Accountability at Stake: Will UPS and FedEx Get Rid of Guaranteed Service Refunds?

Spend Matters welcomes another guest post from Jon Winsett of NPI, a spend management consultancy focused on eliminating overspending on IT, telecom and shipping.

If you’ve renegotiated your UPS or FedEx contract lately, you may have noticed that both carriers are trying to eliminate Guaranteed Service Refunds (GSRs) from their agreements. These refunds represent the contractual obligation that UPS and FedEx have to their customers to deliver shipments on time.

Rather than being held accountable to a service standard, they are offering shippers incentives to do away with the GSR altogether. In some cases, they are attempting to add contract language stating that as long as they maintain an agreed-upon delivery rate, shippers can’t request a late delivery refund.

This attempted change in policy comes just as same-day delivery and free shipping options are recalibrating consumer and business expectations. Expedient, reliable and cheap (or free) shipping is no longer a premium offering. It’s what’s expected from today’s shippers – especially retailers.

A recent study from showed that 73 percent of consumers are more likely to shop online at a website that offers free shipping. In another survey from comScore and UPS, 41 percent of shoppers said “receiving my product when expected” led them to recommend a retailer.

Interestingly, the very carrier that commissioned such a survey wants to take the teeth out of their accountability for this important element of the consumer experience.

Shipping delays aren’t acceptable – ever. Revenues and customer satisfaction are on the line. If your carrier doesn’t deliver shipments on time, you are entitled to a late delivery refund every time. Any attempts to change this contractual obligation should be blocked.

We’d like to hear from the readers here at SpendMatters. Have you experienced this “no-GSR offer” from UPS or FedEx?

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First Voice

  1. Robert Villano:

    Neither FedEx nor UPS are suspending their policies regarding “money back guarantees”. They are, however, understandably negotiating waivers in exchange for the deepest discounts in larger accounts to offset the cost of frivolous MBG claims. This is particularly true where third parties are involved and often file erroneous claims, adding unnecessary cost. These waivers in no way impact service or accountability. In the end, service rules.

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