Blame Porch Pirates For Higher Prices

 

 Oh, we already found at fault and fired Biden and Scholz for their sanctions on Russia and therefore, high prices. Is there anyone else out there?

"Lost deliveries, shipping delays and theft on the front porch have become such growing problems that companies are making consumers pay for package protection.

Tens of thousands of online retailers now offer the service for a few dollars per order. The fees go to young companies -- Route and Corso, to name two -- that promise to make customers whole without charging the merchant if a delivery doesn't arrive.

Consumers are finding that retailers either ask them to pay for package protection or draw a harder line when it comes to replacing a missing item. Some retailers are making the fees mandatory, spreading the burden of package theft among all customers.

To know whether you are paying the fee, review your order before you press purchase. Sometimes it is named after the company offering protection, and sometimes it is called shipping insurance or package protection.

Skincare brand Topicals began using Corso two years ago after seeing 30% of its packages were regularly marked delivered but not received, according to customer insights manager Deja Jefferson. By requiring protection, which Topicals discloses on its shipping page, the company doesn't have to worry about convincing customers to opt in.

"We actually don't get any complaints on it whatsoever," she said.

Whether the package protection fees are easy to find or not depends largely on the retailer. Some brands automatically add optional coverage to orders. Customers have complained the fees are disclosed in small fonts, made to appear mandatory when they are not or are displayed late in the online checkout process.

President Biden took aim at a range of hidden fees in his State of the Union speech last year. Federal Trade Commission and Consumer Financial Protection Bureau officials say showing fees only at the end of the transaction, known as drip pricing, is a deceptive practice. Customers tend to register the lower price seen at the beginning over the higher final one. That means they are less likely to shop around for a better price once they start the check out process.

Earlier this month, the FTC finalized rules that all mandatory fees will need to be disclosed to consumers in initial search results when booking. So, come April, consumers will have to know about the required package protection fees right away. But they still may have to pay them, no matter what.

That said, soon more retailers will either have to make the fees mandatory, or work harder to convince consumers they are worth paying.

Shopify, which handles the technology infrastructure for direct-to-consumer brands and larger companies, told merchants earlier this month that automatically adding optional charges at checkout will be banned, starting in February, according to affected companies. Shopify didn't respond to requests for comment.

When a package gets stolen or ruined in transit, customers typically expect retailers to foot the bill. Retailers struggle to afford shipping losses on top of their other rising costs.

Christina Stembel, founder of Farmgirl Flowers in San Francisco, signed up with Route to allow customers to pay $5.95 at checkout to cover their flower orders from delays, damage and theft. Widespread delays in February 2021 forced her to reship the majority of orders at a loss. The company lost $5.5 million that month, she said. Stembel had to take out a personal loan to keep the business afloat.

After that, Stembel revisited her policy of always replacing bouquets that were spoiled due to transportation delays she had no control over. But she also felt bad passing the cost on to customers, so she wrote a 2,200-word explanation email to customers last year.

"I know some of you may be asking why we're asking you to pay for package insurance -- especially at a time when everything seems to be getting more expensive," Stembel wrote.

She added in an interview: "If you don't opt in, we can't make it right for you. We can't take this liability anymore, or we won't be in business."

About 60% of Farmgirl Flowers orders are now protected by Route, slightly higher than the 50% take-up rate across Corso and Route's customers. Merchants who are more transparent about the fee and what it covers tend to have higher opt-in rates, said Michael Yamartino, Route's chief executive.

"People by default are skeptical of fees," he said." [1]

1. Blame Porch Pirates For Higher Prices. Moise, Imani.  Wall Street Journal, Eastern edition; New York, N.Y.. 30 Dec 2024: A11.