UPS’ Guaranteed Service Refund (GSR) and FedEx’s Money Back Guarantee are refund policies that promise a 100% refund on shipping charges for select service types if a parcel is delayed by even 60 seconds. However, both carriers are increasingly showing an unwillingness to provide refunds for deficient service. This is evident in the convoluted refund process and short time window within which to claim refunds and in the eagerness carrier representatives display to have customers sign waivers of Guaranteed Service Refunds and Money Back Guarantees.
What are UPS’ Guaranteed Service Refund and FedEx’s Money Back Guarantee?
The UPS Guaranteed Service Refund and FedEx Money Back Guarantee are clauses that are part of the shipping contract and stipulate that these carriers will refund 100% of shipping charges if parcel delivery is delayed by even 60 seconds except in exceptional circumstances (natural disasters, weather delays, etc.).
Which Service Types are Guaranteed for Refunds by UPS and FedEx?
UPS guarantees on-schedule delivery of shipments shipped via the following services, where available, to all 50 states and Puerto Rico: UPS Air Services, UPS Hundredweight Service® Air Services, UPS 3 Day Select®, UPS Hundredweight Service® UPS 3 Day Select®, UPS Ground, UPS Ground with Freight Pricing, and UPS Hundredweight Service® Ground.
It also guarantees on-schedule delivery of shipments shipped via the following services, where available, and provided that customs clearance is performed by UPS Supply Chain Solutions® brokerage offices designated by UPS for clearing these shipments: UPS Worldwide Express Plus®, UPS Worldwide Express NA1®, UPS Worldwide Express®, UPS Worldwide Express FreightSM, UPS Worldwide Saver®, UPS Worldwide Expedited®, UPS 3 Day Select® from Canada, and UPS Standard.
FedEx Ground services that are eligible for the money back guarantee are FedEx Home Delivery, FedEx Ground, FedEx Date Certain Home Delivery, FedEx Evening Home Delivery, and FedEx Appointment Home Delivery.
FedEx also guarantees these international express services: FedEx International First, FedEx International Next Flight, FedEx International Priority, FedEx International Priority Freight, FedEx International Economy, FedEx International Economy Freight, FedEx International Priority DirectDistribution, FedEx International Priority DirectDistribution Freight, and FedEx International Premium.
The other FedEx services covered as part of the money back guarantee are FedEx First Overnight, FedEx Priority Overnight, FedEx Standard Overnight, FedEx 2Day, FedEx 2Day A.M., FedEx Express Saver, FedEx First Overnight Freight, FedEx 1Day Freight, FedEx 2Day Freight, FedEx 3Day Freight, and FedEx SameDay City.
How Do Guaranteed Service Refund and Money Back Guarantee Waivers Work?
UPS and FedEx representatives increasingly insist on shippers signing guaranteed service refund and money back guarantee waivers on their shipments. They typically offer small discounts of between 2 and 4 percent on shipments for a limited period of time to force their hand. These representatives insist that not signing the waiver will deprive the shipper of savings in shipping spend.
What is worse still is the fact that the right to guaranteed refunds is waived off within some contracts without the shipper even knowing. Here’s an excerpt from page 142 of the FedEx service guide for 2019.
Why Do UPS and FedEx Want Shippers to Sign Waivers?
Now the obvious question arises: Why are UPS and FedEx representatives so keen on getting shippers to sign refund waivers? Is it because they want to provide them with discounts of between 2 and 4 percent and further their clients’ bottom line?
Not at all.
The fact of the matter is that carriers like UPS and FedEx get to keep over 3 billion dollars in unclaimed refunds each year, and they want to keep it that way. This money rightfully belongs to retailers like you, but if you cannot claim your refunds because of a waiver, it works to the advantage of your carrier.
Carriers like UPS and FedEx get to keep over 3 billion dollars in unclaimed refunds each year, and they want to keep it that way.
Another reason for UPS and FedEx insisting on shippers signing refund waivers is because of their fear of accountability. The growth of automated shipping audit and refund firms like LateShipment.com has helped to bring transparency into the world of shipping and shed light on the numerous failings of carriers. The growing awareness of the shady practices of carriers has turned the tide against them and led to an increase in refund claims. This has proved to be inconvenient for carriers and getting shippers to sign refund waivers is a way for them to skirt their responsibilities.
What Are The Pitfalls of Signing a Refund Waiver?
Now that it is evident that signing waivers of UPS’ Guaranteed Service Refund and FedEx’s Money Back Guarantee only stands to benefit these carriers, let’s consider the ways in which you, the shipper, stand to lose because of them.
Firstly, good-quality service is a right and not a luxury. UPS and FedEx are duty-bound to provide you on-time delivery. Holding them accountable via refund mechanisms is your right. In a situation where a waiver has been signed, there would be nothing you could do to pull up UPS or FedEx for poor quality of service, and you would be in a helpless position. Your last mile would suffer in a big way.
This is the real cost of late deliveries: Customers who have experienced a bad delivery experience are less likely to shop with you again. So, even in a situation where you have done everything right up to the point of shipping, poor service from your carrier still ends up damaging the delivery experience for your customer.
Further, the meagre discounts that are promised at the time of signing a waiver are often superseded by add-on charges beyond the cost of shipping. The truth is that it is possible to obtain better discounts from carriers without having to resort to signing a refund waiver. Also, the discounts promised with waivers usually last a limited period of time. On the other hand, the waiver is permanent.
The meagre discounts that are promised at the time of signing a waiver are often superseded by add-on charges beyond the cost of shipping.
Another fact that should be kept in mind is that UPS and FedEx regularly hike their prices across service types. Meagre discounts will not help under such circumstances, and the increase in prices is all the more reason for these carriers to provide top-quality service.
What Can You Do to Avoid Falling into the Refund Waiver Trap?
At the end of the day, there are ways for you to avoid being forced to sign a waiver of your UPS Guaranteed Service Refund or FedEx Money Back Guarantee.
- Be prepared with comparative data about the services of various shipping carriers before negotiating a contract.
- Ask the shipping carrier representative to provide you an impact summary to detail how signing a refund waiver will affect your monthly shipping spend and how many packages will be affected.
- Before signing the contract, check to ensure that there is no clause waiving off your right to refunds.
A Little about LateShipment.com
We at LateShipment.com work hard to make “parcel shipping & delivery” transparent and help businesses be fully in control of their last-mile success.
Some of our high-impact offerings are:
- Automating refund claims from your shipping carriers for service failures to help you save money on shipping.
- Giving you full control over delivery delays that harm your brand and sales. You can now predict parcel delays and even fix them by keeping customers informed.
- Reporting at every stage of “shipping & delivery” to enable you with critical supply-chain insights.
The value we add to businesses is most evident when experienced first-hand. Learn more about our solution here.