Shipping protection is a small, optional fee your customers add at checkout so their order is covered if it gets lost, damaged or stolen. When something goes wrong, your store makes it right with a refund, a replacement or store credit. The customer gets peace of mind, and you get a clear process instead of an awkward support thread.
This guide explains how it works on Shopify, who keeps the fee, how it differs from carrier coverage, and how to tell whether it pays off for your store.
What is shipping protection?
Shipping protection is a store-level promise to the customer. The customer pays a fee, usually a dollar or two, and in return the store agrees to fix the order if it never arrives, arrives broken, or disappears from the porch.
Three things define any shipping protection program:
- The fee: what customers pay, and where it shows up (cart, checkout or after purchase).
- The rules: what counts as a valid claim, how long customers have to file, and what evidence you need.
- The resolution: refund, reship or store credit, and who pays for it.
On Shopify, an app adds the fee to the order as a separate line item and gives customers a way to file a claim. The app you choose decides who keeps the fee and who runs the claims.
How does shipping protection work on Shopify?
A typical order with shipping protection goes through four steps:
- The customer sees the option. A widget on the cart, cart drawer, checkout or thank-you page offers protection for a set price.
- The fee is added to the order. It appears as its own line item, so it is easy to report on and refund.
- Something goes wrong. The carrier loses the package, it arrives damaged, or it is stolen after delivery.
- The customer files a claim. They use a claims page or portal, add details such as photos or tracking, and the store (or the provider) approves it and sends a refund, a replacement or store credit.
Orders without protection still get your normal customer service. The difference is that protected orders have a clear, pre-agreed path, which cuts back-and-forth for your support team.
Who keeps the shipping protection fee?
This is the most important difference between apps. There are two models.
| Self-funded | Provider-funded | |
|---|---|---|
| Who keeps the fee | You, the merchant | The protection provider |
| Who pays for lost orders | You, from the fees you collect | The provider |
| Who decides claims | You, with your own rules | The provider, under its terms |
| Whose brand customers see | Yours | Usually the provider’s |
| Monthly cost | App plan only | Often free to install |
Self-funded apps are tools. They add the widget, collect the fee into your Shopify payouts and give you a claims dashboard. You fund the claims from the fees. Priced from your own claim rate, the fees can cover claims and still leave a profit, so protection becomes a revenue line rather than a cost.
Provider-funded apps take on the claims cost and keep the fee in return. You pay nothing, but you also earn nothing, and you hand the post-purchase experience to another company.
Here is how some of the most-installed apps compare. Pricing changes often, so check each listing before you decide.
| Sam Shipping Protection | Navidium | ShipAid | Simply Shipping Protection | Seel | Route | |
|---|---|---|---|---|---|---|
| App Store rating | 4.9★ (107) | 4.7★ (396) | 4.8★ (25) | 4.6★ (131) | 4.9★ (296) | 4.0★ (377) |
| Who keeps the protection fee | Self-funded: you keep the fees | Self-funded: you keep the fees | Self-funded: you keep the fees | Self-funded: you keep the fees | Provider-funded: the app keeps the fees | Not published |
| Share of fees you keep | 100% | 100% | 91% | 100% (no revenue share stated) | Not published | Not published |
| App cost | Starter Free · Standard $9/month · Plus $29/month | Free up to 50 orders/mo, then $29.99 (500), $49.99 (1,000), $99.99 (unlimited) per month | 9% of Shipping Guarantee Revenue earned using the app | Free tier, then $4.99 (50 insured orders), $19.99 (200), $49.99 (500) per month | Free to install | Free to install; external charges via route.com/pricing |
| Built for Shopify | No |
Sam Shipping Protection is self-funded: you keep 100% of protection fees and pay only the app plan (free up to 50 protected orders a month, $9/month for unlimited). For a side-by-side look at Route and its alternatives, see Route alternatives.
Is shipping protection the same as shipping insurance?
No. They solve a similar problem in different ways.
Carrier coverage is liability the carrier accepts for its own failures. UPS limits its liability to $100 per package unless you declare and pay for a higher value, and its terms say a declared value is not insurance. FedEx also includes a $100 limit of liability and states plainly that it does not provide insurance. USPS Ground Advantage includes up to $100 of insurance. In every case you file the claim with the carrier, and you usually have to prove the carrier was at fault.
Shipping protection is your promise to the customer. It covers the problems customers actually complain about, including “delivered but not received” and porch theft, which carriers usually will not pay for once a package is scanned as delivered. You decide quickly, so the customer is not left waiting on a carrier investigation.
Third-party shipping insurance is a separate product sold by insurers and some shipping platforms. Read shipping insurance vs shipping protection for a deeper comparison.
Is shipping protection worth it?
For most stores that ship physical products, yes, if you price it from your own numbers. Here is a simple way to check, using example figures. Replace them with yours.
Example assumptions (illustrative, not benchmarks):
- 1,000 orders a month
- 50% of customers add protection
- Average protection fee: $3
- 1% of protected orders end in a claim
- Average cost to resolve a claim: $60 (product plus reshipping)
| Line | Amount |
|---|---|
| Protection fees: 500 orders × $3 | $1,500 |
| Claims: 5 orders × $60 | −$300 |
| App plan (Sam, Standard) | −$9 |
| Net per month | $1,191 |
The same store on a provider-funded app would keep $0 in fees. It would also pay $0 in claims, but it would still handle the customer conversation.
Your claim rate is the number that matters most. Pull 90 days of orders and count the ones you refunded or reshipped because of loss, damage or theft. If that rate is high (fragile or high-value goods, porch-theft hot spots), raise the fee or use price bands rather than skipping protection.
How much should you charge for shipping protection?
Pick a pricing model that matches your catalog:
- Flat fee: one price for every order. Simple to explain and works when order values are similar.
- Percentage of order value: the fee grows with the cart, so expensive orders pay their share of risk.
- Price bands: a set fee for each order-value range, for example $1.50 under $50 and $3.50 from $50 to $150. Fair on both small and large carts.
Whatever you pick, check two numbers each month: the share of customers who add protection, and claim costs as a share of fees collected. If customers rarely add it, the fee may be too high or the widget too hidden. If claims eat most of the fees, raise prices or tighten your claim rules. Our guide on how much to charge for shipping protection goes deeper, and the shipping protection calculator runs the numbers for you.
Where should the protection option appear?
Show it where customers decide, and test more than one spot:
- Cart page and cart drawer: the most common placement. Customers see the total before checkout.
- Checkout: on Shopify Plus, checkout extensions can show the option inside checkout itself.
- Thank-you page: a post-purchase offer that does not add friction before payment.
You can also hide protection for low-value carts, for countries where you rarely see problems, or for products that do not need it, such as digital goods and gift cards.
Should shipping protection be opt-in or auto-added?
Opt-in is the safest default. Customers choose it, so it never feels like a hidden charge.
Some stores pre-select protection to raise the share of customers who keep it. If you do, be transparent:
- Show the fee and what it covers before the customer pays.
- Label it as optional and let customers remove it in one click.
- Never present it as a required charge.
Regulators are paying attention to fees. The FTC’s Rule on Unfair or Deceptive Fees, in effect since May 12, 2025, targets live-event tickets and short-term lodging. California’s SB 478 is broader: since July 1, 2024, most businesses must include all mandatory fees in the advertised price. Fees for optional services do not have to be included, which is why truly optional protection matters. This is not legal advice; check the rules for the markets you sell to.
How do shipping protection claims work?
A good claims process is fast for honest customers and hard to abuse. Set it up like this:
- Publish your rules. Say what is covered (lost, damaged, stolen), the time window to file, and what customers need to send, such as photos of damage.
- Use a claims portal. Customers find their order, pick the issue and upload evidence without emailing back and forth.
- Check tracking first. “Delivered” scans, delivery photos and delivery addresses answer many claims quickly.
- Choose the resolution. Reship when you have stock, refund when you cannot replace the item, and offer store credit when the customer prefers it.
- Watch for patterns. Repeated claims from the same address or customer are a red flag. Your rules can limit claims per customer.
For the full playbook on lost, stolen and damaged orders, see our order protection guide.
How do you add shipping protection to your Shopify store?
With Sam, setup takes a few minutes:
- Install Sam Shipping Protection from the Shopify App Store.
- Set your price: flat fee, percentage, or price bands by order value.
- Choose where the widget appears: cart, cart drawer, thank-you page, or checkout on Shopify Plus.
- Add your protection policy and turn on the claims portal.
- Place a test order and file a test claim to see the full flow.
If you are moving from another app, install Sam first, then turn off the old widget so customers never see two offers. Orders placed before the switch stay with the old provider.
Frequently asked questions
What does shipping protection cover?
It covers the cases the store chooses to cover, usually packages that are lost in transit, arrive damaged, or are stolen after delivery. The store publishes the rules (time limits, evidence needed) and resolves each approved claim with a refund, a replacement or store credit.
Is shipping protection the same as shipping insurance?
No. Carrier coverage such as UPS or FedEx declared value is liability the carrier accepts for its own mistakes, and you claim it from the carrier. Shipping protection is a promise from the store to its customer: the customer pays a small fee and the store fixes the problem, whoever caused it.
Who keeps the shipping protection fee?
It depends on the app. Self-funded apps such as Sam let the store keep 100% of the fee and pay claims itself. Provider-funded apps keep the fee and handle claims for you, so the store earns nothing from it.
Should shipping protection be opt-in or added automatically?
Opt-in is the safest default. If you auto-add it, show the fee clearly before payment, label it as optional and let customers remove it in one click. Hidden-fee laws are tightening, and California already requires mandatory fees to be included in the advertised price.
How much should I charge for shipping protection?
Most stores charge either a flat fee or a small percentage of the order value. Start from your real claim rate and average order cost, then price so the fees cover claims with a margin. Price bands by order value keep the fee fair on both small and large carts.