Case #1: A package delivered to Chicago from a California appraiser via an overnight shipping service arrives without any visible damage to the outer box. However, when the recipient opens the box, an envelope inside has been opened and a ring enclosed at initial packing is missing.
Case #2: A supplier in New York ships 20 carats in diamonds to a relative in California. The package arrives with no signs of tampering, but almost four of the 20 carats are missing. The bill of lading was switched to a new box and only a part of its contents was taken, possibly to help discourage serious investigation by the shipper. No insurance coverage was in effect.
Case #3: A package containing memo goods arrives, with no visible signs of tampering, at a retail store after overnight shipment by a New York diamond firm. When opened, a single packet of merchandise with a proper invoice is found. Later, the sender tells the recipient that two packets of merchandise with two different invoices were originally enclosed in that package.
Case #4: A package arrives in sound condition at a retail store in Texas, but the watches it held are missing. The sender requested the empty box and label be returned for further examination. Before shipping, the sender had placed a small, discreet mark on the box. Now he finds that mark is missing. The thief took the label, which was enclosed in a plastic pouch, from the original box and placed it on another.
Scenarios such as these occur numerous times daily in the jewelry industry and with ever-increasing frequency around the world. Jewelers’ insurance companies speak openly about the high volume of “transit” losses. One major firm says that for every dollar in premium they write to cover such losses, they lose $2.50.
Crime rings within shipping firms. Law enforcement sources attribute many of these losses to organized rings of employees within the shipping companies. At company hubs and delivery centers, employees, which can include supervisors, conspire as a group to steal jewelry goods.
Recent reports show that these in-house crime rings use metal detectors to help identify packages containing jewelry. When a package is located containing metal, it may be targeted for theft. Shipping labels with suggestive names or initials, or known jewelry industry zip code destinations or points of origin, such as 10036 (47th Street, New York), 60602 (Wabash Avenue, Chicago) or 90013 (Hill Street, Los Angeles), may tip off gangs that a package contains jewelry.
Stealing goods while inflicting minimal damage to the package holding them is done in many different ways. Common methods include:
Slitting a package open with a razor blade, removing the jewelry and carefully resealing the box with tape.
Replacing the package’s existing label with a new one that redirects the box to the address of an accomplice.
Removing only part of the package’s contents. This creates confusion and suspicion between retailers and suppliers, neither of whom may believe anything was stolen in transit. They often assume that the sender sent an empty box or less merchandise than is listed on the invoice. While that does occur, jewelers should be assured that the vast majority of reported transit losses are legitimate.
Lack of cooperation. The level of cooperation from shipping companies in investigating these losses and working with law enforcement and the jewelry industry varies. Sometimes individual security personnel at these shipping companies have been helpful and some regional offices responsive, but it’s usually very difficult for our industry to get attention from the shipping companies. Even the largest jewelry shippers complain of huge losses to shipping companies only to receive little or no satisfaction.
Most experienced high-volume shippers agree that U.S. Postal Service first-class registered mail is the safest form of shipping. USPS does tend to have losses, however, and sometimes is too slow. It recently raised its limits of insurance coverage for Express Mail packages to win business. An Express Mail package can now be insured for up to $5,000, up from its previous limit of $500 or $600.
A shipping program called One Service (1-800-401-SHIP) from the Holmes Protection Group offers overnight delivery and will insure each package up to $50,000 of declared value with no deductible. This service uses a combination of armed guard protection and shipment through Federal Express.
UPS and other overnight shipping services seem to experience cycles of losses, with one company or another falling in and out of favor because of numerous losses. That’s why frequent shippers who start to have losses often simply switch carriers.
A list of recommendations for shipping security appears on pages 82-85 of the JSA Manual of Jewelry Security. Some of JSA’s tips for shipping high-value or irreplaceable goods:
Use an armored courier service, such as Brinks.
Use initials instead of names and avoid words connected to jewelry or the industry on packages.
Using misleading labels that list non-jewelry goods.
Never ship an item in a package smaller than a shoe box or over a weekend.
Precaution the first defense. In response to recent crime trends, JSA suggests these additional precautions:
Make sure that the address label or air bill is firmly glued or attached to the package. Simply inserting the address label into a clear plastic sleeve or pouch allows a thief to easily replace them with new ones and divert the packages.
Use a return address that gives no indication a box may contain jewelry. Use your accountant’s or attorney’s return address, with their agreement. Try to list a destination that is not in a recognizable jewelry district, or devise alternative delivery arrangements, which might include pick-up at a shipper’s convenience center.
When shipping, mark your boxes with a discreet, unique symbol so that you can determine later if the package or box received is the same one sent.
Use special packaging tape like that made by Consolidated Graphic Materials (908-448-1400), which leaves a highly visible and unique mark when removed or tampered with.
But remember, none of these precautions can take the place of adequate insurance coverage for any shipment. In today’s shipping environment, losses are inevitable. Securing the highest appropriate coverage from the shipper, plus any additional coverage necessary from your insurance company, can reduce the cost of these losses to your business.