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!


{ 4 comments… read them below or add one }

Gordon April 27, 2012 at 5:53 pm

Who was the customer? You should publicly shame him.


King Frank May 31, 2012 at 6:52 pm

I seriously considered that but I also thought about how that would help me (he could sue me for it). The fact is that I will never get my money back unless the guy repents one day. I have a link to his username on eBay and I saw that he bought a $700 watch the other day. This is after stealing from my family. Don’t worry though. There is a God and if he doesn’t pay in this life he will pay. Besides I stole things when I was young so I’m likely just paying it back right now.


Parlen August 24, 2012 at 7:33 pm

Thank you so much for making this link aabalivle! I sell on Etsy and usually have no problem shipping through PayPal from the transactions details page but during the holiday season, I have orders going out that were placed several weeks ago. Once they are two weeks old, there is no option to print them from the PayPal transaction. I have also used their Multi-Order shipping tool but when it didn’t work yesterday, I called them. Their customer service representative would not tell me how to get to this page. I knew it was there from when I sold on eBay but had lost the link when I got a new computer. I can’t believe they refused to tell me how to get to that page! But you did, so thank you so much!


King Frank November 25, 2012 at 8:08 am

It doesn’t benefit the USPS to help you make a claim. I’m glad some of my information was helpful for you.


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