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Retail Shipping: Late Delivery by UPS and FedEx Entitles Your Business to Refunds

May 6, 2019 5:56:00 PM

Packages aren’t the only thing that can fall through the cracks – a retailer’s rights can too. Too many businesses are unaware of the refunds they may be entitled to if their parcel carrier underperforms.

How well do you know the contract you have with your parcel carrier? The answer to that is the difference between losing money and having more of it come your way. A staggering $2 billion is wasted on unclaimed shipping refunds every year – and the worst thing is, some retailers choose to give them up!

Why would they choose to forgo a refund? In the first of a two-part series, we’re alerting retailers to FedEx and UPS contract exceptions that could cost them dearly without their knowledge.

How retailers may be missing out on carrier refunds

The first thing a carrier may try is to convince a retailer that waiving refunds is in the retailer’s best interests. They do this by offering such things as incentives and discounts, which may seem attractive at first glance but don’t compare to the return a refund would offer. A retailer may think in terms of the long game and see the discounts and incentives as paying off more over time, but they don’t.

Around five percent of packages arrive late, meaning retailers who waive refunds are losing 10 potential paybacks out of every hundred orders shipped. The fine print of a carrier contract will reveal whether you’ve signed away your right to a refund knowingly or unknowingly. Even if you haven’t waived your rights, parcel carriers aren’t exactly willing to give a refund happily.

“This guarantee can be suspended or revoked at our sole discretion without prior notice to you,” is the first line of the FedEx Money-Back Guarantee. It’s not much of a guarantee if it can be paused or removed at any time.
To be fair, though, there are exceptions to getting a refund where late delivery is out of your carrier’s hands. Harsh weather or customs holdups can delay a package, and there’s nothing a shipper can do. The same applies if a customer refuses receipt of a package or if transportation networks are disrupted. UPS or FedEx can claim refund immunity in those circumstances.

Easy-going customers and legitimate shipping refund requests can cost you

There are also cases where a customer isn’t troubled by the fact that their package is late. When those customers cheerfully take delivery without complaint, the retailer has no idea their parcel carrier let them down (and neither FedEx nor UPS are likely to confess). This unreported failure may happen many times over a year without the retailer ever knowing. Those lost refunds add up.

There’s also an element of role reversal that many retailers are unaware of. Parcel carriers are on a timeframe once a package is tendered to the driver. If they fail and retailers discover they’re eligible for a shipping refund, however, it’s the retailer who’s now on the clock. They have 15 days to contact UPS before the opportunity for a refund is lost.

Here’s another example of the kind of cash drain your parcel carrier may cause. The UPS Terms of Service for 2019 tuck a hidden cost away in Item 38 – “Tracking/Tracing and Refund Request Charge” (page 18). If a shipper even requests information on a delivery, they get charged by UPS, depending on volume. If it turns out UPS did their job, the shipper gets charged again.

You may be wondering how retailers are supposed to keep tabs on every package. Do they have to call every customer and double-check that a shipment arrived on time? No, they don’t – they simply hire 71lbs to keep a close eye on their parcel carrier from start to finish.

We’re here to put shipping refund opportunities in plain sight

A partnership with us is simple: We fully audit your shipments and you receive the refunds you are entitled to. Take another look at the FedEx “guarantee” – there’s a five-step process a retailer must go through before nailing down a time of delivery. In addition, the UPS service terms state that a shipper must contact them to chase down proof of delivery. Few companies have the time to do this consistently while running their business.

Jumping through those kinds of hoops is a put-off for businesses who can’t spend the time or don’t want the hassle. 71lbs can help to keep the parcel carrier honest by monitoring your shipping activity. We do it in many ways that make your life easier and richer. We’ve saved some of our clients thousands of dollars – and that’s per month.

No retailer wants their customers receiving late packages, but if “late” really means “100 percent refund,” it removes some of the sting. Don’t miss our next post, when we’ll be looking at more issues retailers often mistake for exceptions when they’re not.

At 71lbs, we uncomplicate the shipping process for our customers, making it easier and faster for them to access refunds and reduce their expenses. Our automated platform gathers all your shipping information into one easy-to-use custom analytics dashboard. Drop by the contact page to get in touch.

Topics: Carrier Agreements, Contract

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