Extra Profit or Consumer Squeeze?

Hello!

I’ve been reviewing an optional “Order Protection” order add-on across a high-volume merchant. The opt-in rate sits at 68% over the last 90 days. ~2 of 3 buyers are choosing to pay a small additional fee for a bit of extra security.

What this really is (and what to call it)
In my clients’ business it’s an optional service that promises quicker resolution via a replacement or refund when a shipment goes missing, or arrives damaged. Another example of something that can be offered in this vein is “Free no questions asked returns”.

Whatever the value-add is, do not label the service “insurance.” Stick with neutral descriptors like “Order Protection” “Priority Handling” or “Delivery Guarantee” to stay clear of regulatory trigger words.

Why customers toggle it on
Shoppers have fresh fear around porch theft, and carrier delays. A low fee compared to cart total feels trivial as a hedge against uncontrollables.

If your website's return policy is the customer pays for return shipping, perhaps allowing them to have that fee waived if their order is opted into this nominal fee will drive opt-in just as well as shipping and delivery based value-adds do.

Thin margin upside
For low margin products (after COGS, pick/pack, acquisition, and payment fees) a $3-$5 optional fee can move an order from barely (or not) profitable to clearly positive. Perhaps you view it as decreasing your acquisition cost, covering the cost of the CC or BNPL transaction fee, or simply increasing your margin on the product.

This is a volume game. High order volume websites can benefit from this and earn additional tens of thousands of dollars per month, if not more. My client is earning mid-six figures per year from this. While it only accounts for less than 1% of total yearly revenue, it still pays for something.

Behavior dynamics to watch
Protected orders may skew toward higher cart values as cautious or higher-risk buyers opt in. That can be positive (larger gross dollars supporting the service) or risky if large replacements are more frequent. Presence of the option may also lower perceived risk for all shoppers including those who decline it which may have a neutral or slightly positive effect on conversion.

On the other hand, vague wording or auto opt-in will ruffle feathers and cause backlash. Implementation is key. The customer should not feel like you are squeezing them.

Language hygiene
Spell out what the service covers (package never arrives after X days of no tracking movement, arrives visibly damaged with photo) and what it does not (size exchanges, color changes, buyer remorse, carrier delays inside normal windows). Provide a single simple submission path (order number + description + photo). Promise a resolution decision within a concrete time frame (for example 24 hours) and stick to that SLA.

DIY this for the best outcomes
There are so many apps that offer this service and charge a monthly fee or (in most cases) a percentage of the revenue earned from the opt-ins. In the realm of ecommerce development, this is a simple thing to have implemented, so it is worth getting this done internally rather than outsourcing to a third party tool.

In order to get this off the ground, you’ll need to map out a few things:

• The offer
  • Free returns, no questions asked replacement for lost/damaged goods
  • Where will this offer be shown?
• Pricing
  • Static, flat percentage of order, scaled percentage based on order size
• The workflow
  • Submission form, support team macros, etc

Building this internally allows you to pivot endlessly as your business changes, and doesn't force you into a box determined by a 3rd party that services all different businesses.

Beat up your carrier
Secondary to making sure the customer gets what they paid for, ecom owners also need to make sure they get what they paid for from their carriers. USPS, UPS, and FedEx all have a way to file claims for packages they lost in transit. Don’t just eat the loss for convenience sake or “cost of doing business”. Hold them accountable. Submit the claims and make sure you get what you paid for.

Have a protection program live on your site? Share some data at the link below.
→ Submit here!

Talk soon,

John Sciacchitano
E-com Heads: Scale or Die Trying
Connect w/ Me on LinkedIn