UPS to maintain money-back guarantees for peak air service

For decades, FedEx and UPS offered money-back guarantees on late or missed deliveries as long as affected shippers could provide sufficient proof of the original service commitments.  However, both carriers suspended all money-back guarantees during the spring of 2020 as pandemic-related changes in buying behavior sent delivery volumes spiking and made it impossible for the carriers to honor all of their guarantees. 

Both subsequently reinstated money-back guarantees for next-day air services. However, they never restored any of their other guarantees.

Because ground deliveries are relatively low margin, the carriers have no financial incentive to restore money-back guarantees and risk relinquishing already thin profits on the business. The exception is for next-day air services, which carry much higher margins, some of which could be parted with.

No one following the industry expects either carrier to fully restore their service guarantees, partly because there is no overwhelming shipper pressure to do so. In addition, it can be costly and time-consuming for shippers to scour numerous invoices to unearth the proof the carriers generally require to issue a refund.

UPS has said publicly that its high on-time delivery rates — generally in the high 90% range — render service guarantees unnecessary. FedEx has never made such a public pronouncement.