Precipitation measurements at gauges are often considered as reference truth for evaluation of satellite precipitation products. However, gauges may contain large errors. A major source of gauge-measurement error is snowfall undercatch in high latitudes. We show that the two popular correction factors (CFs) used in the Global Precipitation Climatology Centre monitoring and the Global Precipitation Climatology Project products are different by more than 50%. The CFs can be as large as 3; thus, the choice of CF introduces large uncertainties. Here, in light of observation of storage change from the Gravity Recovery and Climate Experiment (GRACE) and by using the mass conservation principle, we assess the two popular CFs over six Arctic basins. By investigating monthly time series and multiyear precipitation rates over the studied basins using GRACE-based analysis, the CF based on Fuchs dynamic correction model used in Global Precipitation Climatology Centre monitoring is preferred.