When a customer says their package never arrived, start with the tracking. If it shows the parcel still moving or stuck, the carrier has it and you wait, then open a search or claim. If it shows “delivered”, ask the customer to check the address, the neighbours and the mailroom before you refund or reship. Either way, reply the same day: a quick answer is your best chance of solving it before it reaches the customer’s bank.
Who pays depends on how you shipped. With insurance or included carrier coverage, the insurer or carrier may reimburse you. Without it, a refund or replacement usually comes out of your margin. If the customer files a chargeback instead, the bank decides, largely on your proof of delivery. Below is how each path works, checked against Shopify, Stripe, PayPal, USPS and Canada Post pages on October 21, 2026, plus a cost model showing what one missing order really costs.
Step 1: Read the tracking status before you answer
“Package never arrived” covers several situations, and the tracking page tells you which one you have.
In transit, but past the expected date Delayed, missorted or lost in the network Tell the customer you are on it. Open a carrier search once the carrier allows it (USPS: 7 days after mailing; Canada Post: after the expected delivery date).
No scans after the label was created The parcel may never have been handed over, or the first scan was missed Check your own shipping area and pickup records first. Then contact the carrier.
Delivered Left at the wrong door, taken in by a neighbor or mailroom, stolen, or still on its way to the customer inside a building Confirm the address on the order, ask the customer to check around the delivery spot, then open a carrier inquiry if it is still missing.
Held at customs or returned to sender Not lost; the parcel is waiting for action Tell the customer where it is and what is needed.
Decision table by E-commerce Partners. Carrier timing from usps.com “Missing Mail and Lost Packages” and Canada Post “Claims: Missing packages”, checked October 21, 2026.For “delivered” parcels, pass on Canada Post’s advice to recipients: review the address, search the property, ask everyone in the household, and check tracking to see whether someone signed. For apartments and large buildings, it notes that “Some time may pass before the mailroom delivers the package to you.”
Who pays when a package goes missing
There is no single rule. The answer comes from four places: your carrier’s coverage, any insurance you bought, your payment provider’s dispute process, and your own refund policy. Consumer protection laws in your province or state can also apply; this article does not interpret them.
Lost in transit, label insured The insurer or carrier reimburses you, up to the coverage, if the claim is approved
Lost in transit, no coverage You, if you refund or reship
Shows delivered, customer says it is not there You, if you refund or reship; in a dispute, the bank weighs your delivery evidence
Customer files a chargeback The bank decides; you lose the sale and the fee if you lose
Customer opens a PayPal claim PayPal may cover you if the order meets Seller Protection requirements
Summary by E-commerce Partners from the Shopify, Stripe, PayPal, USPS and Canada Post pages listed in the sources, checked October 21, 2026.One detail catches Canadian merchants out: Canada Post says “only senders can request and receive claims payments”, so the customer cannot claim for you.
What one missing order costs you
The cheapest outcome is usually the one you control. Here is a hypothetical $60 order with a $22 product cost, an $8 label and Shopify’s US Basic online card rate of 2.9% + 30 cents ($2.04). These costs are assumptions for illustration. Two facts from Shopify shape the numbers: when you refund, “the original credit card processing fee isn’t reimbursed”, and a chargeback costs $15 USD in the US (returned if you win).
Delivered normally $27.96 $0.00
You reship a replacement minus $2.04 $30.00
You refund in full minus $32.04 $60.00
Customer files a chargeback and you lose minus $47.04 $75.00
Customer files a chargeback and you win $27.96 $0.00 (plus your time)
Hypothetical model by E-commerce Partners. Card rate from shopify.com/pricing; refund fee rule and $15 chargeback fee from Shopify Help Center, checked October 21, 2026. Calculated in Python by formula and re-checked with a line-by-line ledger; both matched.Reshipping costs half as much as a refund here because the product and label are a small share of the price, so a replacement is often the better first offer. A lost chargeback is the worst result, so a fast reply that keeps the customer away from their bank is worth more than a perfect evidence file. When product cost is high, the gap narrows and a refund can be simpler.
If you want to see how a loss like this eats into your margin across a month, our guide to gross margin, contribution margin and net profit shows where it belongs in your numbers.
Is shipping insurance worth buying?
It depends on how often your parcels go missing and what each order is worth. Shopify Shipping sells insurance on US labels, administered by Shipsurance, at $0.89 USD per $100 of coverage for domestic shipments and $1.29 for international, bought in $100 steps. It covers “loss, theft, or damage”. If your store is on the Grow, Advanced or Plus plan with Shopify Payments activated, Shopify includes up to $200 USD of insurance on each eligible label at no extra cost, so check your plan before paying for more.
Paid insurance is worth it when premiums cost less than the claims you would collect. Because coverage comes in $100 steps, a $60 order pays the same $0.89 as a $100 order. The break-even test: divide the premium by the order value. If a larger share of your parcels goes missing, insurance pays for itself.
$30 $0.89 2.97%
$60 $0.89 1.48%
$100 $0.89 0.89%
$150 $1.78 1.19%
$250 $2.67 1.07%
$500 $4.45 0.89%
Model by E-commerce Partners using Shopify’s published rate of $0.89 per $100, checked October 21, 2026. Assumes an approved claim pays the order value; check what the policy actually reimburses.Applied to 1,000 hypothetical $60 orders, insuring every one costs $890. At a 0.5% loss rate (5 lost parcels), claims would return about $300, so you would be $590 better off without insurance. At 2% (20 lost parcels), claims would return $1,200 and insurance comes out $310 ahead. The loss rates here are scenarios, not industry figures; use your own count of missing parcels over the last few months.
A practical middle path: skip paid insurance on low-value orders and insure or require a signature on high-value ones. Stripe’s dispute advice agrees: “for high-value products consider requiring a signature upon receipt.”
How to file a claim with the carrier or insurer
Where you file depends on who covers the label. Shopify’s shipping claims page says USPS, Canada Post and FedEx claims go to the carrier directly and are not tracked by Shopify. Shipsurance claims, and claims for carriers like UPS, start from the order in your Shopify admin.
USPS Priority Mail Express 7 days after mailing 60 days after mailing Sender or recipient (insured mail)
USPS Priority Mail and Ground Advantage 15 days after mailing 60 days after mailing Sender or recipient (insured mail)
Canada Post, domestic After the expected delivery date 90 days from shipping Only the sender is paid
Canada Post, to the US or international (Xpresspost, Tracked Packet) 1 day after the expected delivery date 6 months from shipping Only the sender is paid
Shipsurance (bought through Shopify Shipping) 24 hours after shipping, for most shipments 120 days from the ship date The merchant, from the Shopify admin
From usps.com “File a USPS Claim: Domestic”, Canada Post “Claims: Missing packages” and Shopify Help Center “Shipping insurance”, checked October 21, 2026.To file a Shipsurance claim in Shopify (path checked October 21, 2026): open the order, go to the fulfillment card, select File shipping claim, then choose Shipsurance and complete the form with the claim amount, payout details and contact information. If a label has both insurance and carrier coverage, Shopify says to file with Shipsurance, not the carrier. Shopify does not handle insurance claims itself; questions go to Shipsurance.
What to have ready for any claim:
- The tracking number and the label or mailing receipt.
- Proof of value, such as the invoice or order receipt. USPS asks for a sales receipt, paid invoice or similar.
- The customer’s name, address and the date you last heard from them. Canada Post asks senders to confirm they contacted the receiver about the missing parcel.
Canada Post includes base coverage of CA$100 on many services and pays the lowest of the item’s value, the insurance bought or the service’s included coverage. For USPS, check your label receipt for any included insurance.
If the customer files a chargeback instead
Visa, Mastercard and American Express each have a reason code for this: Visa 13.1 “Merchandise or Services Not Received”, Mastercard 4855 “Goods or Services Not Provided” and American Express C08, per Stripe’s reason code guide. On Shopify Payments, the disputed amount and the $15 fee are withdrawn right away, you usually have 7 to 21 days to respond, and the bank can take up to 75 days to decide.
For a “product not received” chargeback, Shopify says to contact the customer first. If you sort it out, ask them to drop the dispute and include their agreement in your response. If not, submit evidence that the customer received the product: fulfillment date and time, the billing details used, and shipping and tracking information. Shopify uploads a PDF of the fulfillment events for you.
Stripe’s guidance adds what makes that evidence persuasive:
- A matching address. The shipping address should match a billing address verified by the card’s address check (AVS), or be a business connected to the cardholder.
- Proof of delivery, not just shipment. Tracking details, carrier confirmation or a signed delivery receipt.
- Timing. If the agreed delivery date has not passed yet, say so. That alone can overturn the dispute.
- Your messages. Include your exchange with the customer, or state that they never contacted you first.
A “delivered” scan to the right address is your strongest card, but it is not a guarantee: the cardholder’s bank decides the outcome. That is why the cost table above treats a fast refund or reship as a real option, not a surrender. For the full dispute timeline, see what happens when a customer files a chargeback on Shopify, and keep an eye on your totals with our guide to chargeback ratio limits, because every dispute counts toward them, won or lost.
PayPal orders work differently
If the customer paid with PayPal and opens an Item Not Received claim in PayPal, Seller Protection can cover you, but only with proof of delivery. PayPal’s Seller Protection policy (last updated January 26, 2026) defines that as documentation from the shipping company with an online, verifiable tracking number, a “delivered” status and date, and a recipient address matching the shipping address on the Transaction Details page. Shopify’s PayPal page adds that signature confirmation is required for orders of $750 USD or more. PayPal also says Item Not Received claims that come from a buyer’s card issuer chargeback are not covered.
A reply to send the same day
A short, specific reply buys you the time the carrier needs, and it creates the customer communication that Shopify and Stripe both say to include if a dispute follows. Here is a template you can adapt:
Hi [name], thanks for letting us know, and sorry your order hasn’t turned up. Tracking shows [status and date]. Could you check [the delivery spot, with neighbours, or with your building’s mailroom]? We’ve also opened a search with [carrier]. If it hasn’t appeared by [date], we’ll send a replacement or a refund, whichever you prefer. You don’t need to do anything else; we’ll update you by [date].
Give a date and keep it. Our guide to using AI to draft customer email replies shows how to template replies like this safely.
Common mistakes
- Refunding before you look at tracking. A parcel held at customs or delayed by a day is not lost.
- Reshipping and refunding. Decide on one remedy, write it in the order notes, and cancel the claim if the original turns up.
- Shipping to an address the customer changed after checkout. It weakens your dispute evidence, and on Shopify Protect orders it voids coverage.
What you should check next
- Count how many parcels went missing over the last three to six months and divide by orders shipped. Compare that rate with the break-even table.
- Check your Shopify plan and whether included insurance applies to the labels you buy.
- Decide a value threshold above which you require a signature or buy insurance.
- Write a lost-parcel line into your shipping policy: when you will reship or refund, and how long the customer should wait first.
Frequently asked questions
How long should a customer wait before reporting a lost package?
Use the carrier’s timing. USPS accepts Missing Mail search requests from 7 days after mailing. Canada Post says most domestic packages arrive no later than 5 business days after the expected delivery date.
What if the package turns up after I reship or refund?
Ask the customer to return the extra item with a prepaid label or pay for it, and log their answer in the order notes. If you filed an insurance or carrier claim, update or withdraw it.
What about orders shipped with UPS or FedEx labels from Shopify?
Shopify’s shipping claims page says FedEx claims are filed with FedEx directly, while UPS claims in the US and Canada are submitted through Shopify Support from the order page, which files with the carrier for you.
Does Shopify Protect cover lost packages?
Shopify describes Shopify Protect as reimbursing fraudulent chargebacks on eligible US Shop Pay orders. Its help page does not mention not-received claims, so do not count on it for a lost parcel.
The takeaway
Answer fast, read the tracking, and pick the cheapest remedy you can live with. For low-value orders, a reship usually costs half of a refund and far less than a lost chargeback. Insure or require a signature on orders where one loss would hurt, and file carrier claims inside their windows.
Sources
- Shopify Help Center, “Chargeback reasons”. help.shopify.com
- Shopify Help Center, “Chargeback process” (fees, deadlines). help.shopify.com
- Shopify Help Center, “Preventing chargebacks”. help.shopify.com
- Shopify Help Center, “Refunds” (Shopify Payments processing fees). help.shopify.com
- Shopify Help Center, “Shipping insurance”. help.shopify.com
- Shopify Help Center, “Shipping claims”. help.shopify.com
- Shopify Help Center, “Protecting orders with Shopify Protect”. help.shopify.com
- Shopify Help Center, “PayPal Seller Protection”. help.shopify.com
- Shopify, “Pricing” (US online card rates). shopify.com
- Stripe Docs, “Dispute reason codes”. docs.stripe.com
- Stripe Docs, “Dispute reason code categories” (product not received). docs.stripe.com
- PayPal, “PayPal’s Seller Protection Program” (last updated January 26, 2026). paypal.com
- USPS, “Missing Mail and Lost Packages”. usps.com
- USPS, “File a USPS Claim: Domestic”. usps.com
- Canada Post, “Claims: Missing packages”. canadapost-postescanada.ca
- Canada Post, “Find a missing package showing as Delivered”. canadapost-postescanada.ca
Last reviewed: October 21, 2026. Fees, insurance rates, claim windows and dispute rules are as published by Shopify, Stripe, PayPal, USPS and Canada Post on that date.
How this article was made: researched and drafted with AI assistance, with every factual claim checked against the sources above. The $60 order costs, the 1,000-order loss scenarios and the assumption that an approved insurance claim pays the order value are hypothetical models, not observed results.
Related guides
- What happens if a customer files a chargeback on Shopify?
- Friendly fraud is rising: what merchants can do
- What happens if Shopify holds your payout?