UPS Inc. (NYSE: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.
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 core 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. (NYSE: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.