Over ten years ago I asked UPS to stop sending me a bill every time I requested a pick up, which was often more than once a week. They told me they could bill me once a month (28-day intervals) but that I had to send a $100 “deposit.” I did so without thinking about it to avoid the bother of the multiple bills.
For some strange reason last week, I began to think of my $100 (perhaps a delayed drug effect from the 60s?). So I contacted UPS, and a functionary explained that the $100 is not returned “unless the account is cancelled.” Think about that.
Let’s assume that UPS does business with, say, 200,000 small businesses in the country from which they’ve requested this “deposit.” (There is no “deposit” if you agree to electronic funds transfer automatically.) That is a grand total of $20 million. (Check my math.)
AT that rate, UPS has a “float” of $20 milion in “deposits” from small businesses, just to bill them monthly, the way Fedex does but Fedex does so WITHOUT requiring a “deposit.” Nor do most service providers demand a “deposit,” especially after a period of reliable payments.
At even 2% a year, that $20 million throws off $400,000, enough to at least pay for some of the fringe benefits of the CEO, I would suspect. Since most small businesses probably expire without requesting their deposit back (death, purchase, retirement, simply forget about the payment made years ago, etc.), UPS gets to keep a large amount of the principal, as well.
UPS doesn’t just deliver, they KEEP! I wonder if this would pass the “smell test” of appearing in the Wall Street Journal? Does UPS really need to keep a “deposit” from small businesses, and if they do, it can’t be cerdited or refunded after a year of prompt payments?
The UPS guy usually brings my dogs biscuits, which I thought was a nice gesture. Given the predatory nature of UPS management policy, maybe he’s actually sharing his lunch.