Warning to those who ship equipment by UPS or FedEx

<p>A word of warning to those who ship expensive equipment by way of UPS or FedEx.<br>

I have an expensive Nikon 200-400 lens that has been having some autofocus issues, so I thought I would send it to Nikon’s eastern repair facility to have them check out the autofocus. I planned to insure the lens for loss or damage through UPS for $5,000, which is what I paid for it when I purchased it from an individual several years ago. Also, $5,000 looks like a reasonable used value for a lens in the condition that mine is in—at least, I don’t think I would have any problem selling mine on the used market for $5,000.<br>

Despite the fact that I have been shipping things through UPS and FedEx for many years, I decided to check—for the first time in all the years I have been using these shippers—on the policies of UPS and FedEx to see what the procedure is for payment in the event of loss. This is what I found out: No matter where you set the value of the item you are shipping and no matter how much money you invest in ‘insurance’ for that item, you will receive <em>nothing</em> in compensation for the item if it is lost or destroyed if you do not have the original receipt for the item that shows how much <em>you</em> paid for it. I spoke with representatives of UPS and FedEx on the phone today, and this is the policy for both of them. I asked representatives from both companies this question: If I could prove that the market value for a lens that I want to ship is $5,000—perhaps I had it appraised by a reliable appraiser just before it was shipped—would that compensate for the absence of a receipt showing what I had paid for it? The answer in both cases was “NO. If you are unable to provide an original receipt, you will not receive any compensation.”<br>

For what it’s worth, here is the way UPS’s agreement is worded: “UPS will pay the lesser of purchase or replacement costs, up to the declared value.” Presumably, their view is that without the “purchase” cost, they cannot determine which is “the lesser.” The FedEx wording seems more generous and even mentions appraisals, but the FedEx customer service representative gave the same answer to my question about determining the market value of the item (She said, “We <em>start</em> with the amount you paid for the item.”) so I don’t know what they have in mind here: “All documentation related to the proof of value (copy of original invoice from vendor or supplier, copy of retail invoice or receipt, final confirmation screen if online order with proof of payment, itemized repair invoice or statement of non-repair, appraisals, expense statement, or any other applicable documentation.)” [both of these statements come from their respective websites.]<br>

In my case I don’t seem to have a receipt of any kind for the purchase of the Nikon 200-400; however, I have a copy of my letter to the seller in which I enclosed the cashier’s check for the purchase, but unfortunately, I don’t mention the amount of the sale in the letter. My bank is going to send me a copy of the cashier’s check to this individual, and I hope that I wrote that it was for the purchase of a 200-400, but who knows whether this would be enough to base a claim on in the event of a loss. I have checked, and I do have receipts for everything that I have purchased from a brick and mortar store or an online retailer.<br>

The thing that irritates me the most about this is that in all the years that I have been shipping packages through UPS and FedEx, I have never been told that the insurance I was purchasing would only cover what I paid for the item and that I would need my original receipt to prove what that amount was if I were to receive any compensation. The only thing that I have <em>ever</em> been asked is: “What is the value of the item?” Just imagine how much money UPS and FedEx has taken in over the years for ‘insurance’ that would prove useless in the event of a loss because the individuals buying the coverage did not know that they had to have their original receipt.<br>

Three final notes: (1) It’s possible that the U.S. Postal Service shipping insurance does not require an original receipt. (2) I wrote to Rand Insurance, which handles the NANPA photo equipment insurance, and asked them whether my NANPA insurance would cover a piece of equipment if it were lost in shipment, and I just received this reply: “Yes, your policy would cover the lens in transit if it is scheduled on your policy.” (3) Finally, I would be interested in hearing whether anyone has ever been notified of the necessity of having an original receipt when they have shipped something through either of these companies.</p>

<p>I ship exclusively via USPS. And stay away from Fedex / UPS - mostly for cost reasons - To my knowledge - USPS does not require proof of purchase price - but they do require that the package be retained - and that the claim come from the sender - not the purchaser / receiver.</p>

<p>Fortunately - I've never had to use the insurance feature.</p>

<p>Dave</p>

 

<p>Well, maybe that suggests there is a good reason to have your equipment insured in any case. Normal insurance will cover the loss, so you don't really need the FedEx or UPS insurance anyway.</p>

<p>It would probably become a legal issue: if no consumer education sign was in plain sight, stating the policy of "Only a original receipt, et al.," is needed for any insurance claim, the case would probably go against the shipper. The shipper takes money for insurance, then balks at paying....not the best way to go before a judge.</p>

<p> </p>

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<p>To my knowledge - USPS does not require proof of purchase price</p>

 

</blockquote>

<p>Maybe not but good luck shipping something worth $5000 with USPS....</p>

 

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<p>and that the claim come from the sender - not the purchaser / receiver</p>

 

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<p>AFAIK, so does UPS<br /> To be honest though, while that sucks, the same is true for my homeowners insurance. I think it is a way to protect against scammers.....</p>

<p>I use UPS daily and have never had to produce a receipt for lost parcels (I have had a few over the years) although the claims have never exceeded $1000. In any case, per UPS's site here:<br /> <a href="http://www.ups.com/content/us/en/resources/service/claims/hlp/lost_process.html">http://www.ups.com/content/us/en/resources/service/claims/hlp/lost_process.html</a><br /> <em>"the shipper supplies UPS with documentation that shows the lesser of the actual purchase cost or replacement cost, up to the declared value...Requested documentation may include original invoices, purchase orders, proof of shipment, or other information required by UPS<strong>"</strong></em></p>

<p>This doesn't seem unreasonable. Certainly it would not be too difficult for anyone with a computer to collect/generate the required documentation.</p>

<p>John, are you saying that homeowner's or renter's insurance will cover an item you own when lost by a shipping company?</p>

<p>Cliff Notes?</p>

<p>I'm not reading all that.</p>

<p>Worse case, your renter insurance, or homeowners insurance will cover a loss like this if UPS doesn't cover it. And I don't think this thread belongs in the Nikon forum as it deals with shipping insurance, not a Nikon question.</p>

Neither UPS or Fedex offer 'insurance'. You 'declare the value' of an item. And yes, if you have a loss you have to

prove the value of that item. the number of individuals and companies that file false claims with both on daily basis is

staggering, thus One of the major reasons for their higher costs. However, their level service is unmatched by any

company, especially the USPS. In fact, no other shipper in the world can match their level of performance or

dedication to excellence. Do they make mistakes? Of course. It's how they deal with those mistakes that make them

stand out from all the rest.

Don't rely on homeowner's/renter's insurance. Get what State Farm calls a "personal articles policy".

<p>I have the 200-400VR as well. Did you first thoroughly clean your lens mount, bayonet and contacts of all remnants of oxidation (highly recommend "DeOxIT" for this). If you do so there's a better than average chance you won't have to ship the lens to be repaired. Cheapest insurance of all.<br>

(Also a common Nikon AF issue going back at least to the F5. )</p>

<blockquote>

<p>This is what I found out: No matter where you set the value of the item you are shipping and no matter how much money you invest in ‘insurance’ for that item, you will receive <em>nothing</em> in compensation for the item if it is lost or destroyed if you do not have the original receipt for the item that shows how much <em>you</em> paid for it. </p>

</blockquote>

<p>This sounds completely fair.</p>

<p>Consider this purely fictional scenario. Joe Sleazebag buys a used lens in horrible condition for $1500. A new one costs $5000. UPS loses the lens. Joe Sleazebag claims that UPS owes him $5000. UPS says, "Wait a minute there, Joe Sleazebag! Show us proof that it was worth $5000." Joe Sleazebag goes away angry.</p>

<p>If you file a claim through your homeowner's insurance, you may want to factor in that your premiums may increase.</p>

<p>Plus - if you go through your homeowner's insurance - and try to switch insurance companies in a few years for a better deal - forget about it. Some insurance companies will no longer underwrite you if you have a single claim on your existing policy. </p>

<p>And just to make matters more interesting - homeowners will not typically cover a) business owned / used items (get a separate business policy) b) expensive one-off items - such as electronics / jewelery / etc... - unless each item is listed on the policy. My spouse had a ring stolen - fortunately we had it listed on the policy specifically - so it took only one call to get it replaced. </p>

<p>Dave</p>

 

<p>I don't know why anyone wold buy $5,000 of goods and not keep a receipt for insurance purposes (and even for a private sale I would ask for a receipt of some sort). There is a massive problem with people making claims for items they had never owned, and the most publicised are holiday makers claiming they dropped things like their (non-existent) £200 P&S down a cliff. As a result insurance requirements are getting ever-tighter over this side of the pond.<br>

With a consumer-grade lens the company (in UK, anyway) would probably pay up with reasonable evidence of ownership. When it comes to expensive items there are far too many variables as Dans suggests and you would likely need to jump through more hoops. </p>

<p>Fedex and UPS are in talks to amalgamate both companies forming a new carrier. This will trade under the name of FEDUPS.</p>

<p>How do they know what was in the package? I'd have thought that would have been a bigger concern than having a receipt. Anyone can write themselves a receipt showing any value they want, especially for a private sale.</p>

<p>Plus I get equipment from Canon, Olympus, Sigma etc. for testing, sent via FedEx and UPS. Since they are the original vendors I doubt that they have a receipt for what they send, yet it's still insured!</p>

<p>Likewise, how do I show a receipt if I received a lens for Xmas or my birthday from my ... relative as a gift or by inheritance?</p>

<p>Sue, sue, sue!</p>

I'm not too sure what the contents of a box have to do with anything. I pay good money to insure a box for $5,000. You lose the box, you pay me the $5,000.

<p>I'd have thought they'd be more worried about damage claims than loss. It's hard to scam them by getting them to lose a package, but much easier to send a broken lens to someone and then claim that it was broken in shipment. Of course a receipt doesn't help much there either since it could have broken after you bought it and before you shipped it.</p>

<p>You've got a computer - make yourself a receipt!</p>

<p>I admit I have not read all the postings, but I have not had any problems withe USPS, I insure, with signature confirmation, that includes overseas packages.</p>

<p>USPS Insurance claims are covered under the Domestic Mailing Manual Section 609. A search of their website with "claim insurance" will probably reveal the correct page for a good start on researching their approach. <br /> http://pe.usps.com/text/dmm300/609.htm</p>

<p>Whether or not an insurance company requires a receipt as part of their claims practices is probably their internal decision. There are a few things they can and cannot do. They <strong>cannot</strong> write a "<strong>catastrophic</strong>" contract; this means that they have to be able to pay the benefits that they say they can pay. Check to see if the benefit was for a flat amount or a maximum amount (e.g. "up to $5000"). They also <strong>cannot</strong> write or carry out a <strong>profitable</strong> contract; they can pay out a great sum, but that sum cannot be genuinely profitable to the insured. These ideas are built into financial laws put into practice in the US and Canada after the Great Depression, in response to the consequences of unethical business transactions in the 1920s. Back then, it was common to use insurance contracts as a mechanism for betting.</p>

<p>The other two main principles include that the parties involved have to be <strong>interested</strong>; insurance used to be used by third parties in placing bets; the concept of an interested party is designed to prevent this. Also, the activity has to be <strong>predictable</strong>; it has to be an activity that is the result of human action or decision.</p>

<p>These principles of the fundamentals of insurance can provide an illuminating mechanism for evaluating just how intensely unethical and corrosive the financial industry has been, under its own standards, for the past couple of decades. For example, flash trading, in principle, may show a lack of interest. Placing a bet on a company is not the same as investing. The difference between betting and investing will be described by the concept of an interested party.</p>

<p>Whether or not they want a receipt will probably be related to establishing value (cp. catastrophic) and establishing interest. If you have the receipt, you are proving that the item was observably yours before you shipped. It is an easy way of proving that the contract is lawfully payable with one simple form of supporting evidence.</p>

<p>For James' hypothetical empty box, above, I would expect that he would receive $0 in return for his efforts. Maybe he would get the value of the box itself. Insuring the box for up to $5000 does not establish that amount ($5000) as the object's value. It establishes $5000 as the maximum amount to be paid.</p>

<p>Insurance is not an automatic payout to the maximum benefit. It is not lawful to use insurance as a mechanism for gambling. The terms of the insurance will be required to be spelled out either in a policy, or in some kind of certificate provided to the purchaser. Check your certificate. Read your contract.</p>

<p>When I started this thread, my intention was solely to warn people who ship expensive photo equipment about the necessity of having your original receipt for the item shipped, otherwise any money you invested in ‘insurance’ would be wasted. In phone conversations with UPS and FedEx agents whose job it is to deal with compensation for lost and damaged items, I was told that if the shipper is unable to provide a receipt that shows how much the shipper paid for the item, the shipper will receive <em>no</em> compensation for a lost item. It was not my intention to question the efficiency or reliability of UPS or FedEx. I have had extremely good luck with both of them over the years. I think that in all the years that I have been shipping with both of them, I only had a problem with one shipment that was misdirected and thus appeared to be ‘lost’ for about a month.</p>

<p>Looking at some of the comments, I get the impression that some people think that the dependence on the original receipt when determining compensation is perfectly reasonable and further that these companies have a right to set their policies as they see fit. I certainly agree with the second of these judgments, but I think that that also have a responsibility to tell their customers precisely what their policies are. They do not tell their customers that if they want to be eligible for any compensation with respect to the ‘insurance’ for which they are paying, they need to have an original receipt for the item they are shipping. <em>Every</em> time I have shipped an item with either of these companies, I have been asked: “What is the <em>value</em> of the item?” When the question of ‘insuring’ the item comes up, these clerks could just as easily ask: “How much did you pay for the item?” Obviously, there could also be a sign on the counter saying that the most that UPS/FedEx will compensate shippers for loss is the amount that the shipper paid for the item and that a receipt is required to establish that amount. How hard would it be to do that? Not hard at all, but then why don’t they do it?</p>

<p>With respect to the <em>reasonableness</em> of the policy of basing compensation on proof of how much the shipper paid for the item, there are clearly pros and cons. Everyone has no doubt noticed that when you ship a package with either of these companies, the clerks just take the shipper’s word for what is in the package; they don’t try to verify what is in the package—they don’t even seem to care. How can they not care? Presumably, they use the shipper’s receipt to tell them what was in the package—although this is obviously not foolproof from their point of view. [by the way, this is no longer true for items over a $1,000. About a month ago, I shipped a lens with UPS and insured it for $1,300, and the clerks actually opened the package and looked to make sure it contained what I said it contained, and then they repackaged it. I was told that from now on, they would inspect the contents of all packages insured for more than $1,000.]</p>

<p>Based on what was said to me on the phone when I talked to the representatives from these companies, it seems clear to me that the amount that is on the shipper’s receipt is the <em>maximum</em> amount of compensation that he/she will get, but—if I understood them correctly—the compensation might be less than that. Here’s how:</p>

<p>1. If you purchased a Leica camera <em>in the 1970s</em> for $1,000 and did not use it, then its current market value (since it is in mint condition) might be five times that much--$5k. If you sell it for $5k and it is lost in shipment, then the <em>most</em> that you will receive in compensation <em>if you kept your original receipt</em> is $1k—the amount on your receipt. (If you don’t have the receipt, you will receive nothing.)</p>

<p>2. If you purchased a mint 1970s Leica camera <em>a few months ago</em> and you paid $6k for it and it is lost when you try to ship it through UPS, you may not get $6k in compensation under certain circumstances even if you have your receipt. Recall the statement from the UPS web site: “UPS will pay the lesser of purchase or replacement costs, up to the declared value.” So if you insured the camera for a declared value of $6k, then UPS will compensate you for your “purchase” cost ($6k) or the “replacement” cost—whichever is lower. If you were over enthusiastic about the camera and paid $1k more than such cameras commonly cost on the open market, then you will receive the replacement cost of $5k.</p>

<p>So, is this a <em>reasonable</em> policy? If you don’t have a receipt, these companies will not pay anything. In effect, they are saying that they don’t care what the <em>value</em> of the item is—it could be higher or lower than what you paid for it, but the <em>maximum</em> that they will pay is what you can prove you paid for it. On the other hand, if you do have a receipt, and their investigations show that you paid more than the item was <em>actually worth</em>, then they will only pay what the item is actually worth. A cynic would say that they don’t care about the <em>value</em> of the item when it suits them not to (the first case), and the do care about the <em>value</em> of the item when it suits them (the second case). So is this reasonable? Is it fair to the customer?</p>

<p>One other person who commented suggested that these policies could be motivated by the threat of fraud. I don’t know how many types of fraud these companies face from their customers, nor do I know how serious the problem is for them, but it seems to me that this is somewhat tricky with respect to the loss of a package because once the customer hands the package over to one of these companies, the customer has no access to the package and so can’t cause it to be “lost.” If I put a brick in a package and claim that it is a lens worth $500—and the package is lost, then I could show my receipt and demand compensation. This would be morally despicable, but it would also be a terribly inefficient form of fraud, because the package might not be lost in a hundred attempts. Unless the shipper has an accomplice within UPS/FedEx who can make sure the package is “lost,” this would be a comically inept way to try to make money.</p>

<p>Roger:</p>

<p>I'd rather take my chances paying insurance for the value of the item and then following up in court afterwards if necessary than going without insurance.</p>

<p>I can certainly understand the view from the shipping company's perspective. The vast majority of people are honest and wouldn't try to commit fraud. That said, when you're dealing with millions of packages each year, having 99.9% of your customers be honest and upright still means that thousands of unscrupulous people are trying to rip you off.</p>

<p>I think the chances of a box being lost are extremely low. So I wouldn't pay money to insurance an empty box in the hopes of hitting pay day. That seems like a very high risk/low payout proposition to me.</p>

<p>On t the hand hand, there's an extremely good (almost 100%) chance of having a box delivered. If I shipped a broken item, I'd be reasonably sure that it would arrive broken, and then I could collect. Forcing me to have a receipt means that I can't just go to a garage sale and buy broken cameras to ship. I would have to forge receipts. Forcing me to commit more crimes to collect is probably a deterrent to people wanting to make an easy but dishonest buck.</p>

<p>In your example #1, if I sold an item for $5,000, and I have a buyer that has paid me that money and by losing or damaging my product I have lost $5,000, I think it would be fairly easy to file in small claims court and collect. I've paid to insure the item for $5,000. I have tangible proof that the shipping company has cost me $5,000 in hard cash. This isn't theoretical worth. I would have to refund $5,000. While going to court is never cut and dried, I have a hard time imaging a judge siding with a large corporation that damaged a consumer's product and then refuses to pay, after the consumer paid extra for insurance. Doesn't really matter what the company's policy is. Matters what the actual law is.</p>

<p>That said, it's probably prudent to take lots of photos of items before shipping so you can prove damages, if needed.</p>

<p>Eric</p>