Why You’re Paying for Other People’s Stolen Packages
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and how they may affect your finances and portfolio. Listen at schwab.com slash Washington Wise.
Here's your Money Briefing for Tuesday, January 7th. I'm J.R. Whalen for The Wall Street Journal. As porch pirates continue to steal deliveries from people's properties, some retailers are making package protection fees mandatory, spreading the burden of package theft among all customers.
So if a package gets damaged in transit or stolen after it gets delivered, customers usually turn to retailers to make it right, which is a cost for them. And as porch piracy becomes a larger problem, retailers are really struggling to keep up with those rising costs on top of things like potential tariffs or inflation and other things that are putting pressure on their bottom line.
We'll talk to Wall Street Journal personal finance reporter Amani Moise after the break.
Listen at schwab.com slash washingtonwise.
Some retailers are spreading the financial burden of package theft among all of their customers. Wall Street Journal personal finance reporter Imani Moise joins me.
How big is the package-theft problem and how much value was stolen in 2023?
Imani, what is the value of merchandise that is stolen from outside of people's houses each year?
It's been a growing number, so it's a bit of a moving target. But in 2023, Americans reported that $13.4 billion worth of packages were stolen by porch pirates.
Why are retailers charging fees to customers even if their packages haven't been stolen?
Because when something goes wrong, so if a package gets damaged in transit or stolen after it gets delivered, customers usually turn to retailers to make it right, which is a cost for them. And as porch piracy becomes a larger problem, retailers are really struggling to keep up with those rising costs on top of things like potential tariffs or inflation and other things that are putting pressure on their bottom line.
How much are these extra fees?
It depends on the retailer and their risk profile. So it's really a deal that's made between the retailer and then these third-party companies like Corso or Route. But they're usually around $2, but I have seen one as high as $6 for a flower company because flowers are very perishable and something like even a one-day delay could render the product useless.
You mentioned two companies, Corso and Routes. What do they do?
They partner with the retailers to offer order specific package protection. So what that means is they take over the customer experience after the point of purchase. So they're responsible for keeping the customers up to date on where their package is. And if there's a problem like damage or theft, they would report to one of those companies that would order a replacement on their behalf.
What is the range of things that these fees usually cover?
So they cover package theft, of course. They also cover damage that may happen in transit, and they also cover package loss. So sometimes packages do get lost in the transit system, and if that happens to you, they'll make sure you get a replacement.
Are retailers upfront about these charges, and when do customers usually see them?
Again, that really depends on the retailer. Like I've seen some founders that will make an announcement, send an email blast to all their customers when they introduce a service like this. But some retailers only disclose these fees at checkout, which means that after you put everything in your cart and you hit the checkout button, then you'll start to see them appear in your cart and be included in your subtotal.
Why are some retailers adding mandatory package-protection fees for all customers?
So you'll see them like maybe as you're entering your shipping details or your payment information. But usually by that time, a lot of consumers are kind of laser focused on just hit the button, hit the button to get their order confirmed. So it could be a little tricky if you're not paying attention.
How are these fees and when they show up going over with consumers?
So there is a proposed class action suit that I came across where a group of consumers are claiming that these fees are deceptive because they're disclosed so late in the process.
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Chapters
5 chapters
1
What is the main topic discussed in this episode?
0:01–2:00
2
How big is the package-theft problem and how much value was stolen in 2023?
2:00–4:18
3
Why are some retailers adding mandatory package-protection fees for all customers?
4:18–5:09
4
How much do package-protection fees typically cost and who sets the price?
5:09–6:35
5
What do companies like Corso and Route actually do for retailers and shoppers?
6:35–8:27
Speakers
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