Categories: General
      Date: Jul 22, 2009
     Title: Ask The Lawyer

“I paid for the shipping and the insurance, so weren’t the contents of the package legally mine and the insurance proceeds?”

    Question:  I bought something off of the Internet.  I paid via Pay Pal and the payment included the cost for shipping and insurance.  When the package never arrived, I notified the seller.  I had a tracking number so I kept up with it at the P.O.  The package was never located, but the seller received the proceeds from the insurance.  All of that took months, and the seller will not return the money I paid him.  What I am wondering is when someone puts something in the mail addressed to another person, who owns the package while it’s in transit?  I paid for the shipping and the insurance, so weren’t the contents of the package legally mine and the insurance proceeds?

Answer:  Once a package or letter has been placed into the mail it is no longer owned by the sender, but by the recipient.  The owner retains a possessory interest in the mailing in the event it is undeliverable, but the recipient is the owner.  While the package is in transit, it is also owned by the recipient.  A person who places an item in the mail can’t actually retrieve the item.  Anyone who has ever placed a letter in the mail only to desire to get it back would have been told they cannot.  

The problem is with the purchase of the insurance.  The insurance policy is owned by the person who actually purchased the insurance, or the seller in this scenario.  It is also for the benefit of the purchaser/seller in the event of loss.  If the package is found by the P.O. it does not get returned to the sender unless the recipient cannot be located, such as they moved, gave an incorrect address or the like.  The sender retains the possessory interest in the package until it is delivered.  In the event it is never delivered, the possessory interest continues until the package is returned to the sender.  

A person facing this particular problem has a claim against the sender who received payment in full, but no goods were delivered.  That is true even if the package was lost without the benefit of insurance.  The insurance is the windfall of the sender, but not the money received for the item in the first place.  The recipient is not entitled to receive the money back for shipping or the insurance because the sender did use the allocated money for that purpose; however, the recipient is entitled to reimbursement of the cost of the item purchased but never received.

If the sender had not purchased insurance, the sender would be out the item when all is said and done.   The sender should return the money paid by the purchaser.  That is basically the purpose for the insurance.  In this instance, the insurance should not have been purchased for the seller to make money, but just to make sure (insure) that the seller isn’t out completely if the item is lost.  

The difficulty comes in collecting.  Several issues become obstacles in this scenario.  Items placed in the mail fall under federal jurisdiction and federal law applies.  If the seller lives elsewhere, especially out of state, then the distance becomes an issue.  If a claim against the seller is filed, it is the choice of the purchaser to choose where to file, which could include a federal court in either the purchaser’s place of residence or the seller’s.  Most people prefer to keep a lawsuit near to their home for convenience, but there could be reasons to file in the other location.  One reason would be if the seller has multiple lawsuits filed against him or her and the Judge in that area is familiar with the actions of the seller.  

The purchaser must make a formal written demand upon the seller for the return of the purchase price of the item.  Any documented evidence of the purchase or failure of delivery should be photocopied and attached to the demand letter.  That demand letter must be provided to a court of proper jurisdiction with any legal filing, so keeping copies is imperative.  The demand letter should be sent by certified or registered mail and require the signature of the seller upon delivery.  A good idea is to write right into the letter the certified or registered mail number and that the letter is also being sent by regular mail.  A duplicate copy by regular mail should be sent.

If a certified or registered letter is returned to a sender and marked “refused” or “unclaimed” it is the same as if it were “received.”  The seller could not claim that they never received the letter.  If a certified or registered letter is returned to the purchaser it should be left unopened for use later with the court.  A copy of an unopened certified or registered letter should be photocopied front and back and attached to any court filing as well.  The copy of the letter given to the court will state that the letter was sent both certified or registered mail and via regular mail.

The final problem is with whether or not the cost to file a claim against the seller is worth the cost of the item.  All efforts should be made to collect the money without court intervention, including contacting the bank that holds the purchaser’s credit or banking card.  In this scenario the failure to return the payment to the purchaser is fraud and the bank may credit the banking account of the purchaser, less a customary fee.

Another step that may be taken by the purchaser is to report the incident with a copy of all documentation to the Better Business Bureau, to Pay Pal and to the online selling agency.  Often online sellinh agencies allow purchasers to submit a review of the transaction, and a poor review can damage the overall rating of the seller.

This article is meant for informational purposes only and not as a substitute for sound legal advice.  Please direct all questions to Ask the Lawyer at