E-commerce shipping & claims: what you need to know

For e-commerce retailers, damaged or lost parcels not only affect customer loyalty and your brand image but, in the big picture, also negatively impact sales and revenue. Additionally, e-commerce retailers have to bear the financial burden of replacing or reimbursing customers for their damaged or lost goods. Retailers who invest in the correct parcel protection and easy claims process are best prepared for unfortunate eventualities.

How does parcel protection work?

As retailers operate more internationally and ship higher volumes, the risk of something going wrong during transit increases. E-commerce retailers can rely on the standard coverage offered by carriers or protect their goods with additional parcel protection.

For most retailers, having more comprehensive shipping parcel protection is worthy for the lost, damaged, or stolen goods. The coverage a retailer will have for their parcels depends on the protection level they choose. Typically, it's for an amount based on their average order value.

Factors to consider when choosing shipping parcel protection

Not all shipping parcel protection is created equal, and understanding which factors matter most is crucial for making an informed choice. E-commerce retailers should consider

• coverage limits,
• cost,
• claim processing times, and
• ease of claim submission.

The benefits of shipping parcel protection vs. carrier coverage

Most carriers offer some insurance as part of their standard shipping services. However, this protection is often limited in its scope or only included in premium options. For example, there are often many restrictions regarding what items are compensated, the value of coverage is generally much lower, and returning or reshipping costs are usually not included.

One of the biggest drawbacks of carrier insurance is the slow processing of claims and reimbursements. In contrast, retailers who opt for additional shipping parcel protection benefit from more comprehensive coverage and higher claims value. And the processes for resolving disputes and paying out refunds are typically much faster and more straightforward.

“With our Claims Center, retailers can submit, track, and manage claims in a single location, covering all their shipments—whether delivered by Seven Senders or another carrier." — George Steele, Senior Product Manager

What are parcel protection & claims?

With parcel protection, retailers can file a claim if something goes wrong during transit. Whether a retailer is filing a claim via carrier coverage or with a parcel protection solution, the documents needed are generally the same.

Filing a claim requires the necessary shipping tracking information, proof that a shipment was damaged, documentation to prove the stated value, and evidence of the original pickup in the case of loss or theft.

However, each carrier has its own guidelines and procedures for filing claims, and most have deadlines for submitting a claim. Keeping track of each carrier's processes and cut-off dates requires a lot of time and effort from customer service teams.

Retailers with their own shipping parcel protection solution face a much easier and faster claims process. They can also count on higher reimbursements as additional shipping insurance covers more costs.

"We've streamlined the claims process so that retailers can submit a claim in under 30 seconds, following the same process no matter which carrier is used. Once a claim is submitted, our team takes care of everything, including all communication with the carrier." — George Steele, Senior Product Manager

Common reasons for denied claims and how to avoid them

One of the biggest frustrations for retailers is having claims denied. To increase the likelihood of a successful claim, it's essential to understand why claims are often rejected and how these issues can be avoided. Here are some of the most common reasons and best practices:

1. Insufficient Documentation

Claims are often denied due to missing or incomplete documentation, such as proof of damage or shipment tracking information.
Tip: Ensure you have all required documents on hand, including tracking numbers, damaged photos, and proof of value. Establish an internal checklist to streamline the collection process.

2. Delayed Claims Submission

Each carrier has specific deadlines for submitting claims, and missing these deadlines is a common reason for denial.
Tip: Create a schedule that outlines each carrier's claim deadline and notify your team of critical cut-off dates. Automate reminders to ensure claims are submitted on time.

3. Excluded Items

Certain items, like fragile or high-value products, may not be covered under standard carrier insurance.
Tip: Review your carrier's exclusions and consider additional insurance for high-risk or high-value items. Make sure your team is aware of coverage limitations.

4. Improper Packaging

Damage due to insufficient or improper packaging may lead to denied claims, as carriers often attribute this to retailer negligence.
Tip: Follow carrier guidelines on packaging requirements and use robust materials for fragile items. Educate warehouse staff on best practices to reduce the likelihood of damage.

5. Incorrect Claim Value

Claims are sometimes denied if the declared value does not match the item's actual market value or proof of sale.
Tip: Ensure the declared value accurately reflects the product's sale price and has supporting documentation. Regularly review declared values to align with current pricing.

By proactively addressing these factors, retailers can significantly improve their success rate in claim approvals and minimize delays.

The role of customer communication in claim processing

Effective customer communication is crucial throughout the claims process, as it can significantly impact customer satisfaction and loyalty. When an issue arises, such as a delayed, lost, or damaged parcel, acknowledging the problem immediately assures customers that their case is being handled carefully.

Sending a prompt message—ideally within 24 hours—lets customers know that their claim has been received and provides an estimated timeline for resolution. Maintaining transparency during each stage of the process is equally important; customers value updates on the progress of their claim, from submission to final resolution. Regular updates prevent misunderstandings and allow customers to feel involved, which helps foster trust even in difficult situations.

Clear instructions are another key element of customer communication, especially when additional documentation or action is required from the customer. By using straightforward language and explaining why certain information is necessary, you can minimize delays and ensure customers remain engaged in the process. Offering compensation options, such as the choice between a replacement item or a refund, can also improve the customer experience by giving them control over the outcome.

Once a claim is fully resolved, a follow-up message demonstrates attentiveness and allows retailers to gauge satisfaction with the process, helping them gather insights to improve future claims handling. This end-to-end communication approach not only helps manage customer expectations but also reinforces the retailer's commitment to service and transparency, ultimately building long-term customer loyalty.

"Our goal is to resolve claims efficiently and drive the best possible outcomes for our customers by leveraging our custom-built software, optimized workflows, and expert team. By relieving retailers from the hassle of claims management, they can focus on growing their business rather than logistical issues.”— George Steele, Senior Product Manager

Fast & easy claims with Seven Senders

With our Claims Center, you can submit a claim within seconds - with one standardized process and minimal manual data entry. Plus, you can track and manage your claims and monitor performance KPIs with our easy-to-use dashboards. Visit our Claims Center to learn more!