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Why incorporating GSR/MBG waiver in shipping contracts is a bad idea?

by BlogCost Optimization

On-time delivery of shipments is vital for shippers. Late parcel deliveries test a customer’s patience. At times, customer dissatisfaction leads to financial loss. With this in mind, shippers have a refund clause in their shipping contracts with the shipping carriers. Shipping carriers promise a refund for service failures such as late deliveries.

Approved late delivery refund requests save 100% shipping costs. But, in the past few years, FedEx and UPS are offering shipping refund waivers with incentives. Large shipping carriers are aggressively vouching for refund waivers. So, what are these shipping refund waivers? And, why should shippers not accept such Guaranteed Service Refund waivers? Read on for all this and more, in this article.

What are shipping refund waivers?

Shipping carriers like FedEx and UPS offer shipping refund waivers. Shipping refund waivers are clauses within the shipping contracts that provide discounts to shippers. These discounts are in return for waiving off the shippers’ rights to claim refunds. FedEx’s refund waiver is known as Money-Back Guarantee (MBG) waiver. And UPS’ refund waiver is known as UPS’ Guaranteed Service Refund (GSR) waiver. In addition, UPS and FedEx aggressively market these waivers to shippers for earning extra revenue.

Incentives in exchange for GSR waiver

Often shipping carriers offer discounts and incentives in exchange for signing an agreement with Guaranteed Service Refund waiver.  Shipping carriers who want GSR waivers entice shippers with attractive discounts during contract negotiations. The incentives include an additional package rate discount and small discounts in the accessorial charges for a short period. But, shippers generally don’t benefit much from these incentives, as there are other charges on the package.

Why should shippers not sign an agreement with UPS’ GSR or FedEx’s MBG waivers?

UPS’ GSR ensures the on-time delivery of all Ground and Express Packages.  When shippers sign GSR waivers, shipping carriers can no longer be held accountable for late deliveries. For instance, a parcel’s delivery time is the same day, but the delivery occurs the next day. The customer will hold the shipper responsible for the delay and not the shipping carrier. The shippers cannot demand a refund from shipping carriers on signing a GSR waiver. As a consequence, shippers face loss of revenue and customer dissatisfaction. That is why Audintel strongly suggests that shippers should not sign agreements with UPS’ GSR or FedEx’s MBG waivers.

Disadvantages of accepting shipping refund waivers

The disadvantages of accepting MBG waivers include lost customers, an increase in returned shipments, etc. Packages that are delivered late are a chief reason for shippers losing customers. Minimum service charges on each parcel eat away any discounts received on account of the GSR waiver. FedEx may offer an additional package rate discount with an MBG waiver. But, when FedEx applies minimum service package charges, these additional discounts will be negligible and lead to revenue loss. According to recent studies, waiving away MBG rights will cost shippers 1-5% of their entire parcel spend.

How can Audintel help?

Audintel has a well-experienced team of experts who are well-versed in contract negotiations. We compare the services of the shipping carriers before signing a contract. Audintel studies the fine print of each shipping contract with shipping carriers. We will help in getting you discounts while keeping the Guaranteed Service Refund clause intact. We ensure that our clients save more by not signing an agreement with a GSR waiver.

Services offered by Audintel concerning GSR Waiver

Audintel will never suggest a GSR waiver for its clients. We believe the credibility of the client will be affected by accepting the GSR waiver. When a GSR waiver is signed, shippers cannot question the shipping carriers for late deliveries. Shippers’ business gets affected due to delays in parcel deliveries. Shippers are in safe hands when they trust Audintel to manage their shipping portfolios. We not only track each parcel for late deliveries but also request for GSR. Our services help our clients receive the refund amount due to them. As well as enhance customer satisfaction bringing in more business for our clients.  Audintel holds the shipping carriers responsible for deficiencies in services. We can save at least 2-5% of overall parcel spend for our clients.

Late delivery refunds are essential for the small parcel industry. Late delivery refund claims save money for shipping companies. There is an estimate that over 3 billion dollars from unclaimed refunds are collected by UPS and FedEx when shippers sign GSR waivers. The refund amount belongs to shippers but, the amount remains unclaimed due to lack of auditing and claim processing. Shippers need professionals who can help them in monitoring their shipment portfolios at every stage. Audintel offers comprehensive audit services to clients, focusing on analyzing and optimizing shipping expenses to help you save money. As a trusted name in parcel service auditing and a SOC 2 compliant organization, Audintel ensure that your data is handled with the highest level of security and care. For further details, write to us at [email protected] or please visit our Audintel website, or contact us at +1 (619) 354 8539.

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Our top reasons for FedEx and UPS return shipments

by BlogTSM Services

Since early 2020, there has been an increase in online shopping worldwide. Online shippers want same-day shipping. Shipping companies and parcel carriers are scrambling to meet customers’ expectations. Nonetheless, some shipments do not reach the customers on time. Also, FedEx and UPS may return the parcels due to numerous reasons. This article will explore our top reasons for FedEx and UPS returns.

Cause for return shipments

Customers will have no use for holiday gifts after the holiday season is over. In short, your customer would like to return these parcels to the senders. Sometimes,  parcel carriers return packages. Shipping carriers cite many reasons for return shipments. We, at Audintel, found these top reasons for UPS and FedEx returns.

Our top reasons for UPS and FedEx returns

Incorrect address

A misspelled customer’s address or a wrong apartment number is the cause of most return shipments. In addition, if the recipient of the package has moved to another location, the address needs an update. FedEx and UPS both levy a hefty surcharge for address correction. The software solutions offered by Audintel identify these address corrections for our clients.

Package delivery refused or unclaimed

A cause of return shipment is when the recipient refuses to accept the package. Also, the recipient reschedules the delivery of packages and does not pick them up within five business days. The parcel is termed unclaimed and returned to the sender. At times, customers cancel packages and refuse the delivery. As a consequence, shippers lose shipping costs.

Improper documentation

For domestic US shipments, documents like commercial invoices, shipping labels, and tracking labels are necessary. An error in the documentation is a cause for return shipment by FedEx and UPS carriers. Until the documents are verified and error-free, the packages will be held at the carriers’ distribution centers.

Customs clearance documentation for international shipments

For FedEx and UPS international shipments, documents such as certificate of origin, commercial invoice, electronic export information, shipping labels, packing list are necessary. If shippers miss any documents or provide unverified documents, the package is on hold at the customs. Improper paperwork is a cause for UPS as well as FedEx return shipments.

Lack of valid proof of identification

FedEx and UPS return happen due to invalid proof of identification of the recipient. A driver’s license or a passport can give valid proof of identification. Even if someone else is authorized to receive the packages, the recipient should have valid photo ID proof.

Delivery delay by parcel carriers

FedEx and UPS have to refund money to the shippers when there is a delay in delivering packages. The delay could be due to various reasons. The parcel carriers face many service failures. The request for a refund from the parcel carriers is a long process. Audintel can help shippers in this regard. We had discussed this topic in our earlier blogs.

Non-delivery of restricted items

Hazardous materials like lithium-ion batteries, chemicals, fresh food, uncut gems, ammunition, etc., are restricted items according to FedEx and Ups policies. These items will face returns from FedEx and UPS to the senders.

Closure of businesses

Many businesses have shut down or temporarily closed in the past two years. In such a situation, FedEx and UPS have faced many return shipments.

Processing error

If there is labeling or a scanning error by FedEx or UPS, it is known as a processing error. The packages are redirected to the sender due to processing errors by parcel carriers. Shippers can contact FedEx customer service or UPS customer service for further details.

Weather-related delays

Severe weather conditions cause a delay in shipments. There is a rescheduling of the shipment delays for the next business day delivery. Customers may cancel the order, and return shipments occur. It leads to loss for shippers. In addition, shippers are not eligible for Money-Back Guarantee (MBG) or Guaranteed Service Refund (GSR) due to weather-related delays.

What are FedEx and UPS return shipping solutions?

UPS Return shipping solutions

UPS offers several options to its customers to simplify return shipments. They offer the convenience of a pre-printed return label, which accompanies the package. UPS also gives UPS Electronic Return Label directly by email to the recipient. In addition, UPS drivers will collect the return shipment from the recipient’s address. UPS allows recipients to drop off return shipments at a UPS store without a label or a box.

FedEx Return shipping solutions

Just like UPS, FedEx has options to return a package. If the recipient has a label for the return shipment, they can drop off the packages at FedEx retail and contactless FedEx Drop Box locations. Even a QR code return label is sufficient to return the package at a FedEx drop off location nearby. Recipients can also create a return label on fedex.com for returning the parcels. In addition, FedEx’s global returns solutions help shippers improve customer loyalty and monitor their supply chain expenses.

How does Audintel help?

Audintel helps shipping companies by providing visibility of the return packages along with the reasons. Audintel reports help the shippers to analyze the return packages and take corrective measures for future shipments by avoiding the cost incurred on the return packages. Our dashboards provide the details of return packages based on the services also.

Final Remarks

Shipping companies need to make the return process as easy as the order process. Customers will prefer a company that gave a positive shopping experience, even returning a package. In addition, shippers will opt for the parcel carriers that make the return process easy for them and their customers. So, do you have a return shipment that needs our expertise, then contact us on how to go about it? For further advice and services, call us at +1 (619) 354 8539 or visit our Audintel website.