Postal Service spanked over insurance ads

When the U.S. Postal Service advertises that its Priority Mail service comes with $50 of insurance included, you might assume that it comes with, well, $50 of insurance. But that's not always the case, and the National Advertising Division (NAD) has asked the Postal Service to make more clear the limitations and exclusions.

While the Postal Service disagreed with the NAD's determination that the insurance claim was misleading, it has agreed to make changes. The issue is that while $50 insurance can be included with Priority Mail postage, which starts at $5.60, it comes with quite a few catches.

The issue came to light when a consumer's Priority Mail envelope containing a $100 gift card was lost, but she only received $15 in compensation plus the postage she paid, according to NAD, the advertising industry's self-regulatory body operated by the Council of Better Business Bureaus.

It turns out the Postal Service website has asterisks next to the words "$50 insurance included in Priority Mail service." The asterisks noted that to qualify for the $50 in insurance a package must have a tracking barcode. However, it turns the Postal Service has a lots of other rules about what you can claim and what you can't with that insurance. Among the rules is a $15 cap on gift card reimbursements.

But that wasn't made clear, said NAD. "Based on the information available at the advertiser's website at the time of the consumer's purchase of the Priority Mail service, and absent any information in the record that would otherwise alert the consumer to restrictions that would apply to the insurance coverage for her Priority Mail package, NAD determined that the message reasonably conveyed by the webpage is that the consumer would be reimbursed $50 for her lost shipment."

So, the organization told the Postal Service it needs to be more upfront about what isn't covered by the $50 of insurance that's supposed to come with Priority Mail. The Postal Service said it will, but it could take time to get it all done.

"Please bear in mind that the DMM (Domestic Mail Manual) is a Federal regulation of the Postal Service that sets forth the terms under which the Postal Service provides products and services," the Postal Service said. "Making changes to the DMM can be a lengthy process. In addition to the internal review that must take place before a proposed DMM change is determined to be appropriate, the Postal Service is required by Federal law to publish a notice of changes to the DMM in the Federal Register, which provides the public with a period of time, generally no less than 30-60 days to comment on proposed DMM changes. However, we will work to have any necessary changes implemented as quickly as possible."

The Postal Service also said it planned to make its website more consumer-friendly, and the fine print is a bit more obvious already.

But if you plan to send something by Priority Mail and it gets lost or damaged, be forewarned you cannot claim sentimental value, the cost of an appraisal or "Death of honeybees, crickets, and harmless live animals not the fault of the USPS."

You can read all 34 exclusions and limitations just to be sure.

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    Mitch Lipka is an award-winning consumer columnist. He was in charge of consumer news for AOL's personal finance site and was a senior editor at Consumer Reports. He was also a reporter for The Philadelphia Inquirer and the South Florida Sun-Sentinel, among other publications.