How Not to Handle a USPS Insurance Claim

This is a true story which I hope you can learn from.

I lost $500 because I made a huge mistake handling an insurance claim on an item I sold.

First of all, if you sell something of value, you will want to insure the item via USPS. Every once in a while, a buyer will say he didn’t receive it and demand his money back. Because you have insurance, neither of you should lose any money… if you handle the claim correctly.

Back to my story.

I sold a high-priced item to a customer across the country. It was insured, but the item was lost and never made it to the customer. Immediately, I allowed the buyer to make a claim on the insurance figuring this was his insurance and his claim… I should have nothing more to do with the situation.

Because I was paid for the item with PayPal, the buyer also made a claim with them. I wrote PayPal and sent proof that he was the recipient of the insurance claim, so I shouldn’t have to refund the money.

PayPal, being overly customer-friendly, didn’t care and immediately gave him the money back. Then, a few days later, USPS fulfilled his claim. He walked away with a $500 profit and I was out a $500 item.

I re-opened my complaint with the proof of insurance payment. I was ignored.

The lesson in this?

1. Always handle insurance claims yourself making you the recipient and not the buyer, if possible.

2. Remember that PayPal doesn’t care if there’s insurance.  Ultimately, they care more about the customer than the seller, and will always err on their side over yours.

Hopefully that $500 loss of mine will prevent thousands of you from succumbing to the same fate!


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