Is Offering Package Protection Worth It for Ecommerce Brands in 2026?

How often are packages stolen or lost? And how to prevent it

Once your customer clicks "buy," their anxiety sets in.

And for good reason. Between checkout and delivery, a package is vulnerable to loss, theft, or damage. More than 104 million packages are stolen or go missing across the US in 2025, worth over $15B consumer loss.

Besides theft, packages can go missing for plenty of reasons. Automation errors, lost in transit, and inaccurate addresses. A huge factor is simply high volume seasons like BFCM when USPS and other couriers face overload during peak season.

When that happens, brands are stuck with a bad choice: absorb the cost of replacing and reshipping the order, or hand the customer a confusing, high-friction resolution process. That's where package protection comes in.

What is package protection?

Package protection, often called shipping insurance or order protection, is an optional coverage customers can add at checkout. It covers the cost of replacing or refunding an order that's lost, stolen, or damaged in transit.

It's worth being precise about how this fits into Loop's platform, because the two products get confused often: Package Protection is the coverage itself, and Checkout+ is the fee mechanism that delivers free returns. They're built to work together. Adding Protection to a Checkout+ offer increases both the opt-in rate and the size of the fee, which means more revenue on top of the return-cost coverage Checkout+ already provides. Brands that only run one or the other are leaving money on the table.

Protection pays for itself, then adds new revenue

A common worry with adding any fee at checkout is cart abandonment. In practice, well-positioned protection tends to have the opposite effect: it signals that a brand has already solved the worst-case scenario, which lowers the perceived risk of buying at all.

Across Loop merchants, Package Protection has covered more than 391,000 orders and collected over $1.24 million in premiums, all revenue that offsets delivery losses without raising product prices. Brands running protection through Loop's partner Seel have also seen ticket volume drop by 50%, since claims are resolved automatically instead of landing in a support queue.

The bigger opportunity shows up when protection is layered onto Checkout+. Xena Workwear saw 87% of its customers opt into Checkout+ with zero complaints, and kept roughly $34,700 in revenue over two months that would otherwise have gone out as refunds. Across Loop merchants generally, Checkout+ drives up to a 3% lift in checkout conversion, with opt-in revenue covering 100% of the average return shipping cost. Protection is what pushes that fee, and that opt-in rate, even higher.

Carrier coverage isn't the same as protection

Most carriers offer basic liability coverage, but it's narrow: it typically requires the merchant to file the claim, caps the payout well below the order's actual value, and can take weeks to resolve. A dedicated protection program puts the claims process in the customer's hands at checkout, pays out at the order's real value, and, when routed through an automated partner, resolves in a fraction of the time. For a brand fielding daily "where's my order" tickets, that difference is the whole point.

Turn a lost package into a repeat customer, not a lost one

When a package goes missing, the customer's experience with the brand takes the hit, not the carrier's.

Without protection: the brand tells the customer it's not their problem, or eats the cost of a reshipment.

With protection: the customer gets a clear, one-click resolution and a fast replacement.

That second experience is the one that keeps someone shopping with a brand again. Package protection turns a high-friction, high-cost support issue into a low-friction moment that builds trust instead of eroding it.

Two ways to run protection: keep the revenue, or hand it off

Loop merchants can run their package protection program two ways: DIY, or through Seel.

DIY puts brands in full control of the revenue their protection fees generate, building a margin buffer for replacing lost or stolen items while adding a new revenue line.

Seel hands off the entire claims process. Seel verifies claims and covers the cost of resolution, so the brand's support team never has to touch it.

Both models increase customer trust and conversion. Brands can also switch between them if their needs change.

Protection is stronger as part of the full post-purchase stack

Package protection is one piece of a larger post-purchase strategy. Loop Order Tracking keeps customers informed about where their package is, which reduces the theft risk that comes from packages sitting unclaimed. A self-service returns and exchange flow gives shoppers control when something doesn't work out. And Loop Intelligence surfaces the patterns behind returns fraud, sizing issues, and product flaws so brands can fix root causes, not just symptoms.

Paired with Checkout+, Package Protection turns a cost center into a revenue line: full coverage for customers, funded by the customers who want it, without adding a line item to the brand's own budget.

Curious what that could look like on your own order volume? See how Checkout+ and Protection work together.