UPS Inc. (NYSE:UPS) will partially reinstate its money-back guarantees for late or missed deliveries, effective April 5, according to people familiar with the matter.
For now, the Atlanta-based company will resume its “guaranteed service refunds” program for its three next-day air delivery products: Early A.M. deliveries by 8 a.m., next-day air by 10:30 a.m., and next day air saver by mid-afternoon, according to one of the people. The policy shift will not extend, at least for now, to UPS’ ground-parcel delivery services.
UPS declined comment.
The company suspended its money-back guarantees in March 2020, citing unprecedented market conditions due to the COVID-19 pandemic. Rival FedEx Corp. (NYSE:FDX), which also suspended its service guarantees, has not reinstated its program.
UPS and FedEx have sterling 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.