/ 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.

Comments

It would be very difficult for Royal Mail to keep us all happy. The vast majority of what I send has little or no monetary value. I am not aware that anything I have sent or received has ever gone missing or been damaged. I am happy to pay extra on the rare occasions that I do send something of value, but the biggest concern to me is the rise in postage costs in recent years. Decreasing the compensation for lost or damaged first and second class post is fine for me if it helps prevent further price rises.

Others who have had poor experiences or routinely send valuable goods are likely to have a very different view.

I send everything via track and trace anyway, no matter what it is. I just don’t trust Royal Mail and like proof.

Last week I sent my working tax credit form back to HMRC, I used the freepost envelope i have but also paid an extra £2 to send it track and trace.

Rachael – From my quick reading of the Royal Mail website [search "Compensation"] I note that a refund of the postage, and the special service fee if applicable, is always given in addition to the appropriate compensation payment, so you should always get your postage back. You might like to check this in case I have misinterpreted it. The wording is a little confusing “a postage refund plus compensation on the basis of actual loss . . . this compensation is subject to the maximum payable being the lower of the market value of the item and the maximum of £20.00”. I understand this to comprise two separate elements (i) a refund, and (ii) compensation, the words “this compensation” referring, literally, only to the second element. If it doesn’t mean that then I think Royal Mail should be pressed to make it clear that the postage refund is incorporated in the compensation.

I cannot remember anything I have sent by Royal Mail not being delivered or being damaged in transit. Nor have I received any damaged gooods that were properly packed in the first place. On several occasions recipients have denied taking delivery and then the item miraculously turns up or a cheque gets paid. I wish other carriers were as careful with goods. I have used Special Delivery Guaranteed [£6.22] for certain important legal documents just as an extra precaution and to make sure of timely delivery [I note that it it also has consequential loss cover upto £10,000 for documents like tax returns that could result in penalties for late delivery].

Is there not insurance you can take out to cover the cost of the contents of the parcel or the value of documents you post? I can’t find it on their website – perhaps they missing an opportunity. There is insurance offered by independent carriers.

Many people are not aware that paying for and sending an item by Recorded Delivery isn’t full proof. That item ‘travels’ the same as 1st or 2nd class and only gets seperated at the other end for delivery/signature.

Therefore there is as much chance of the item getting lost, as under normal postage. I speak from various bad experiences with Royal Mail.

Years ago a lawyer sent vital X-rays (taken in Africa) across London by Recorded Delivery, they never arrived. A book of stamps was offered as compensation!

Derek D says:
29 June 2013

Last month a pair of new reading glasses were sent to me via Tracker service. As I was away
On holiday, these were returned to my sorting office. They say they were returned to sender.
The Opticians say they did not receive them?
Situation. I have no glasses and no refund!
Derek D

jeremy Knight says:
24 August 2013

Nearly all the above is completely wrong in practice.
Most people sell on Ebay for profit.I sold an item for £20.00 this included first class signed for post.
The item did not arrive.To protect my feedback i refunded the £20.00.I made a claim on Royal mail,they will only refund the acquisition cost which as it was in a large consignment was considerably less,but my loss is £20.00.
If a new car is written off whilst being delivered.it is the retail cost of the car that is covered not the cost of the raw materials in making that car.Any insurance company would not be able to argue any different so why should the Royal Mail?
Until someone like “Which” takes this matter to court for a judicial review,Royal mail will continue to perpetrate what is essentially a fraud.

Claire Freemantle says:
26 January 2014

I sell many items on Ebay and have recently made a compensation claim for a vase sent by Special Delivery which had been damaged in transit. I sent several photos of the packaging (interior and exterior), the damage (large crack) to the vase, proof of posting, details of the Ebay and Paypal transactions etc. I was absolutely honest and told them I had paid for the vase in cash with no receipt (very common in the antiques trade) and claimed for £100 the buyer had paid. They replied insisting that I send the vase back with original packaging and that they could only compensate for ‘cost’ price, despite stating in their terms and conditions that ‘compensation for loss or damage is available on the basis of actual loss up to the maximum of the market value of the item or £500 (whichever is the lower)’.
I put forward the argument that the Special Delivery was taken out to compensate for loss or damage relating to the market value established via the transaction between buyer and seller on Ebay, i.e. £100. I asked what they would do if I had paid £120 at an auction house for an item (for which I could provide an invoice) which was subsequently sold at a loss – would they compensate me for the ‘market value’ established months ago between myself and the auction house? This is also not an uncommon situation in the antiques trade. I also asked how they would determine the value of an item sold on Ebay that was originally bought as part of a lot at auction – they conveniently ignored both questions.

I know that many dealers have experienced similar problems and investigation and action needs to be taken by ‘Which’ to clarify what is ‘market value’. Also it is quite ridiculous for me to have to send a damaged item back to their Plymouth office (a distance of some 150 miles from my home address) – I have refused to send it as (a) once pottery items are cracked they become very vulnerable to further damage and (b) there is no guarantee that I would ever see the vase again. Inspections of packaging should be carried out at one’s local Post Office. The staff there know that I package items more than adequately and advised me to claim for the full £100.

I am now taking this matter up with the editor of the Antiques Trade Gazette as problems with Royal Mail compensation have been the subject of the Letters page on previous occasions.

Apologies for the length of this email – it would be interesting to hear from more dealers who have had similar experiences of Royal Mail’s so-called insurance policy when sending items via Special Delivery.

Alfred H. says:
16 February 2014

Clare is entirely correct.Royal mail will only compensate for the item upon proof of purchase by you regardless of what it sold for on Ebay.No proof and you only get the minimum of six first class stamps .Any enhancement eg proof of posting,signed for special delivery etc is a waste of money unless you have proof of what the item cost you.
I don’t bother getting proof of posting any more it costs me petrol going to the post office.I post through my local post box.
I only send items below £10 value by royal mail everything else i send by myhermes at least they compensate for lost items.
So why have royal mail done this?It is a cheap way of reducing overheads at a time when they are floated on the stock exchange.

solnishko says:
17 January 2015

It’s a very unfair system, I agree. When I sold an art print on ebay I was assured by the post office counter clerk that it was fully insured at sales value when posting. Ebay require that the actual sale amount be specified on the customs form if the item is to go outside the EU, in addition in case of any loss or damage. It’s also a legal requirement for Import/export purposes. The print then ‘disappears’! No signature ever seems to be have obtained at the other end – the buyer. And guess what? Royal Mail will only refund the original cost of the print, despite the fact the market value can be proven to have increased considerably. I, the seller am required to refund the buyer (who may have actually received the print) and have no return picture. In effect, incorrect information is supplied at the post office counter time and time again! The small print is more enlightening of the real situation.

I’m not a dealer but I make regular casual sales and purchases on eBay and similar and I too would like some clarification as presently RM appears to have weasel words to get out of any situation. There should be a straightforward set of terms that everyone can understand and the old get outs enjoyed by so many of the industries that were state monopolies should be swept away.

My recent personal experience was that whilst de-cluttering I sold a ‘collectors item’ on eBay for what was actually a modest sum. It was a set of badges, ‘pins’, and what made them attractive to a collector was that they were still in their original boxes which were in good condition. Not by the time they were delivered, by then they were well and truly mangled.

On complaining I had a whole series of excuses starting with the ‘you didn’t pack them correctly’, easily refuted with photography and witness statements, and ending with ‘the boxes don’t count because they are not part of the article’ and the ‘killer’ statement – “they have no value anyway as they were a present given to a child and you have no receipt therefore they are worthless”! The concept that their sale price on eBay is ‘market value’ seems utterly foreign to the Post Office.

As my time is worth much more than the value of the packet I left it at that. Next I tried to find the appropriate regulator to complain only to find that Postcomm has been gobbled up by that famous ‘wet lettuce’ Ofcom . . .

Whilst I was at it I had thought to take up the situation in our area where deliveries are made late afternoon yet the last collections are mid afternoon making it impossible to turn around a letter to respond ‘by return of post’.

As anyone who has tried to get Ofcom to take an interest in anything will know it is another waste of time as their first words are always that they don’t deal with insignificant little people, individuals reserving their time and very limited energies for chats with the big organisations that they really should be regulating.

So . . . the issue of compensation, indeed, the whole concept of ‘service’ and the standards we should expect – and should expect to see measured and enforced – is a fitting candidate for Which? to get stuck into. I’d be willing to bet that there will be found a groundswell of dissatisfaction with the present situation.

One of my biggest bugbears over the last few months has been Royal Mail’s failure to obtain a signature, when I send an item of post using their “Signed For” service. I’m not a business, but I usually send anything important via their “Signed For” service to obtain proof of when it is received at the other end, and who signs for it. It rather defeats the object to pay the extra (currently) £1.10 charge, in addition to the cost of 1st or 2nd Class postage, when a signature isn’t obtained at the destination, and Royal Mail’s Track and Trace service is still showing the item as progressing through their network for delivery! This, despite the fact that I contact the recipient directly to confirm that they have actually received the item of post that I sent them, but Royal Mail failed to record that the item had been delivered and to obtain a signature.
I have pointed out several times to Royal Mail Customer Service, that the whole point of paying the extra charge of £1.10 to obtain a signature and proof of when it is received by the recipient, is entirely defeated when I am then forced to phone up the intended recipient, or await a possible reply, in order to check that they’ve actually received it.
This has happened on five separate occasions recently.
On the 7th December 2013, I sent a form to Child Benefit office, via 2nd Class “Signed For”. Naturally, Royal Mail’s track and trace is still showing this to be progressing through their network for delivery, even though through my own enquiries I did establish with the Child Benefit office that the item was received by them on 12/12/13. I complained to Royal Mail and they sent me a book of 6 x 1st Class stamps.
On the 28th of January 2014, I sent a letter to my GP surgery, which my surgery later said they received, but this is still showing as progressing through the network for delivery. I complained, and was sent a book of 6 x 1st Class stamps by Royal Mail.
On the 3rd of March 2014, I sent an important letter to the Independent Case Examiner via 1st Class “Signed For”. I know that the ICE received it, because I got a prompt response from ICE. But is still showing as progressing through Royal Mail’s network. I complained to Royal Mail, and they sent me a book of 6 x 1st Class stamps.
Also on the 3rd of March 2014, I sent a letter my local Council, via 1st Class “Signed For”. They did receive it, because I received a response, but track and trace is still showing it to be progressing through the network for delivery. I complained, and Royal Mail sent me a book of 6 x 1st Class stamps.
On the 3rd of February 2014, I sent a letter to the DWP using 2nd Class “Signed For”. The DWP did receive it, but again no signature was obtained, and it is still showing as being progressed through their network for delivery. I complained to Royal Mail, and this time they sent me out a form to complete, which I then had to return to Royal Mail, before they sent me another book of 6 x 1st Class stamps.
Suffice to say, I think that my experience of Royal Mail over the last few months has been very disappointing. Why are they failing to obtain so many signatures?

rob says:
25 June 2014

ive just had a confirmation thru via letter that states they refunded me the value of damaged items £3.50 , but will not pay the £8 postage charge for the damaged item to usa .
they state they refund for “lost” items , but not “damaged” items postage charges . so they took my money , didnt provide the promised service , and wont give back the money . incredible .
what a bunch of con men !!!!!

Just had another bad week with the postal service. A signed for parcel from Portugal was paid to come express . . . it was express until it landed in the UK when it seems to have been sat in depots for a week or so. Then, after being sent out for delivery the legend on the tracking system was item returned address does not exist! After a couple of hours of calls and emails we stopped it from being sent back to Portugal. Eventually it was delivered a week later than the maximum time quoted for the service.

Then, I sold some memory on eBay, the buyer paid extra for first class letterpost. the packet set off over a week ago yet has failed to reach North London. First enquiry met with the response that I could not even complain until fourteen days had elapsed, I pressed the matter and was told that it was all my fault as I had not driven miles and paid parking to buy the premium service where they dont just promise but they promise even harder to get it to the destination the next day!

It’s not a second class service, it’s no service at all. I remember when the US Postal Service was like this around twenty years ago. I remember also reading articles about how they changed the culture so that now the system does what it says (and charges for) to a high degree of performance with rapid, quibble free compensation when it doesn’t. It’s time we got a grip on our own service as my experience and that of my friends and family is that somewhere around ten percent of mail and packets are late, damaged or lost.

Posted a sympathy card to a close friend two weeks ago 1st class – it’s just arrived two weeks on!

Awful service by Royal Mail, made worse by the fact it was a sympathy card. I wanted it to arrive very quickly. No such luck relying on Royal Mail!

I usually obtain a certificate of posting, but as this was a card only, on this occasion I didn’t. Will do for everything in future!

rob says:
26 June 2014

solved my own problem with RM keeping the £10 postage and refunding the £3 item cost for breaking the vinyl lp i sent to usa . i said they acted negligent , failed to delvier the service they promised , and quoted 16.4 from here

http://www.royalmail.com/sites/default/files/Overseas_Letter_Postal_Scheme_Mar2014_0.pdf .

they refunded my £10 postage . what a bunch of chancers ! hope it helps someone else .
V for victory 😉

ben says:
30 July 2014

I sell on ebay.I recently sold an item for £16.99 and sent it 1st class recorded.The item failed to turn up so i had to refund the customer.I then put in a claim to royal mail.I received 12 1st class stamps as compensation for my loss because i failed to prove how much i had bought the item for,although i did prove that i sold it for £16.99 i:e paypal checkout receipt,ebay transaction id.Surely it’s none of royal mail’s business how much i paid for it if i can prove how much i sold it for ? i’m now £16.99 out of pocket.I thought recorded delivery items had some sort of cover to a value of £36 ish ?

rob says:
31 July 2014

ben id call and question that. you are covered for an increased £50 on recorded items now. normal post downscaled to £20. speak to a manager at RM not a junior.

Kess says:
8 August 2014

I am also an Ebay seller and as far as I know and have experienced, the *proof* of what the item lost cost is the ebay/Paypal transaction. This is what the *value* of the item lost is not how much you bought it for originally. After all, you have lost £16.99 not what it originally cost you (though I know that’s not the point) as you have sold it on.
I’m sure the last time I filled a form in, it does explain this. (I have done a few myself and this is what I understand of it)
RM should have given you £16.99 cheque not stamps.

Surely if RM have been negligent then that is the issue, not the service used or the price paid. My item (see previous post) has simply disappeared and they simply don’t care.

I have not been offered or made aware of any restriction on their liability and as ‘bailees’ owing me a duty of care it is simply negligent of them to lose my property.

As for the comment ‘speak to a manager’ . . . try to find one. Try to find anyone with any authority other than to fob off with meaningless waffle.

hammer says:
27 August 2014

Im a bit confuded about the compensation issue. My local PO told me that if i sent an item whic is more than £20 they will not refund me as i am using the incorrect service. i am now unsure to take a chance on items which sell between £21-£25. I dont mind taking a chance on these if they will pay me up to £20 but my PO is telling me differently

The terms for UK 1st or 2nd Class are fairly clear:

“For stamped, metered and by account* items a postage refund plus compensation on the basis of actual loss, where evidence of posting and evidence of value can be provided. This compensation is subject to the maximum payable being the lower of the market value of the item and the maximum of £20.00.”

So if you post something worth £25 and it is lost or badly damaged, compensation is capped at £20 plus postage paid.

Note that you cannot claim any compensation for valuables sent using standard postal services, such as money and jewellery. Maybe this is want you local PO was trying to saying.

I should perhaps add that your compensation is limited to actual loss. It sounds like you are selling items, e.g. on eBay. So if you only pay £15 for items you are selling for £21-£25, your compensation is limited to £15. It does not include any loss of profit. You may need to provide documentary evidence to back up your claim and establish the value of the item(s) lost. The fact that you’ve sold something for £20+ doesn’t count, harsh as that might seem.

Humbug . . . the true value of a sold item is its selling price and RM is merely trying to wriggle out of paying an actual loss of value.

It’s not just ‘harsh’ it’s substitution of a set of weasel words for the simple meaning of plain words.

An item sold has had its value established. It is time these cowboys (and girls) were taken to a court at a high enough level to set a binding precedent. . . . And someone / thing like Which should do it rather than providing a platform for the kind of ‘weaseling’ above.

Do I sound angry . . . well I am. Just the latest RM c**k up at my home. An expensive and vital item, sent international tracked and signed for from Portugal was returned with the legend ‘Address does not exist’! Well, RM deliver most days when the whim takes them and my house is easy enough to find. The Portuguese Post Office (yeah yeah . . . RM told us as addressees that we had no right to complain) told the sender that they had been unable to either track the packet as RM had not put the data up and that they themselves found the ‘British Post Office’ confused and unhelpful.

This is not even a second class service and it is high time RM was held properly to account. Who regulates the RM? Why, our old ‘wet lettuce’ Ofcom so little chance of any action there!

The GF has suggested that as I reported a previous parcel from Portugal missing in a post a few weeks ago with the RM claiming my address did not exist I make clear that this is the second time in two months that this has happened. At least on the first occasion it did eventually arrive.

Here we go again . . .

Ikea sent a gift voucher for a large sum first class tracked and signed for yesterday. It set off in plenty of time from a major post town on a direct route to another where I live . . . I took the morning off because this is part of getting a present for someone.

The usual first class service, no show. Apologetic postie explained that ‘lots of stuff goes walkies’ . . . No doubt their apologist Em (above) will point out that my time has no value, the actual value of the gift token in the envelope is only that of the paper and that it was not me who had a contract with this shower and that i should seek redress from Ikea . . . and all the other specious waffle.

I’m old enough to remember all the promises that were made to convince legislators and the public that the PO should be allowed to split the service and to charge a premium to deliver mail next day. Well, they do the premium charge bit . . .