CBS 5 Investigates With Anna Werner

(CBS 5) "This box looks like it's been through one of the wars!" exclaimed Sheri Garay, showing off a crumpled cardboard box marked with big red fragile stickers.

Garay's first lesson about shipping packages began with the sound of rattling pieces. It happened when she sent some fragile items via UPS from a small Post 'N Pack store in Miami home to Walnut Creek. Inside her package, a music box was crushed and a pottery dish shattered.

"And I'm saying, 'Oh my god, what did these people do to this!'" she remembered.

She's not the only one to learn this lesson: the shipping business can be rough, especially if videos posted on YouTube are any indication. Several clips show UPS drivers tossing, dropping, even kicking packages.

According to its website, UPS gives no special handling for packages marked "fragile," leaving customers like Garay frustrated, especially since she paid that store back in Miami almost fifty bucks for not only shipping through UPS, but extra insurance.

"I felt, all right, at least I have the insurance," she said. "So I go to the phone and I dial their 1-800 number."



But she says the response she got from that 1-800 number, UPS Customer Service, was a shock.

"We cannot speak to you because you are not the owner of the box," Garay said they told her. "The owner of the box is the place that shipped it."

UPS told her she didn't own the package, the store in Miami did.

"That's ludicrous!" Garay responded. "This is insane! I shipped it. I paid for it. I own the contents. And I shipped it to myself! It's mine. It doesn't belong to anybody else, it's mine! And (the operator) said, 'I'm sorry ma'am, but this is the way that UPS works.'"

So how does UPS work? Well, although the company has 26,000 shipping outlets around the world, it might surprise you to know that only a few are owned by UPS. Even brand-name "UPS" stores aren't owned by UPS. They're actually independent businesses. So according to UPS, when you ship from those stores, you're the store's customer, not a UPS customer.

"The store is the 'owner' and is considered the 'customer,' said an exasperated Garay. "So I have no rights whatsoever."

That meant if Garay wanted to be reimbursed for damage to her items, she'd have to argue with the people in Miami about it.

"It doesn't make sense to me," said consumer attorney Jim Sturdevant.

Sturdevant adds that all the confusion benefits the company, not the customer.

He explains, "UPS has set up a system.. to deny liability and deny responsibility by making the customer, who thought she was dealing with UPS, go back to the store of origin and try to demonstrate to the store that she bought the service and that the property was damaged."

UPS denies that characterization of its business.

In fact, if Garay had shipped from the U.S. Post Office or even FedEx, she could have filed her damage claim in California. But instead, she had to call that store in Miami, which called UPS, which sent a truck, which picked up her package for inspection by UPS.

Two weeks later, UPS denied the claim.

"They said they examined it," said Garay. "And because I packed it improperly, they cannot be responsible for it."

The company argues it's not responsible because the fine print on the store's shipping receipt reads: if you pack the box yourself, "you may not be covered for damage."

And that's not all the fine print says. Because it turns out Garay's package wasn't exactly "insured." Because what she and no doubt many customers think of as insurance is actually something UPS calls "Declared Value Coverage."

What's the difference? Because it's technically not insurance, it's not covered by state regulations--allowing UPS to set its own rules for reviewing claims.

Joe Rideout of Consumer Action says, "We have received a number of complaints about UPS shipping. And in particular, failure to honor insurance that was purchased by the sender."

Rideout says UPS makes big money off that coverage.

"It seems potentially deceptive to sell someone an add-on to the shipping price, characterize it as 'insurance' that will replace something that is lost or damaged, then have it turn out to be not exactly insurance at the time you have to file a claim," said Rideout.

So whatever happened to Garay's damaged package? Believe it or not, after denying her claim, UPS sent it back to the "rightful" owner: that store in Miami.

A frustrated Garay recalls, "I called the store and they said, 'Yes, your box is here.' And I said, 'Well how do I get it?' They said, 'Well you can come get it.' Ah, I'm in California and this is in Miami. How was I going to get it?"

No problem, they said -- Garay could simply pay for the box to be shipped back to her by UPS.

And there's yet another twist to this story: UPS now claims that store in Miami isn't an "authorized" UPS outlet. So UPS says Garay's experience can't be considered that of a customer of a "real" UPS store.

By the way, as of the morning this story aired on CBS 5, UPS said it will now give Garay a refund -- of $328.

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