For Seniors: How to Insure an eBay Package as the Auction Seller

Sometimes packages (and their contents) — even your eBay item — really do get damaged in the mail or misplaced during shipment. That’s what insurance is for. Although eBay doesn’t allow sellers to charge buyers for insurance, smart sellers still purchase insurance on expensive items, one-of-a-kind items, or very fragile items.

The major shippers all offer forms of insurance that’s fairly reasonably priced, so check out their rates on their Web sites. Pack carefully so your buyer gets what’s been paid for. Be mindful that shippers won’t make good on insurance claims if they suspect that you caused the damage by doing a lousy job of packing.

Don’t forget to read the details of the shipper’s insurance coverage. For example, many items on eBay are sold MIMB (Mint in Mint Box). True, the condition of the original box often has a bearing on the final value of the item inside, but the U.S. Postal Service insures only what is in the box. So, if you sold a Malibu Barbie mint in a mint box, USPS insures only the doll and not the original box.

Alternatively, when you’re selling on eBay in earnest, you can purchase your own parcel protection policy from a private insurer like U-PIC.com. When you use this type of insurance, combined with preprinted electronic postage, you no longer have to stand in line at the post office to have your insured package logged in by the clerk at the counter.

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You may not charge your buyer for insurance unless you are actually paying for insurance from a licensed third-party insurance company. Charging and not fulfilling insurance is a violation of state law.

However, consider offering your buyers the following at no cost to them:

  • On lower-priced items, refund the buyer’s money if the item is lost or damaged.

  • On some item, have a risk reserve. If you have more than one of the item you sold and the item is lost or destroyed, you can send the backup item as a replacement.

Insurance only protects you so much. Even though your buyer is not paying extra for the insurance, you are still responsible for making sure that the item arrives at the buyer’s door. Federal mail-order laws state that when an item is paid for, it must be delivered to the buyer within 30 days unless there has been an agreement between the buyer and the seller for other arrangements.

Delivery confirmation (DC) is useful when you try to collect insurance for an item that was never delivered or if the buyer says the item was never delivered. If your package gets lost in the mail for a few weeks, the delivery-confirmation number rarely acts as a tracking number and won’t reveal the location of your package until it’s delivered. But the DC can serve as proof from the Postal Service that the item was sent.

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