, stolen, or damaged, you’re already on shaky ground when it comes to customer experience — no matter who’s to blame.

A great customer service experience here could create a lifelong advocate. A poor experience, and you may have lost them forever. 

As this report states: “The risk of not meeting the [delivery] demands of consumers stretches beyond missing out on additional revenue. Failure to deliver on-time and in-full orders to customers could also lead to brand damage and the loss of loyal customers, and make it difficult to convert the business of new customers.”

"Failure to deliver on-time and in-full orders to customers could also lead to brand damage and the loss of loyal customers."

How shipping protection enhances the post-purchase experience

“Ecommerce success depends on the last mile,” EY experts write in this Harvard Business Review article from mid-2021. “Even the most advanced ecommerce capabilities can’t conceal the importance of fulfillment, as delivery becomes a cornerstone of the experience.”

"Ecommerce success depends on the last mile."

Ultimately, offering a shipping protection solution gives you an opportunity to correct a poor customer experience at little to no additional cost to your business.

When shoppers purchase shipping protection, you can better control the customer journey by ensuring a simple, hassle-free way to resolve any potential issues quickly and turn potentially negative brand experiences into positive ones.

All those benefits work together to deliver a positive impact to your profit margins, helping you build a resilient business. 

Extend's Shipping Protection offering leverages the same digitally native, customer-first technology as its Product Protection to cover items from the time they leave your warehouse until they reach your shopper’s doorstep. The customer claims process is simple and hassle-free, and eliminates the need for your business to absorb the cost of replacement products when claims are approved. 

Learn more about how Extend Shipping Protection can help shore up your margins and create a resilient business moving forward.