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Beware of This Hidden Trap in Your Parcel Shipping Contract

Parcel Shipping Contract Hidden Trap

Does your contract with your shipping carrier include a Money-Back Guarantee or Guaranteed Service Refund?

If so, review it as soon as you can, because these benefits can turn into traps.

Typically, these agreements mean the carrier promises to refund the cost of late shipments. Many carriers guarantee delivery by a specific time and promise refunds if packages are even a minute late. It’s a bold expression of confidence in the company’s on-time delivery rate, because carriers want shippers to believe these commitments are rock-solid.

But many contracts that include these guarantees also include blackout dates and exceptions that you may not have noticed. They’re usually hidden in fine print and appendixes.

If you look at your contract, you’ll likely find that FedEx and UPS waive these promises between Thanksgiving and Christmas. They extend the late-delivery window by 90 minutes or until the end of the day, and for many packages, they forgo refunds altogether — when they’re already hitting shippers with huge peak-season surcharges.

Have you waived your right to request refund credits? As you prepare for your next contract negotiation, scan the fine print of your agreement. Keep a close eye out for language that states whether you have waived your right to request a refund for late deliveries. If you need help, Reveel’s experts can show you where to look as you review your current contract.

Related: Shipping Rate Increases: What to Know and How to Save

FedEx’s Guarantee Exceptions

According to FedEx’s 2017 Money-Back Guarantee Policy, if packages were delivered within 90 days of the promised time on Valentine’s Day, the Friday before Mother’s Day, and the Wednesday before Thanksgiving, claims would be denied.

And between Dec. 18 and Dec. 23, as long as shipments were delivered by the end of the promised day, claims would be denied.

The Money-Back Guarantee was suspended for all FedEx Ground shipments between Thanksgiving and Christmas.

UPS’s Guarantee Exceptions

Like its competitor, UPS suspended its Money-Back Guarantee for all ground shipments between Thanksgiving and Christmas.

On the Wednesday before Thanksgiving and the week before Christmas in 2017, UPS extended its guaranteed delivery times by 90 minutes for Next Day Air Early and Worldwide Express Plus service. For all other domestic and international air services, delivery times were stretched to the end of the promised day.

What These Exceptions Mean for you

FedEx and UPS are publicly traded companies, and at the end of the day, their mission is to return value to their shareholders. We understand that. Further, we recognize that the holiday season is the busiest time of the year for every carrier. Daily package volume typically doubles between Thanksgiving and Christmas.

It’s logical to assume that their late package incidences double during this period, too — or rise even more, depending on how many drivers and door-to-door carriers they’re able to hire.

Waiving money-back guarantee policies during the holiday season acknowledges the reality that shipping is harder during the holidays.

But the holiday season is the busiest time of year for retailers, too, and even some manufacturers.

Most importantly, it’s when customers expect the highest level of service.

Plus, we know UPS and FedEx drive holiday profits with peak-season surcharges. FedEx bumps up its additional handling surcharge by $3, more than 25 percent, and tacks huge fees onto oversized and unauthorized packages. UPS adds small fees, ranging from 27 cents to 97 cents, on a week-to-week schedule between Thanksgiving and Christmas, but adds them to nearly every package.

Remember, if your contract includes blackout dates and exceptions to a Money-Back Guarantee, you cannot claim refunds for packages delivered late on those dates. And if you hire Reveel to help you audit invoices, we can’t do anything to help you during those periods.

Look for these clauses ahead of time and be straightforward with your carrier about what you expect. Hold your carrier to their contractual promises during the rest of the year by pursuing every refund you’re owed.

And consider trying to negotiate for fewer blackout dates or reduced holiday surcharges. After all, if your carrier boasts about promises of on-time delivery but waives it during the toughest time of the year, it sounds like they doubt their ability to meet their commitments — and you may start to doubt it too.