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http://www.ftc.gov/bcp/conline/pubs/buspubs/mailorder.htm
Insurance Charges
Q: What are our responsibilities if we charge to insure delivery?
A: Instead of directing customers to make claims against the common carriers
who may be responsible for losing merchandise, most merchants reship for the
sake of customer satisfaction. To pay for these reshipment policies, some
merchants ask customers to buy "insurance" or provide it as an option. By
offering insurance, the merchant implicitly represents that it will honor
any claim of nondelivery by providing prompt reshipment or, if reshipment is
impossible, a prompt refund. It would be improper to collect fees from
customers for reshipment insurance and not respond promptly and
appropriately to their bona fide claims of loss.
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