Our business sold and shipped an item via UPS via Shopify. The item sold was a piece of original artwork and the shipment was insured for $5,000. The insurance premium for the label was $44.50.
The item was damaged in transit and UPS elected, on their own, to discard the package due to containing broken glass. UPS considers broken glass to be hazmat.
UPS automatically opened a claim on our behalf. We worked with their damage inspectors and they verified that the shipment had been destroyed and would not be recoverable. After supplying the necessary paperwork to verify the value of the claim, the claim was closed and we received a check for $100.
I contacted the UPS claims dept to find out why the payment was so low. They said that the shipment was not insured and that the value of the item was not specified when the label was created. I spoke with another rep, who said the same thing and that the money for the insurance coverage was never paid to UPS, therefore the shipment was not insured. Both UPS reps left me no options to proceed and they instructed me to contact Shopify to resolve the matter.
Does UPS's explanation make sense? When I purchase a label through Shopify, what is the point of insurance if doesn't do anything? I feel that either UPS is not being truthful about the situation OR there is something severely wrong with the way insurance coverage when buying a shipping label via Shopify.
Can anyone help me with what to do next? Obviously we refunded the customer $5,000, but we are now out that money, and it is clear that UPS will not be taking responsibility for any part of this.
Thanks,
