Guarantee the Delivery Experience, Not Just the Package

Learn how shipping insurance can protect margins, build brands, and turn lost packages into lasting trust.

You’re a national apparel company that just launched a multi-million-dollar campaign to attract new customers. Digital ads, influencer marketing, social media blitzes, the works. The funnel is airtight, the conversion flawless, and thousands of new customers are hitting that buy button every day. 

But after all that success, every retailer’s (and consumer’s) worst nightmare unfolds with a new shopper who splurged on their first order: The package arrives damaged. Or it never arrives, vanished somewhere between the distribution hub and their front door. Or it’s stolen right after it lands on the doorstep.

What should have been the beginning of a beautiful relationship is now marred by disappointment. That new shopper doesn’t remember the carefully crafted slogan that first caught their attention. Or the time spent scrolling through perfectly designed product pages, imagining a night out on the town in their new outfit. They remember the letdown of delivery failure – and the inevitable frustration of trying to get a replacement or refund. Their trust instantly fractures and future lifetime value is lost: 98% of merchants say delivery experience directly affects brand loyalty. 

That loss of sales - and loyalty - is a margin-killing reality for retailers, especially considering the increasing instances of delivery issues. There were a staggering 120 million packages stolen in the U.S. last year alone, up 34% year over year. All those acquisition dollars spent, all that careful brand-building, gone with a single failed delivery. And consumers are increasingly blaming retailers for bad delivery experiences, with only 39% placing accountability on shipping providers. 

But you can salvage a failed delivery and strengthen the consumer relationship. Shipping insurance transforms a mishap into a moment of care – a chance to not only save the sale, but to reinforce shopper loyalty as well. 

The Hidden Cost of Delivery Failures

Lost packages aren’t just lost goods. Each one carries a hidden price tag, with cascading effects for both the consumer and retailer.

Of course, there are the costs of issuing a replacement package or refund. But beyond that lies the real margin-killer: It weighs down your customer service department with support tickets, both time-consuming and costly. 

More importantly, you’ve disappointed a shopper, which carries the potential for bad reviews or the silent rebuff of someone who simply won’t buy from you again. Even one bad delivery can instantly erase loyalty – especially for first-time buyers. 67% of shoppers lose trust after a bad return or delivery experience. When it costs 16 times more to replace a lost shopper than to keep one, that adds up to a stark economic disaster. 

Consumer Shift: Shipping Protection is a Differentiator

Online shopping is second-nature to today’s consumers, yet it still gives them anxiety. Rising theft of unattended deliveries, especially in high-density urban areas, fuels that uncertainty.

Consumers want shipping protection as an added layer of security, and they put their trust in retailers who offer it. But the old shipping insurance model was unclear and gimmicky. Newer choices are clear, opt-in, and seamless within your post-purchase platform, a true trust signal for consumers. 

In fact, for high-value orders and with younger shoppers especially, according to Narvar data, adoption rates are skyrocketing (65% opt-in for millennials and Gen X, and 50%+ for orders over $100). 

Retailer Mandate: Protect Margins AND Relationships

All these factors impact retailers’ already-thin margins. 

Retailers absorb the blame as well as the losses (73% of retailers cover theft/damage themselves) and the operational strain of increased support-call volume. Multiplied across hundreds of thousands of tickets, that significantly erodes margins. Insurance gaps, fraud risk, and carrier delays all factor in, as well. Carrier insurance often costs around 3% of order value, but it often doesn’t cover many common incidents like theft. 

Shipping protection offsets that margin erosion from reimbursement, offloads claims handling, and preserves consumer lifetime value. 

Business Case: Why Shipping Protection Insurance Pays for Itself

Every retailer wants loyal, happy consumers, because they tend to spend more  – 33% more per order. But stoking loyalty isn’t the only way shipping insurance contributes to growth. 

In addition to protecting retailers from having to absorb the cost of replacements or refunds, shipping insurance is an additional revenue stream, with retailers receiving a small percentage of the fee paid by the shopper. 

What should you look for in a shipping insurance solution? Choose an option that you can build directly into your post-purchase experience, that clearly offers opt-in to shoppers at checkout. Automated protection embedded at the cart, checkout, and post-purchase is transparent so shoppers can see exactly what they’re choosing and what it covers. It’s a revenue-driving lever that offsets risk. 

Your choice of shipping insurance should handle claims quickly, requiring fewer escalations, less back-and-forth with carriers, and more focus on high-value consumer interactions. It should feel integral to your brand experience, with claims filed through branded channels your shoppers already trust – your email, your order page, your post-purchase flow. 

For example, Narvar Secure integrates all of these features onto one platform, handling most claims in three to five days with 95% approval rates and behind-the-scenes processes embedded into your brand. 

Turn Silent Margin Killers into Growth Opportunities

When delivery issues occur – and they will – shipping protection helps you make it right, protecting margins and maintaining loyalty. So when the outfit for a shopper’s special night out on the town doesn’t arrive, that moment of disappointment can instead turn into a trust-building experience. 

Shipping insurance isn’t just a revenue lever for your business. It’s a chance to show a shopper speed, care, and value in resolving the issue. The package may be lost, but the revenue and loyalty are not.