Royal Mail cuts compensation, introduces “Deliver to neighbour”

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Royal Mail have today welcomed changes to their compensation policy and delivery terms and conditions. The changes have been approved by Postcomm and will affect many online retailers who use Royal Mail contract services.

These changes will not affect consumers or the vast majority of small business customers who use stamped and franked mail. For those businesses that are affected we’ll let you know the implementation dates for changes as they become available.

Royal Mail say that they made the application to make changes because:

  • Current compensation arrangements are not in tune with the reality of today’s market
  • Customers increasingly want tracked services. Royal Mail has invested heavily in these services to meet the changing market demands. The improved range of delivery services Royal Mail offers enables customers to choose the right service to meet their needs for speed, tracking and compensation

Royal Mail compensation changes

The change that is most going to upset sellers is the removal of compensation for lost or damage parcels from untracked contract services such as Mailsort or Packetpost. Royal Mail say that none of the major UK delivery companies provide large businesses with compensation for loss or damage for untracked delivery services and it appears that they will follow suit.

Other changes to compensation will be limiting compensation on standard tracked services to a maximum of £50.00 (enhanced compensation remains available on International Signed For and Airsure products, and compensation levels for Special Delivery will not change), a reduction in compensation claims from 12 months to 80 days, and all compensation will be paid into the customer’s Royal Mail account instead of by cheque.

No Proof of Delivery requests after 3 months

There will also be a reduction in the length of time customers can request proof of delivery and request proof of delivery refunds, from 12 months to 3 months. You will still be able to get proof of delivery from the Royal Mail website for longer than 3 months.

Standard holding time for undelivered items

More positive changes are that all items that can not be delivered will be retained at local delivery offices for a standard holding period of 18 days. Currently, Recorded Signed For items are held for 7 days. Royal Mail Tracked items are held for 14 days and all other items for 21 days. Introducing a standard holding period will simplify the system for Royal Mail customers.

New “Deliver to neighbour” scheme

Royal Mail will also be trialling a “Deliver to Neighbour” scheme. Approval has been given by Postcomm for Royal Mail to pilot an initiative to make it easier for customers who are not at home to receive items that require a signature or are too large to go through the letterbox. Royal Mail is the only delivery company that is not allowed to deliver to a neighbour as part of its standard practice.

Independent research by Tpoll on behalf of Royal Mail has revealed that the overwhelming majority of consumers would welcome the initiative. The study found that 91.55 per cent of people supported the delivery of undeliverable items to neighbour if they had the ability to opt out.

Royal Mail is now finalising plans for the pilot and more detail will follow in due course. Customers in pilot areas will be informed of the initiative and given the opportunity to opt out of the deliver to neighbour scheme. The pilot will include Recorded Signed For letters which require a signature on delivery but Special Delivery mail is not part of the pilot scheme.

Future Regulation

Speaking of the changes Stephen Agar, Royal Mail’s Director of Regulated Business, said: “The changes that have been approved better reflect today’s market. They are a step in towards creating a more level playing field between Royal Mail and other delivery companies. Royal Mail now awaits the outcome of an Ofcom consultation on future regulation of our company.

It’s hard to disagree with Stephen – Royal Mail is in the invidious position of being forced to open up to competition whilst being hamstrung by regulation. Royal Mail have to carry out the final mile delivery of mail at cut prices for their new competition and at the same time are unable to make changes to compete effectively until legislators agree to relax regulations.

Whilst it’s hard to argue that some decent competition wouldn’t be a good thing for Royal Mail, it’s also fair to say that allowing competitors to set their own rules whilst holding Royal Mail to, what are often stringent, regulations does mean that it’s impossible for them to compete effectively.

Royal Mail can’t even cut you a deal on price no matter how big your mail volumes are, and they’re about the only business I know that can’t by law negotiate on price. This has to change to enable true competition and for the UK’s postal services to compete for our business based on price and service, just as every other industry does.

19 Responses

  1. Welcome news that Royal Mail will allow the “Deliver to Neighbour” scheme.
    Our local postie must have broken the rules a few times , as he’s delivered oversize and recorded items to our neighbour (and vice-versa) for years.

  2. on top of delivery to a neighbour
    why dont they grasp the 21st century and ask for an email/mobile to be part of the return postal address/ they could then contact the sender,even easier than they can now, seems they would much rather bung all undelivered mail in a corner to be forgot about, or sent to Belfast to be auctioned off or never seen again,

  3. I’m not overly concerned about the loss of compensation for untracked services. There is very little goes missing here (touch wood!) and the effort of tracking down what could be several different invoices to provide supporting proof for a compensation claim is unlikely to be cost effective, better to factor the occasional loss in.

    However, it’s a shame that the signed for delivery service is so ineffective & doesn’t ‘do what it says on the tin’ – I would use it more often, if it did.

    The only real option if you want to make sure something will (almost certainly) get there is Special Delivery, which works out very expensive. It’s a shame too that the RM tracked service isn’t more accessible / available on a one off basis – I believe the minimum requirement is to send 2,000 parcels a year by the service.

  4. .
    Re; New “Deliver to neighbour” scheme

    Snap, to the other comments, but this is a good thing.

    Many people find the trip to a local sort office difficult & time consuming.

  5. We use RM Tracked and often find that when customers contact us asking where their item is tracking shows it is being returned to sender. They always claim a card wasn’t left but I do think a lot just haven’t bothered to collect before the 14 days are up, hopefully 4 more days will help.

    One problem with RM Tracked is the standard service doesn’t include a signature just a record of delivery. We do get a few that show as delivered but the buyer claim they haven’t received it and this will probably increase with parcels being left with neighbours so they need to add an additional status of ‘left with neighbour’ rather than just ‘delivered’.

  6. dose any one even RM care to explain their inability to deliver DVDs but their irefutable tallent at delivering printed paper-Address labels are electronicly printed with post codes-Temperatures below 68F are not an excuse


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