Indeed, it’s that time of the year when the atmosphere oozes with excitement and anticipation. Shoppers would be trawling through the malls or through online stores to find that perfect gift for their loved ones, with the average US consumer planning to spend $1,063 on holiday-related purchases in 2024—a 7.9% increase from $985 in 2023, according to The Conference Board’s Holiday Spending Survey. Meanwhile, retailers anticipate the busiest of their periods—the holiday season.
Credit: The Conference Board
But amid the excitement and frenzy of holiday shopping, it is often easy to forget that every shopping spree requires insurance. Retail these days is in both traditional stores and the rapidly growing e-commerce landscape—where only 8% of consumers plan to do all their shopping in stores. A consumer faces hundreds of incidentals before being all smiles at the most joyous time of the year—from damage to products during shipping to fraud and theft.
In this article, we take a look at the current retail landscape and holiday shopping trends to understand the context in which these risks arise. Next, we will examine what could go wrong during holiday shopping—be it package theft, product defects, or cyber fraud. Finally, we will look at the cost of not being insured: what financial and emotional burdens these risks can impose. Next, we will run down the gamut of insurance options available to the consumer, from comprehensive shopping insurance to specific protections afforded by credit cards. Finally, we’ll give you some practical holiday shopping tips for risk mitigation—to help you make it through the season confident and secure.
What Could Go Wrong?—The Potential Risks in Holiday Shopping
Online Shopping Risks
E-commerce threats like deceptive sites, data leaks, and non-delivery goods pose major issues for online buyers. A Juniper Research analysis from 2023 indicates a global e-commerce fraud cost to retailers topping $48 billion, up from over $41 billion the previous year. TransUnion highlighted frightening stats in 2020, with a 347% spike in takeover fraud and a 391% jump in shipping fraud since the pandemic began, underlining online transactions’ vulnerability.
In-Store Shopping Risks
Traditional shopping exposes consumers to risks, including theft that occurs during transit and at the checkout. This impacts in-store shoppers, especially when goods suffer physical damage while being transported home, particularly for items that are fragile or expensive. Without adequate safeguards or insurance, shoppers might have to cover the costs of replacements personally.
Post-Purchase Issues
Faulty goods, refund disputes, and missing parcels increase holiday shopping challenges. Annually, over 22 billion packages get shipped worldwide, with each person receiving more than 60. Not all reach the destination. Commonly termed “porch pirates,” package thieves frequently take deliveries from doorsteps. Security.org’s 2024 assessment found that one out of every four US adults has experienced a theft, with 4% (approximately 14 million individuals) from the last three months.
The Price of Not Being Insured—The Financial and Emotional Burdens
Replacement Costs for High-Value Items
Without insurance, replacing valuables like electronics or jewelry can be expensive. Without it, should something be lost, stolen, or damaged, you’d cover the entire cost. For instance, a $1,000 phone or a stolen smartwatch may not be included in standard policies, leaving you to pay out of pocket. Insurance aids in relieving financial strain by covering replacement expenses.
Delayed or Denied Refunds
Without insurance, refunds often get delayed or denied, particularly when products get damaged during shipping or post-sale. Retailers may offer narrow insurance policies, putting you in charge of handling broken or unsatisfactory items. With insurance, the fix process moves quicker and gives more reliable compensation.
Increased Stress and Inconvenience
Not having insurance can mean major stress and hassle, dealing with damaged goods or tracking down stolen packages. The chore of handling refunds or disputes might dash the cheerful spirit of the season. Insurance helps streamline these issues, making your shopping journey simpler and more delightful.
Understanding Insurance Solutions for Safe Holiday Shopping
Credit Card Protection
Credit cards often come with purchase protection, benefiting from coverage against theft, fraud, or item damage, typically valid for around 30 days. This safeguards recent purchases, offering reimbursement should the goods be stolen, damaged, or found defective. This perk is particularly appreciated during the busy holiday season, encompassing both online and in-store purchases.
Extended Warranty
Extended warranties supplement the original manufacturer’s coverage, especially for costly electronics, home appliances, or other large purchases, providing protection against failures or malfunctions post-initial warranty period. They ensure ongoing security for the investment over a longer timeframe.
Price Protection
Credit cards and retailers often provide price protection, compensating the difference for goods purchased elsewhere at a reduced rate, typically within a 30-to-60-day window. This is particularly beneficial during holiday sales when prices fluctuate frequently, ensuring a favorable deal even post-purchase.
Shipping Insurance
Applying shipping insurance is wise for fragile or precious items, safeguarding against loss, theft, or damage during transit. It ensures peace of mind, guaranteeing that your purchases will reach their destination without issue, especially during the hectic holiday period for online or long-distance shipments.
Identity Theft Protection
The growth of online shopping has brought to light the significant issue of data breaches and fraudulent transactions. Identity theft protection is essential as it tracks credit activities, promptly notifies users of unauthorized use of personal data, and aids in the recovery of identity should it be compromised. This service is vital for ensuring financial stability, particularly during high-volume shopping periods.
Holiday Shopping Tips for Risk Mitigation
- Shopping from well-established stores and retailers: Stick to well-known stores or platforms for quality products and secure transactions.
- Choose tracked and insured shipping: Make use of a high-value item’s shipping protection.
- Use credit cards with purchase protection: Use cards that will have additional security, extended warranties, and prevent fraud.
- Keep purchase records: Save the receipts and warranty information for easy returns, exchanges, or claims.
- Keep personal information secret: Never share sensitive information over unsecured or suspicious websites.
Conclusion
Holiday shopping is the most joyous and exciting time of the year, but it has its disadvantages such as fraud, theft, as well as damaged goods. Right insurance would secure such purchases and remove unnecessary stress, thus allowing one to enjoy the season without worrying about anything.
At Gonzalez & Company, we’re here to protect what matters most. From personalized coverage to dedicated service, we ensure your holiday investments are secure. Contact us today to explore your options and shop with confidence this season!