FedEx Money Back Guarantee Waiver
It’s true that FedEx and UPS guarantee the on-time delivery of your Ground and Express packages, but not every shipment is on time. If they deliver that FedEx Home Delivery package just 60 seconds late, you are entitled to a 100 percent refund of the shipping charges.
Here at Refund Retriever we have seen an increase in companies waiving the right to late delivery refunds. These Guarantethervice Refund Waiver, or GSR Waivers are often added into a shipping contract by a the carrier in exchange for a promised extra incentive or additional discount. We discourage these late delivery refund waivers since these incentives can usually be obtained without a waiver. Many times these additional discounts and incentives will never be realized. If it were advantageous for the shipper to waive their right to claim money back for late deliveries, the carriers would not be pushing for this!
Many FedEx and UPS shippers are misled into thinking they are required to sign a GSR Waiver when they are re-negotiating a new contract. The carrier presents these as necessary for shippers to achieve deeper discounts on shipping rates, or simply to be in good graces with the carrier.
Should I sign the GSR waiver?
What is accountability? Accountability is the obligation of an individual or organization to account for its activities and accept responsibility. Without the ability to get a refund on a guaranteed delivery, you cannot hold your FedEx or UPS accountable to the commitments outlined in your carrier agreement. Working with Refund Retriever ensures that accountability by securing qualified refunds on late deliveries and ensuring the on-time delivery to your customers.
How do I find a waiver in my contract?
FedEx almost always includes Guaranteed Service Refund (GSR) language in fine print, and there are two ways they typically bring it into the agreement. Look at your FedEx Contract under “MONEY BACK GUARANTEE AND OTHER PROVISIONS.” Do you see:
“Customer is entitled to request refunds under the Money-Back Guarantee Policy provisions of the FedEx Service Guide for all FedEx Ground services.”
“Customer is entitled to request refunds pursuant to the Money-Back Guarantee Policy provisions of the FedEx Service Guide for all FedEx Express services.”
If you see the above wording, you do not have a waiver and you are entitled to request refunds for late packages. But if you see the wording below, you cannot get any refunds.
As a shipper you need to pay close attention to this as the waiver can get slipped into the agreement and waive your right to refunds for 1-5% of your entire transportation spend. The over cost of transportation impacts businesses in everyday operations.
Why do they want me to waive my rights?
FedEx will sometimes offer additional incentives for waiving the right to claim late delivery refunds. This can be in the form of a 1-2% package rate discount on a certain service or a small discount on an accessorial fee for a certain amount of time.
However, this discount could be overshadowed by other fees causing you to never realize the benefits. To give you an idea, let’s say someone shipping a majority of lightweight packages with a 30% discount on Ground rates and an additional 2% discount for a late refund waiver, they should see a 32% discount on all packages. If they ship a 3 pound Ground package to Zone 5, the standard list rate cost is $10.12. Now let’s apply the 32% discount ($3.24 discount) so the shipper should only pay ($10.12 – $3.24) $6.88 for that package. Remember that there is a minimum package charge, this part of your contract states the lowest amount you will pay is a Zone 2 one pound package which is $7.25. So there is $.37 worth of discounts that you are not realizing, including your additional 2% waiver benefits. Actual realized discount for this package is only 28%.
Say you get a discount on an accessorial fee, read the fine print because it will usually apply to only one year of that 2 year contract. After 12 months you are again paying full price AND the waiver is still in effect! If the waiver for GSRs applies to all service levels, you will be unable to recover credits for all missed commitments.
Why are carriers requesting a waiver?
Most companies like Refund Retriever that are in the professional auditing industry do much more than just get late delivery refunds. We can find other mistakes in your invoices; duplicate billings, erroneous Saturday fees, dimensional weight errors, packages manifested but never shipped (UPS voids), as well as other errors. FedEx knows that we rely on the credits from late delivery refunds in order to help provide additional resources to identify these additional billing errors. Without GSR credits, the identification of other mistakes is left solely to the shipper.
Refund Retriever can also help you analyze your shipping spend, show inefficiencies in your shipping, and help understand where your shipping dollars are actually going. A shipper that knows as much as FedEx and UPS about their own shipping matrix can cost the carriers millions of dollars a year.
Still want to sign that waiver?
If you think that the additional benefits of waiving your right to these refunds is greater than keeping your rights, make sure to quantify the savings if possible. Have your carrier representative provide an impact summary so you know how many packages will receive this additional discount. How much will this save you each month, your FedEx rep can provide analytics.
What about potential unsatisfied customers calling with more late deliveries and problems? What happens during the next holiday season you have a regular customer call with a late delivery asking for a refund on her expedited shipping costs? She paid for next day delivery but it was delivered three days later, are you going to explain to her that you waived the rights to get a refund for her package in exchange for that 2% discount that is about to expire in January?
What does this all mean?
Proper negotiation and data analysis can produce these additional incentives while maintaining the right to hold them accountable for their delivery failures. Do not sacrifice service for price because it is your customer who suffers from the service failures.
If you have any questions or concerns regarding the GSR waiver or if you want more information about our contract negotiating services please don’t hesitate to contact us at (800) 441-8085 or email email@example.com.