City dwellers are only slightly more likely than residents of suburbs or rural areas to have their online orders stolen off their doorsteps. While an online retailer is not liable for goods stolen from a consumer’s home, shoppers often will seek a refund from their card company, prompting a chargeback demand. Some merchants replace the product as an act of goodwill.

Despite doorbell cameras and package-tracking apps, porch piracy shows no signs of going away, according to a survey by InsuranceQuotes.com. And that puts online retailers on the spot when customers complain that thieves have stolen packages from their doorsteps: Even though they can often defend themselves against the shopper’s chargeback request, some retailers, like Kuru Footwear, prefer to replace the item to keep customers happy.

Such thefts went up during the COVID-19 pandemic as online shopping surged, according to a November 2020 survey of online shoppers by market research firm C+R Research. The survey of 2,000 consumers found that 43% said they have been a victim of porch piracy at some time, up from 36% in a similar survey last year, while 29% said they had been victimized during the coronavirus period.

In addition, 43% said a neighbor had had a parcel stolen, an increase from 31% who said so last year, and 61% said they knew of someone who had ever been a victim of porch piracy, up from 56% in the 2019 survey.

Looking ahead to the holiday period, 64% of survey respondents said they planned to deter package theft by staying home to receive deliveries, while 24% intended to pick up online orders in stores, 23% to install doorbell cameras 21% to shop at stores and 19% to request a signature upon delivery.

In a separate November 2020 survey by InsuranceQuotes.com, 18% of U.S. consumers said they were victims of so-called porch pirates, or criminals who steal online orders from doorsteps before recipients can collect them. That’s the same percentage as in last year’s survey, according to InsuranceQuotes.com, a website that offers policy quotes from insurance carriers. Market research firm SSRS surveyed 1,007 consumers by telephone Oct. 27-Nov. 21 on behalf of InsuranceQuotes.com.

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Merchants can help defend against this problem by ensuring that they have compelling evidence on hand.
Monica Eaton-Cardone, co-founder and chief operating officer
Chargebacks911

Porch pirates strike in suburbs as well as cities

The study shows little difference based on where the shopper is located: 18% of survey respondents who live within cities said they had been victimized versus 16% of those who live in suburbs or rural areas. That contradicts the notion that this type of theft is much more common in big cities, says Michael Giusti, senior analyst at InsuranceQuotes.com and author of the study.

Giusti says it’s also noteworthy that there was no reduction in the percentage of consumers who say they have been victimized by this type of crime, despite the proliferation of video-equipped doorbells like Ring and Google Nest and of mobile apps from carriers like FedEx and UPS that allow consumers to track deliveries and re-reroute orders to alternative pickup points.

“They’re making some strong efforts to prevent this, which is holding the line, but it shows there is still the pressure from the porch pirates,” Giusti says.

Apart from consumer surveys, hard data on this kind of crime is scarce. Cybersource, a provider of fraud-prevention services owned by Visa Inc., says it has seen “a significant increase” in this type of theft this year, though it could not provide an estimate of the size of the increase. Accertify Inc., a similar anti-fraud service owned by American Express, says it does not believe porch piracy is increasing, citing the proliferation of video doorbells and more consumers working from home during the COVID-19 pandemic as possible deterrents.

When a parcel is stolen from a front porch or apartment house lobby, the consumer often will complain to her payment card company, triggering a request for a chargeback, or a reversal of the charge for the order. It’s hard to know how many chargebacks stem from porch piracy because the consumer typically will make the same complaint of non-receipt of goods when the merchant or delivery service actually is at fault, says Monica Eaton-Cardone, the co-founder and chief operating officer of Chargebacks911, which helps retailers minimize losses from chargebacks.

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Is the online retailer responsible?

The online seller is not deemed responsible for goods stolen from a consumer’s home or doorstep, but that doesn’t mean e-retailers aren’t bearing the cost of porch piracy, Eaton-Cardone says.

“Even if the customer genuinely believes the claim, it would still be a case of friendly fraud, which refers to a chargeback filed without a valid reason,” she says. “According to our data, friendly fraud represents between 60-80% of all chargebacks.

“Merchants can help defend against this problem by ensuring they have compelling evidence on hand. This includes documentation like delivery confirmation, photos of the item delivered to the individual’s porch, and signature confirmation for high-dollar value items,” Eaton-Cardone says.

While she encourages retailers to “be attentive, helpful, and understanding when customers become victims of theft,” she adds, “they should not accept responsibility for theft that’s outside their control.”

How Kuru Footwear responds

Even if they know they are not responsible, however, some online retailers replace the product ordered to keep customers happy. For example, web-only brand Kuru Footwear sends out a replacement at no charge if a customer says thieves stole a package, says Sean McGinnis, senior vice president, who heads of marketing, ecommerce and customer experience.

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“One of our primary operating principles is we are focused on creating a ‘world-class anticipatory customer experience,’” McGinnis says. “The decision to send a replacement is a good example of that principle in action.”

He adds that Kuru hasn’t seen any increase in porch piracy this season compared with prior years. And it appears doorstep theft is not a major problem this year.

Ben Devey, customer experience manager for the comfort shoe brand, says Kuru received 90 complaints from customers of packages not being delivered from Nov. 1 to Dec. 15. That represented about 0.8% of all interactions with customers.

When a customer calls about a lost package, Kuru asks that he wait 36 hours to see if the parcel arrives or perhaps was delivered to a neighbor by mistake, Devey says. He says sometimes shippers’ tracking apps—such as FedEx Delivery Manager and UPS My Choice—show a package was delivered before it actually arrives and some consumers call immediately if they don’t see the parcel. “As soon as it shows delivered, they panic,” he says.

Kuru calls the customer back within 36 hours of the customer’s complaint to see if the package has arrived, Devey says, and in about one-third of cases this year, the parcel did turn up. In the other cases, Kuru sends a replacement, while also filing a claim with FedEx, its delivery carrier.

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FedEx approved one-third of the claims Kuru filed since Nov. 1, conceding it may have lost the package, Devey says. In those cases, the carrier reimburses Kuru for the shipping fee plus up to $100 of the retail value of the order. But Devey says that if FedEx can show that it delivered the package—which would often be the case if the parcel had been stolen after delivery—it denies the claim.

Weighing the cost and hassle of signature confirmation

Devey says an online retailer could avoid the problem of porch piracy by requiring that the customer sign for every delivery. But that may be inconvenient for the customer and costly for the retailer. Both FedEx and UPS charge an additional $5.25 per package when a signature is required.

Given that only a small percentage of orders shipped generated complaints about non-delivery—and some of those orders ultimately were delivered or apparently were lost in transit—it appears porch piracy is not a big enough problem to justify expensive steps to avoid such theft, Devey says.

“It’s a balancing act,” Devey says. “If it became an issue, we would require signatures and pay more per shipment. But it’s not a pain point and the reality is that our customers are accustomed to no signature.”

The one exception to Kuru’s policy of replacing lost or stolen orders occurs when Kuru sends a replacement and the customer claims that the second shipment also was stolen, even when FedEx can show that both orders were delivered. In that case, Kuru will not send a second free replacement order.

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“We choose to do the one-time replacement because we want to create a great experience,” Devey says. “But we won’t do it more than once for any one person to keep anyone from taking advantage.”

 

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