/ Money

First-class price for a second-class service?

Letter with first-class stamp

How much compensation would you expect to receive if a parcel you sent went missing or got damaged? £50? £30? Actually, it’s now just £20. Royal Mail has slashed the maximum level of compensation it pays out…

I don’t think I’m alone in believing that compensation for lost or damaged post should at least cover the price you paid to post the item, as well as a hefty chunk of the value of the item inside the parcel.

However, Royal Mail has dramatically reduced the maximum compensation it awards for lost or damaged 1st or 2nd class post, from £46 to £20.

Although Royal Mail automatically covers you for the cost of postage (with a minimum of six times 1st-class stamps), its compensation for the item itself is now subject to a new maximum of £20.

The price of peace of mind

It’s not all bad news – Royal Mail has increased the maximum compensation for parcels and letters that are sent via its signed-for service. This is now £50, up from the previous £46. Since the maximum amount you’ll pay for the signed-for service is £33.50, you’ll definitely be covered for the whole cost of postage and then some.

So, if you’re prepared to fork out extra for the signed-for service when posting items, you’ll receive a better level of cover.

Personally, I send everything via standard delivery, and until now my compensation entitlement was the same as it would be for sending via signed-for delivery.

Royal Mail said that the changes ensure that compensation is proportionate to the service used and postage paid. But how do you feel about Royal Mail’s compensation overhaul? Would you opt for signed-for delivery in order to get access to a higher level of compensation?

[UPDATE 28 JUNE 2013] – This post has been edited due to an inaccuracy – Royal Mail will cover the full cost of postage for lost or damaged post. It’s only the cost of extra compensation that has been cut.

paul says:
3 November 2015

So by giving me a £250 insurance for sending a parcel track n signedc..they are false advertising …can you comment ?


Hi Paul, thanks for your comment. To clarify the compensation offer has reduced for 1st and 2nd class post. If you opt for a different service, such as signed for, then the compensation offer will change to reflect that, but always check the T&Cs to make sure. Thanks


A few months ago I sold 4 items on eBay. 2 items I refused to pay the extortionate rates the RM wanted and sent them by courier for a fraction of the price.
The other 2 items were sent by RM 1st class. Both on different days, from different POs, to different people. BOTH were ‘lost’!
The first one I received eBay sale price plus postage. I sent all the receipts with my claim form. The second item I received £20 plus postage. The item was sold for £90!
I complained to the ‘next level’ and received a letter today saying basically “tough luck buddy”.
My argument was that I had entered into a contract by paying the postage. They claim it is not a contract under some RM Act of parliament and they don’t have to deliver.
I argued their T&Cs aren’t sufficiently displayed at the point of purchase. They said look on the website.
I said I wasn’t informed of the compensation limit by staff nor asked the value of the goods I was sending. I was told all staff aware trained to do so.
I’m basically £70 out of pocket. I’m not going to accept that and I’m prepared to challenge why, as it’s now a private company, the RM is protected by an Act of Parliament. More importantly why it dissolves any obligation for the RM to deliver items as paid for by their customers.
Surely they should be bound by the same contractual laws as any other sale of goods or service is? Surely they should be using insurance rather than parliament as protection, as they are a PLC?

3 June 2016

Reading all the comments here, Rm has changed even more for the worse. It used to be Insurance you paid extra for, now it’s compensation. As a business selling on the Internet, I used to use RM, but when I noticed that the compensation only covers the actual cost of the item (not retail value) and you have to also provide proof of that cost with a receipt, else you get nothing but 1st class stamps to cover postage cost . Even worse if you sell 2nd hand goods on Ebay, even though the item maybe worth what it sells for, RM will ask you for the original receipt, no receipt no compensation of any kind, no matter how much you paid and even worse if you actively search for 2nd hand goods from the public, where is the receipt?. Also if you use Ebay to print labels, these now have bar-codes, which means the end to stickers, but recently I’ve been told that more and more Signed for parcels are going missing because RM systems can read the bar-codes (I friend of mine works in RM). I’ve now switched to My Hermes as a budget courier and UPS or other couriers for faster services and never a parcel goes missing or damaged, plus they will settle in full (retail price) if items are damaged or missing. If everyone stopped using RM to send parcels, but instead used a courier drop shop in a sort of protest – I wonder what would happen

Kate Wright-Atkinson says:
18 April 2018

Always send ebay items tracked (courier) or recorded (Royal Mail) – so many scammers on ebay who claim items haven’t arrived and tracking will allow you to check. I would never send a £90 item without this.


Im fed up, I posted a small parcel (paperback book-thin) on 23rd Nov 2015. The parcel hasn’t arrived, it cost £5.15, not the signed for service, however I did not expect such an insignificant item to go missing. This was a present, the cost of the book was only £9.99, however it was signed by the author.

I have just packed my Christmas presents up & organised for them to be couriered over with full insurance cover, its a no brainer. Small wonder the public are using other options


Reading the comments this is a joke, no accountability, just accept parcels & when they are lost its all the customers fault for not paying a fortune to have a signed for service and/or insurance. I might just as well cut out the middle man & throw my money away, a charity could have made good use of it,


I posted a parcel first class signed for destination the ombudsman and the post office lost it all my personal details and I had to re find all my paperwork etc. I tried to claim compensation but all they give is 6 first class stamps saying the parcel had no value so despite my loss, inconvenience and delay from the compensation from the ombudsman! I am so upset and feel very let down by the service and post office