What are FedEx service guarantees?
FedEx (and UPS) offer 100% refund on shipping fees if deliveries arrive later than their scheduled time. These guarantees make shippers confident that they will get their money back if the packages are not delivered on time.
When you ship a parcel with FedEx (Ground or Express), it comes with a money back guarantee to be delivered on-time. This means if the package misses their committed delivery time by even 1 minute, FedEx will refund or credit your shipping charges.
In the retail and eCommerce business, on-time delivery is fundamental to success. You pay hefty shipping fees to FedEx and UPS to ensure the package reaches them without any delay.
In fact, many customers expect a discount or refund on shipping costs for delivery delays. This means late deliveries can both negatively affect your business financially, and your business reputation.
In this article, we’ll discuss FedEx and UPS service guarantees, and how you can minimize your shipping costs when these carriers don’t meet their delivery promises.
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FedEx Money Back Guarantee
The FedEx money back guarantee was reinstated from Jan. 17, 2022 onwards for many FedEx Express services for U.S. domestic and U.S. export shipments. These include:
FedEx First Overnight®
FedEx Priority Overnight®
FedEx Standard Overnight®
FedEx First Overnight Extra Hours*
FedEx Priority Overnight Extra Hours*
FedEx Standard Overnight Extra Hours*
FedEx International First
FedEx International Priority
FedEx International Priority Express
FedEx International Priority Freight
*Contract services only applicable to FedEx account holders.
The FedEx money back guarantee remains suspended on all other services including FedEx Express, FedEx Ground, FedEx Freight, and FedEx Office until further notice. Read the FedEx Service Guide for more details.
FedEx Service Guarantees Since COVID-19
In March 2020, at the onset of the COVID-19 pandemic, FedEx suspended its money back guarantee for all FedEx Express, FedEx Ground, and FedEx Office services citing safety issues and logistics disruptions.
Before the pandemic, FedEx offered money back guarantees up until a few days before heading into the holiday season. However, suspending guarantees during peak season from almost all FedEx services was unusual for shippers.
In January 2021, FedEx reinstated the money back guarantee for select express services (U.S. domestic, and import and export shipments).
“The status of the money-back guarantee for these FedEx services and additional FedEx services worldwide is being evaluated on an ongoing basis, and our focus remains on continuing to provide the best possible service to our customers during this period of uncertainty.” – Source: FedEx
What about UPS service guarantees?
The carrier reinstated service guarantees from April 5, 2021 onwards for the following services.
UPS Next Day Air® Early
UPS Next Day Air®
UPS Next Day Air Saver®
UPS Worldwide Express NA1®
UPS Worldwide Express Plus®
UPS Worldwide Express®
UPS Worldwide Express Saver
UPS Worldwide Saver®
UPS Worldwide Express Freight® Midday
UPS Worldwide Express Freight®
The carrier reinstated the guaranteed refund from May 10, 2021 onwards on service failures such as late deliveries for the following International Domestic services and Transborder Express services for select countries outside of the U.S.:
Domestic Express Plus
Domestic Express Saver
Transborder Express Plus
Transborder Express Saver
Note that the UPS Service Guarantee remains suspended for all other UPS service levels.
UPS announced that it will extend its delivery commitment times from October 18, 2021 onwards for UPS Next Day Air destined to residential locations from 10:30 AM to 12:00 PM.
UPS Service Guarantees Since COVID-19
UPS suspended its service guarantees (including small parcel guarantees) on March 24, 2020 in response to the COVID-19 pandemic.
In October 2021, UPS changed the delivery commitment times for the UPS Next Day Air service.
In April 2021, UPS reinstated the service guarantee for select services.
“As the effects of the Coronavirus impact our infrastructure, we will continue to seek guidance from local, state, and national government entities to ensure that we fully align with their regulations. We are committed to continue operating globally except where constrained by government restrictions.” – Source: UPS
The Impact of Suspended Service Guarantees on SMBs
Prior to April 2020, you could claim a full refund of your money if UPS or FedEx failed to deliver your packages. These refunds could help you recover some of your shipping expenses.
But after the suspension of service guarantees, FedEx and UPS also imposed peak surcharges, additional fees, and caps on volume for large shipping companies. This can hurt retailers and eCommerce businesses financially.
This along with the disruptions in domestic and global supply chains resulted in thousands of dollars in losses for small and medium-sized businesses. As a result, companies faced disruptions in their day-to-day business operations.
However, FedEx and UPS reinstated service guarantees in April 2021 for select services, enabling shippers to utilize service guarantees in case of delayed deliveries.
How to Use Guarantees to Optimize Shipping Costs
Major shipping carriers like FedEx and UPS offer refunds if they fail to make deliveries within the promised time.
However, this money back guarantee is not automatic, as shippers have to initiate the refund process by providing package details including tracking number, the delivery date, origin and destination of the package, and scheduled date and delivery times.
Many eCommerce businesses and shippers alike find it difficult to track and follow up with service failures, and claim the money that they are eligible to receive. Filing the claim is your responsibility, and failing to do so could mean leaving money on the table.
You can either choose to audit your shipments yourself or outsource this responsibility to a refund recovery service provider. These companies have automated systems for auditing invoices, monitoring late deliveries, and filing claims with shipping carriers on your behalf.
Most shippers don’t realize that they miss out on thousands of dollars of recoverable funds by not filing claims. Successfully pursuing and recouping these funds can allow you to offer cheap shipping to your customers or reinvest it in your business. Learn more about gaining potential refunds for your business with Sifted.
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Automate your logistics operations with Sifted’s Logistics Intelligence
With FedEx and UPS delivering tens of billion dollars worth of cargo each year, it’s not hard to see that delays do happen at a fairly high rate. As a business owner, you have to take the initiative to monitor your shipments, file claims for late deliveries, and recover the money you are entitled to receive.
Sifted’s logistics intelligence solution can organize your shipping data to find areas for savings for your business. And their parcel audit solution automatically tracks late deliveries and then files claims and recovers funds on your behalf.
Ready to automate your logistics operations? Get a demo with Sifted today!