UPS Partially Reinstates Money-back Delivery Guarantee – With A Twist

UPS Inc. UPS confirmed Monday that it has reinstated money-back delivery guarantees on packages moving under its three next-day air delivery products. However, UPS said it has loosened the deadlines on its next-afternoon air deliveries to make it easier to meet its service commitments without being penalized.

In a message posted on its website, Atlanta-based UPS said that air deliveries that are typically made during the next afternoon can now be delivered by 11:59 p.m. and still meet the service guarantee. The company did not state in the message what its prior deadline was, but an industry source said it was 3 p.m. The next-afternoon air delivery product primarily supports UPS' business-to-business (B2B) customers.

FreightWaves reported on the service reinstatement last Thursday.

The policy change, which took effect Monday, will apply to UPS' Early A.M. air delivery product, which promises deliveries by 8 the next morning; its next-day air product, which guarantees deliveries by 10:30 a.m.; as well as the next-afternoon delivery product, known as Saver.

In addition, UPS has reinstated money-back guarantees on a slew of international express delivery products. It has not restored money-back guarantees on any of its other product lines.

UPS suspended its money-back guarantees in March 2020, citing unprecedented market conditions due to the COVID-19 pandemic. Rival FedEx Corp. FDX, which also suspended its service guarantees at the time, has not reinstated its program.

UPS and FedEx have excellent delivery performance records, hitting their targets roughly 98% to 99% of the time. Still, given the two carriers' massive volumes — UPS delivers about 17 million daily packages — even a 1% to 2% blemish translates into big bucks should every shipper whose deliveries weren't made on time file claims that the carriers couldn't dispute.

The program also represents a fertile revenue source for parcel consultants that shippers retain to analyze carrier performance, identify problem shipments and collect a cut of any refunds granted to the shipper.