When a package disappears or arrives broken, someone pays to make it right. The question is who, and how much work it takes. Merchants have historically had three ways to manage that risk.
Carrier liability and declared value. Major carriers may include limited liability for packages lost or damaged while in their network, and shippers can pay to declare a higher value. There are two catches. The shipper files and documents the claim, not the end customer, which can take weeks to resolve. And, carrier liability generally ends once the package is marked delivered, so a box stolen off a porch usually falls outside it.
Merchant-purchased shipping insurance. A brand buys coverage for its shipments from an insurer or broker, per shipment or as a blanket policy. Coverage is broader than carrier liability, but the merchant's team still files and manages every claim, and the premium comes out of the brand's margin directly.
Checkout package protection. The shopper chooses protection at checkout and pays a small fee. When something goes wrong, the claim is handled between the shopper and the protection provider, so the merchant's support team is no longer in the middle and the cost of resolution no longer comes from the brand. This is the model Route pioneered.
What package protection covers
Lost packages. Orders that enter the carrier network and never arrive. Tracking stalls, and the package sits in limbo.
Stolen packages. Orders the carrier marks as delivered that the shopper never receives. Porch piracy is the most visible case, and it is exactly the scenario carrier liability tends to exclude.
Damaged packages. Orders that arrive broken or unusable because of how they were handled in transit.
Coverage applies to problems that happen in transit or at delivery, and every program has exclusions, such as certain item categories and filing windows. Route publishes its full coverage terms and claim filing timelines at route.com/insurance.
How package protection works with Route
Route Protect integrates natively with Shopify, BigCommerce, WooCommerce, Magento, and Salesforce Commerce Cloud, or through an API for custom builds. Once live, shoppers see the protection option in the cart or at checkout with the fee shown clearly next to the order total. Shoppers stay in control: paying for package protection is always their call.
When something goes wrong, the shopper files a claim in seconds through the web or the Route app, any time of day. Route's AI assesses the claim against the merchant's policies and scores it for fraud in seconds, then surfaces the best resolution options to Route's support team. A person makes the final call and makes it right with a replacement, reorder, or refund. AI recommends, humans decide. Most issues are made right in minutes, not days.
The merchant's support team never fields the carrier dispute, and the merchant never pays the premium: protection is funded by shoppers who pay for package protection, and Route's standard plan is $0 per month for merchants. Route has resolved millions of claims with a 97%+ customer satisfaction rate and a 4.7/5 rating on Trustpilot.
Why brands offer package protection
The direct benefits are operational. Lost-package tickets and carrier disputes come off the support queue, and the cost of replacements moves off the brand's books. Route absorbs the cost and the work.
The larger benefit is what it does to shopper trust. A shipping failure is one of the highest-emotion moments in the entire relationship, and shoppers remember how it was handled. Route's 2026 consumer research found that 97% of shoppers are more likely to buy again from a retailer after a positive resolution experience with a return. The same dynamic holds for deliveries: a problem made right quickly builds more loyalty than an order that simply arrived. Package protection turns the worst moments in shipping into proof the brand stands behind its products.
What to look for in a provider
Licensing first. Programs that function as insurance are regulated, and the National Association of Insurance Commissioners has warned about unlicensed sellers of package protection coverage. An unlicensed provider creates compliance risk for the merchant offering it. Route is licensed in all the states that require it.
Who handles the claim. Some programs still redirect claims back to the merchant's support team. Shopper-direct claims keep that work off your queue entirely.
Speed, with judgment. Ask how quickly claims are assessed and who makes the final decision. Instant assessment matters; so does a human making the call rather than an algorithm denying claims on its own.
Native integration and proof. Protection should live inside your checkout flow, not bolt onto it, and the provider should be able to show shopper satisfaction data and public reviews, not just feature lists.
