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With Internet, Consumers Turn Tables on Firms

March 06, 2000|ESTHER DYSON

How many airline miles have you earned and let expire unused? How many times have you bought something with a rebate and never cashed in? How many times have you bought something with a money-back offer and junked it without taking the trouble to get your money back?

You're not alone. Companies are piling up billions of dollars in unfulfilled liabilities, and consumers are losing out on billions of make-goods that could be theirs--if they only bothered.

Statistically, it's pretty safe for large firms to make such guarantees. They have huge data-processing departments; individuals and small firms have shoe boxes, scraps of paper--and better ways to spend their time.

Right now, companies have all the power, but the Internet is beginning to let individuals access the same kind of power. Individuals use those resources on a smaller scale, to be sure, but they can tap into just enough data-processing resources to keep track of merchants' promises and performance, just as merchants keep track of customers' buying habits and payments.

The same impetus and power shift that lets consumers push prices lower by buying in the aggregate or through bidding services such as is about to affect terms and conditions, as well as prices.

One canny company--surely the first of many--is offering its data-processing services to customers instead of to vendors. The company is Transport Recovery Services of Omaha, but its Web site has a catchier name:

The idea is simple and specific: will track your packages for you, flag the ones that are late and secure the refund or credit you deserve.

Even though anyone can track packages through the Web, most shippers don't bother to do so unless an important package arrives late. In such a case, you might apply for a refund. But nine times out of 10, you probably never check to see when your packages reach their destination, and the recipients usually don't know when their packages were supposed to arrive.

This is more than a behavior quirk; it's human nature. And it's well-known within the shipping industry.

A couple of years ago, two United Parcel Service veterans, Chris Davlin and Mike McMahon, left to work on the customer side: As the industry developed automated tracking systems, they saw an opportunity to help customers track their packages on a regular basis, instead of only when there was a problem.

Davlin and McMahon started with big customers, such as computer manufacturers, retailers and Internet companies, but their goal has always been to reach a broader market.

"The neat thing about the Web," said Davlin, "is that you can just throw hardware and software at the problem. It scales up smoothly. We can do it as efficiently for the little guy as for the big guys."

UPS, FedEx and Airborne Express might not like the idea, but after all, they are making the guarantees and offering the tracking services to their shipping customers. is operating as an agent on behalf of its customers.

The delivery services can hardly decline to give out the tracking information. What makes tracking a job for a specialist such as Transport Recovery Services is that guarantees vary by location and among services (priority, one-day, two-day).

Where does Transport Recovery go next? "As the holiday season showed us," Executive Vice President Randy Eccker says delicately, "there are a lot of opportunities for improvement in e-tailing. We're developing programs and services to be ready to help Web sites deliver next Christmas."

For now, the service operates only within the United States, but other regions are planned. The couriers generally don't yet offer guarantees or tracking for international shipments, because they rely on third parties outside the U.S. and have a tough time controlling quality of service.

Isn't this all a zero-sum game? Won't FedEx, UPS and Airborne, and even the U.S. Postal Service, just quietly change the terms of their guarantees?

Probably, or they'll have to raise their prices. But there will be other benefits: There will be more pressure on them to deliver the service they promise.

Airlines in the U.S. now have to publish their on-time statistics, by government decree. I expect that pretty soon Transport Recovery will be publishing the package-deliverers' statistics--not by government decree, but because it will attract attention to the company's service.

Competition is not just about pricing; it's about better service.


Esther Dyson edits the technology newsletter Release 1.0 and is the author of the bestseller "Release 2.0." She is also chairwoman of the Internet Corp. for Assigned Names and Numbers. Send comments to

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