FedEx, UPS Add Samsung Galaxy Note 7 Return Guidelines

FedEx and United Parcel Service, two major delivery services in the US, added guidelines for returning Samsung's fire-prone Galaxy Note 7 smartphones to the manufacturer through their networks.

First, they will only take devices that have been packed into special boxes equipped to handle shipments of faulty lithium-ion batteries and returns will be handled by ground-shipping only. Neither FedEx nor UPS will move any of the devices via planes, hewing to guidelines set out by federal regulators prohibiting air shipments for recalled lithium battery products - even for phones that aren't covered by the existing recall. The restrictions fall short of the outright ban instituted by the UK's main postal service.

Samsung on Tuesday announced a total halt to production of its troubled Galaxy Note 7 smartphone, citing continued safety concerns over the device exploding.

(Also see: Samsung Galaxy Note 7 Recall: The Name That Wasn't Meant to Be)

"With Samsung discontinuing sales of its replacement Galaxy Note 7, FedEx has taken additional steps to ensure our priority on safety," Jim McCluskey, a FedEx spokesman, said in a statement Wednesday. "FedEx Express is no longer accepting any Galaxy Note 7 devices, including those from authorized distributors."

FedEx Express, the air shipment unit, is the world's largest cargo airline. The shipping company's FedEx Ground division, which transports packages in North America primarily by truck, will accept new or used Galaxy Note 7 devices, but only from mobile phone retail locations in the contiguous 48 states.

Galaxy Note 7 owners must wait to receive packaging that meets regulatory guidelines before either FedEx or UPS will take them. Samsung and Verizon said they're providing customers in the US with these fireproof prepaid delivery packages, which the US Department of Transportation has approved. Even then, FedEx Ground won't accept phones from individual customers or from any other type of store, including those with FedEx counters or drop boxes.

Customers can also return the phones in person to their wireless carrier. Samsung said in a statement it also offers the option for customers to schedule a pick-up.

The UK's Royal Mail Plc said earlier it would ban Galaxy Note 7 shipments entirely. Customers sending packages through the mail or via Royal Mail's Parcelforce courier service will be asked to detail what's inside, to prevent faulty products from slipping into delivery vans, the London-based mail carrier said in an e-mailed statement.

Customers who exchange the Galaxy Note 7 for a Samsung device will get $100 credit, while those opting for an alternative brand will receive $25 credit."

(Also see: Samsung Reassures Consumers That Galaxy S7 Is Safe, Hasn't Been Recalled)

The decision by Royal Mail hampers compliance with Samsung's global recall of all Galaxy Note 7s following repeated reports of the smartphones catching fire. The South Korean manufacturer said in a statement that it's arranging home collections using UK Mail Group Plc, the delivery service German carrier Deutsche Post AG agreed to buy in September. However, this applies only to customers who bought a device in the UK from Samsung's online store.

Deutsche Post's DHL express-delivery division is still transporting the devices following a suspension of a few days in late September while it sought clarification from Samsung on ways to maintain safety rules, Dirk Klasen, a spokesman in Bonn, said by phone.

Samsung has yet to issue any information about the cause of the latest incidents with its flagship Galaxy Note 7 phone. Government investigators believe that a separate problem may have caused the overheating of the devices delivered as replacements for the recalled version, a person said. The US Consumer Product Safety Commission and Samsung have not agreed to expand the initial recall of the first Galaxy Note 7 batch announced last month.

The company said that a thorough investigation takes time, and it would be premature to speculate on the outcome. Samsung said it has a process to safely dispose of the phones after receiving them that is in accordance with government regulations, without providing specifics.

Samsung cut its projection for third-quarter operating profit by $2.3 billion on Wednesday after deciding to end Galaxy Note 7 production this week.

© 2016 Bloomberg L.P.