Web Startup Ensures Shipping Refunds

Web Startup Ensures Shipping Refunds
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This story appears in the March 2013 issue of . Subscribe »

Over the 15 years that Jose Li spent learning the shipping business, with stints in supply-chain logistics at Jamba Juice and retail and e-commerce support at FedEx, he saw carriers split their customers into two classes. "I worked with the Amazons, Targets and Nikes of the world," Li says, "and I've seen the discrepancies, the gaps of what large customers get and what small businesses don't."

Li decided to do something to help narrow that gap. He launched 71lbs, a web-based "set and forget" service that automatically audits shipments handled by FedEx or UPS for small and medium-size mail-order businesses. When the carriers don't deliver on time, 71lbs files a refund request on the recipient's behalf.

To deploy the service, commercial users plug their FedEx or UPS login credentials into the 71lbs website, which tracks deliveries, automatically files claims when shipments are late and ensures that refunds are credited to the clients' accounts. In return, 71lbs takes half of the refund amount--an amount that's comparable, Li says, to other cost-recovery services like tax audits.

So far, shippers don't seem to mind sharing the wealth. 71lbs' customer base has grown at an 800 percent clip since the company's launch, and a recent partnership with Etsy, the online arts and crafts marketplace, has netted 50 new sign-ups per week.

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