Interesting dilemma regarding USPS insurance payout on a lost custom knife

brancron

brancron

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Someone over on Reddit's /r/knifeclub traded his large Sebenza for a custom knife directly from the maker. The custom knife was valued at around $400 by both parties, and USPS shipping insurance was purchased on it for that amount. However, the custom knife ended up being stolen during transit by a USPS employee (the Sebenza made it safely). The circumstances surrounding the loss aren't in dispute.

Here's the kicker: since it was a custom knife that was not purchased by the recipient, the USPS is claiming that there's no way for them to assess the actual value of the item, and for that reason they're refusing to pay out the requested $400. The maker even wrote up a receipt/valuation stating the knife was worth $400, but the USPS was not swayed.

Here are the relevant sections from the Domestic Mail Manual:

609.3.2 Proof of Value

Either the mailer or the addressee must submit acceptable proof to establish the cost or value of the article at the time it was mailed. Proof of value should be submitted electronically or attached to the claim form under 1.5; otherwise, the claim cannot be processed. Other proof may be requested to help determine an accurate value. Examples are:

a. A sales receipt, paid invoice or bill of sale, or statement of value from a reputable dealer.
Click to expand...

609.4.3 Nonpayable Claims

Indemnity is not paid for insured mail (including Priority Mail Express and Priority Mail), Registered Mail, COD, or Priority Mail and Priority Mail Express in these situations:
...
af. Personal time used to make hobby, craft, or similar handmade items.
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I'm not certain whether 609.4.3(af) applies to this situation or not. "Hobby" and "craft" imply amateur stuff (like bird houses made out of popsicle sticks and crap like that). Arguably, professionally made custom knives shouldn't be considered "similar handmade items" where "similar" refers back to "hobby" and "craft." If the section does apply, then I don't know what would be compensable besides material costs. (Interesting aside: there used to be a section in 609.3.2 that dealt with material cost of handmade items, which has since been removed. It can be found in the prior manual.)

So, I'm just curious if anyone has any experience with these rules as they apply to this situation. And if it turns out it's true that the USPS will not pay out insurance in this type of situation, are there any alternatives?
 
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Buddy of mine from the army insured a box containing his laptop (which i believe he bought at a PX in the sandbox a couple years earlier). Usps broke it, he filed a claim and since he didn't have the original reciept, USPS refused to pay out-on an item that a 30 second google search would have returned an accurate value for.
When i ship knives out it's very, very rare that I insure the box. In the time it takes to make a successful claim I can make the customer another knife, and possibly quicker. Just my $.02.
 
What other knives are in the makers catalog? It would be best to point UPS to that listing and sort of holding their hand while connecting the dots.
 
The maker has the power to issue and reissue a receipt or valuation. I don't understand the problem.
 
RX-79G said:
The maker has the power to issue and reissue a receipt or valuation. I don't understand the problem.
Click to expand...

I would go with this and never even bring up handmade or anything that would throw them off track. I think the handmade they refer to is like your kids 1st grade project is priceless, so you insured it for $1000-not going to be paid.
 
RX-79G said:
The maker has the power to issue and reissue a receipt or valuation. I don't understand the problem.
Click to expand...

I forgot to mention, he obtained a receipt from the maker stating that the knife was worth $400, but apparently that didn't satisfy the USPS.
 
Funny I was in the post office sending my last purchased knife off and a gentleman was firing off at the guy behind the counter.

The gentleman was some kind of artist ,I'm sure some of seen his type of work he took a blank piece of steel and basically drew out an image with a plasma cutter . The detail work on the lost piece was amazing FWIW.

The maker had brought receipts and previous receipts of his work as well as the receipt for the piece he had just made that got lost.

The employee at the post office said he believed the maker and all that and was doing all he could to help the maker . After some time the maker had said he had already tried contacting the supervisor or head person the postal employee was telling him to call.

The maker was out around 800 for the piece and around 70 or 80 bucks for the shipping (just what I heard standing in line). He had his ducks in a row when it came to documentation and the usps was still giving him trouble in honoring the value .
 
The claims agents should really be more accurately called claims denial agents.

I did read the notes here re these handmade items and it seems to me the wording is aimed at someone who sends some of their "art" via the mail and it's lost. The sender then states said art took 140 hours to assemble and they need to compensated for that labour. That's obviously a statement of personal opinion and unverifiable by normal means.

A maker who forges or grinds knives and then sells them is a different cat. If I had to guess I would suspect the agent there is taking the position that the product had been overvalued for the claim. I'd say you want to escalate that claim or very clearly show why the item is a XX dollar product. Just writing a receipt post loss won't satisfy them now.
 
609.4.3 Nonpayable Claims

Indemnity is not paid for insured mail (including Priority Mail Express and Priority Mail), Registered Mail, COD, or Priority Mail and Priority Mail Express in these situations:
...
af. Personal time used to make hobby, craft, or similar handmade items.


That section is not referring to the item itself but actually the "value of the time" some one put into making it.

Like most insurance companies - they give you a hard time if the can. They figure most will get frustrated and go away - especially if it $200 or less.
They should pay it.........just may be a lot of trouble and time. Kind stinks when you pay extra for something and they do not want to honor their end.
FedEx or UPS actually gives you "free insurance" up to a minimal amount (more than the $50 priority).
 
I didn't have a good experience with the postal claim process.It's my opinion that the insurance is just to make you waste money. Give you the feeling a valuable item is protected leaving customers with a false sense of security.
 
I had a similar refused claim once. I appealed the claim with a letter from a knife dealer stating the value of the knife in question. The claim was paid. They took every bit of the 60 or 90 days to do it, but they did pay out :)
 
The Consumer Affairs quote is right on the money. I don't understand what kind of post offices you guys have. No wonder people hate the USPS.

You need 3 things to file a claim..........

1 Proof of damage/non delivery
2 proof of value
3 original mailing receipt

That's it. If you have those 3 things they CAN NOT deny your claim!
 
Monofletch said:
The Consumer Affairs quote is right on the money. I don't understand what kind of post offices you guys have. No wonder people hate the USPS.

You need 3 things to file a claim..........

1 Proof of damage/non delivery
2 proof of value
3 original mailing receipt

That's it. If you have those 3 things they CAN NOT deny your claim!
Click to expand...

Seems the employees in the insurance claims department haven't read their guidelines
 
Monofletch said:
The Consumer Affairs quote is right on the money. I don't understand what kind of post offices you guys have. No wonder people hate the USPS.

You need 3 things to file a claim..........

1 Proof of damage/non delivery
2 proof of value
3 original mailing receipt

That's it. If you have those 3 things they CAN NOT deny your claim!
Click to expand...

The proof of value part is the dilemma here. How do you accurately value a handmade, one-of-a-kind knife that wasn't purchased? Can the maker simply attest to the value? [This hasn't worked so far, and it's easy to see how there could be problems with this in principle, like a maker grossly overvaluing the item.] Can you indirectly prove the value through proof of value of the item it was traded for? [This is Esav Benyamin's suggestion, and it's a good one, but could also have problems: for example, you could buy a house with a peppercorn if you wanted--doesn't mean the house is worth only one peppercorn.]
 
I don't know is Esav had his postal worker hat on when he made the suggestion, but if so it is probably an accepted method of proof.
I'll let him weigh in to clarify if it is, but it does seem reasonable to me. That said-Government agencies and reason don't always mix.
Good luck on this one, I am hoping for a positive outcome, but I am sure it will take a lot of patience.
 
It can take a lot of patience. Not every worker in any business knows his job. You need to quote the rules and provide as much corroborating evidence as possible.

The knifemaker can show a comparable item from his website, CRK can show retail value of their model, and the traders can show their correspondence. If the answer is still no, take it to the next level.

When I was working Executive Offices in NYC, we had customers walk into the first office on the 3rd floor and generally get sent see me if no one up front understood what they needed. If I didn't know, I walked them down the hall to someone who did.

I knew everyone. :)
 
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