How residential surcharge discounts often go unapplied

Residential Surcharge discounts are not honored when a package is shipped Ground Commercial to a residential address

Nobody likes to be surprised by unexpected charges on their carrier invoices. Unfortunately, it’s common for carriers like FedEx and UPS to fail to discount surcharges when the service type is not correct for an address type. For instance, many shippers notice their Residential Surcharge discounts are not honored when a package is shipped Ground Commercial to a residential address. The service type doesn’t match the address type and that means the discount on the residential delivery is not applied. These small missteps add up to a large sum of missing money over time.

What this looks like on a carrier invoice

Additional charges easily occur when shipments are not processed properly. For example, a shipper saw two different amounts for residential charges on packages. Some packages were being tendered improperly. Instead of a $2.52 residential charge, the shipper saw a $4.15 residential charge on his invoice. The discounts penned in the carrier agreement included Residential Surcharge and Residential Delivery Area Surcharges, which weren’t being administered due to packages automatically being processed as Ground Commercial shipments.

It’s important to select the appropriate service type in relation to the address type. If the shipping label isn’t manifested properly money is lost to the carrier.

How to ensure UPS and FedEx carrier discounts are applied

Tendering shipments with address type verification is critical. Verify each address type and use the correct service type according to the address type to avoid billing errors. Auditing invoices internally require extensive hours as a team member dissects invoices, analyzes the problem and files disputes. Share A Refund pinpoints these discrepancies, audits individual packages, and files disputes to secure refunds automatically. Share A Refund can verify when discounts are applied properly for residential delivery.

Read more: Understanding minimum charges in carrier agreements

Share A Refund Carrier Agreement Optimization Team also partners with you to negotiate better discounts on Residental Surcharges, so you can walk away with the advantage. The CAO process incorporates a highly specialized Cost Modeling System that showcases the financial impact of each discount or incentive down to the penny. There’s no guesswork involved, it’s all down to leveraging better tech in the analysis. The Carrier Agreement Compliance service will keep your carrier’s honest and ensure you are receiving the discounts agreed upon during negotiation.

Do you have an existing auditing agreement?

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