With the online shopping boom, porch piracy is on the rise.
Nearly 50 million Americans have fallen victim to package theft in the past year alone, resulting in an alarming 260 million stolen packages and an estimated annual loss of $19.5 billion.
When it comes to ecommerce, there is a potential liability gap between the delivery of a package and the consumer retrieving it. This can make consumers feel uneasy, leading them to seek out shipping insurance for added peace of mind. However, not all “package protection” offerings are legitimate insurance options. In fact, there has been a rise in unauthorized online offerings that falsely advertise themselves as insurance. This has resulted in many merchants unintentionally falling victim to fraud by offering these fake options at checkout. It's important to be aware of these fraudulent offerings and to do your research before selecting a package protection option.
Legit options, like Route, exist and are backed by licensed insurance providers. However, a growing number of unauthorized providers use misleading labels like “shipping warranty” or “delivery guarantee” to bypass state insurance regulations. These offerings often lack proper oversight, leaving consumers vulnerable to potential scams.
This issue has become so prominent that the Oklahoma Insurance Department issued an alert, signaling a nationwide need for attention. Route’s chief compliance officer also weighed in, detailing the problem for merchants in an op-ed originally published to Digital Insurance.
The main takeaway: “Package protection” that you’ve spent good money on may not protect anything. Be a savvy shopper and choose legitimate shipping protection to safeguard your purchases.