Amazon Refunds Shipping

by Jana Ritter - Published: 12/26/2013 Inc. has offered customers $20 gift cards and refunds on shipping charges after an avalanche of orders caused United Parcel Service Inc. to miss delivery of some packages by Christmas. In messages to customers, the largest on-line retailer is saying its own fulfillment centers processed customers’ orders in time for holiday delivery and cited failures in UPS’s transportation network. Amazon also says it’s reviewing the performance of the delivery carriers.

Amazon warehouse

UPS issued its own service update on its website, saying that the volume of air packages exceeded its capacity immediately preceding Christmas. The company would resume normally scheduled service today after making no pickups or deliveries on Christmas Day. “You had a perfect storm of events from the consumer side, the retailer side and the shipping side,” Craig Johnson, president of Customer Growth Partners LLC in New Canaan, Connecticut said. “At the last minute this year, a number of retailers extended their cutoff date to get there by the 24th,” Johnson said, to compensate for a “mediocre” holiday shopping season. “Normally those kinds of schedules are all kind of prepared or coordinated with the carriers.”

In October, UPS and FedEx announced their holiday shipping forecasts. FedEx said it would carry more than 85 million shipments in the first week of December. UPS, based in Atlanta, predicted it would deliver 129 million packages that week, and would see a second holiday rush during the week before Christmas. UPS added 55,000 part-time holiday workers, leased 23 extra planes and effectively built a second trucking fleet to handle the seasonal package flow. Johnson said retail sales for the week ended on Dec. 24 totaled $88 billion, up from $85 billion last year. That’s the single biggest retail sales week in history, he said.

U.S. online holiday retail sales were projected to climb 15 percent to a record of more than $78 billion by Forrester Research Inc. in a report published last month. UPS expected to ship more than 132 million parcels globally during the week before Christmas. FedEx also had trouble keeping up and customers from retailers like Amazon, Kohl’s and Walmart were left empty handed Wednesday.

“We’re deeply sorry for disappointing our customers expecting delivery in time for Christmas,” Jen Johnson, a spokeswoman for Kohl’s Corp., said in an e-mail. “Although a limited number were impacted, we take each customer experience seriously.”Kohl’s is contacting those affected and the company will fully cover the cost of all items not delivered on time, Johnson said.

While Amazon and other major on-line retailers are blaming the fiasco on UPS, it also looks like they could be at fault as well, as they tried to entice shoppers and pushed the limit on how late they could order items.