/ 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

How does Royal Mail get away with only paying the cost price of a damaged or lost Ebay item. I had a boxed dart board damaged that I had to refund the buyer for £36. Parcelfarce will only pay me the cost price of £14.00 so I am down £22 for the privilege of having it kicked into a roller gage at depot?
At least Hermes pays the full customer invoice costs.

Walter says:
25 April 2016

You pay extra for insurance, than when the parcel arrives damaged, and go to claim the refund, that you are entitled to, RM makes all kind of excuses, in order to avoid paying out, this has just happened to me, £60 out of pocket, thanks for nothing RM. Avoid like the PLAGUE.!!!

Wendy says:
22 May 2016

Please can someone advice me. My issue is with yodel direct not royal mail. They have lost my parcel. I sold an xbox one on ebay for £200. I only insured it for £100, not thinking that they would lose it. Now yodel are only offering the £100 in the claim but I have had to refund £200. Where do I stand? Thanks in advance.😡

Unfortunately, Wendy, it doesn’t look at first glance as though you have a leg to stand on because you under-insured the consignment; you took a risk that Yodel would not lose your parcel. However, with the kind of tracking facilities that are used in the parcel business these days, I find it unbelievable that a carrier can ‘lose’ a parcel and I think you should take the matter up formally with Yodel as they don’t appear to have performed the service with reasonable care and skill as required under the Consumer Rights Act 2015. Since they have not delivered the parcel as contracted, you should also have the cost of the service refunded together with any compensation. It would be interesting to hear how you get on.

chris bond says:
26 May 2016

I gather that if an item that is sold on ebay is lost by Royal Mail then they will only pay the cost of the item to the seller not the price it actually fetched. What happens then if someone sells an item that was inherited (say a vase) for which the seller has no receipt or valuation? Surely the price it fetched on ebay Is the current valuation and therefore is the true ‘cost’ and therefore loss to the seller.

Someone has told me you can sue the post office for four thousand pounds if a legal document goes missing is this true. I posted a marriage certificate with the royal mail signed for which my husband needed to start divorce proceedings. This item has gone missing and I have had to order and buy a replacement. not only jas this caused a massive inconvenience it has delayed the proceedings

The compensation available for delivery failure or loss in relation to the various grades of postal service are set out on the Royal Mail website.

Gillian Rea says:
11 June 2016

I have sent all of my receipts and proof of postage to Royal Mail and they have not even answered me nor is there a valid teephone number to contact them I have had to pay out £45 to a buyer on e’bay disgusting service.

Using Royal Mail special delivery which covers insurance for my item I expected them to cover the cost of damage to the item. It was not a particularly fragile item and was well packed. RM have used every trick in the book to refuse to compensate until I got fed up sending repeat copies of all my evidence. They finally told me it was not packed well enough. I send hundreds of parcels a year and china as far as Australia so know how to pack things well. I paid the extra to cover insurance – what a rip off service they have become. No wonder everyone is finding other carriers to use in the UK. I will be following them.

Am in a nasty dispute with neighbour. Was forced to send a letter threatening legal action using signed for service. I need to know when letter was received to gauge legal action. Letter was posted 5th September. Just checked web site……..letter still being processed! I am extremely stressed as I don’t know if letter has been received. I can’t ask them as we don’t talk. Wish now I’d just put letter through door and taken a photograph! What is the point of this service?………really?

Julie Webb says:
20 January 2018

I returned a parcel on 20th December. The order was complete in the original packaging ie. same weight as when delivered to me by Royal Mail, Returned by Royal Mail 1st class. Received a cheque yesterday for £20 compensation and £3.40 postage. The order value was £165.Dreadful service one month to come back to me and I’ve lost £145 due to their incompetence

marc says:
31 July 2019

I asked compensation for a laptop screen that was broken during transportation, the 2nd class postage is supposed to cover for 20£ and all I received is a 6 stamps book worth (if I ever use it) 4.20£ after taking 15 minutes of my time filling the online form which is pretty awful!

Forgive me if this has come up before. If I sell an item, say on eBay for £100 and insure it for £100 and the couriers loses it, I get the £100 compensation, then refund the buyer, I kind of understand and get that bit.

BUT I’m still out of pocket by £100 as the item is now not back with me. My question is this, should we all be insuring for double the amount, i.e. in this case for £200, £100 for the buyer and £100 for the seller?

Presumably if you refund the buyer it is because they have already paid you. You just return their money. You keep the compensation for the loss of the goods. Nice try though.

Just a thought Malcolm 🙂

The seller can still lose out because of the costs and hassle of dealing with the problem. Hopefully the profit on the sale of the goods will help offset this.

If the insurer values the lost item at the price the seller wanted.

Hassani says:
5 December 2019

Just I send my parcel on 29th of November is worth 700£ was moncler jacket I didn’t pay for insurance I send it 1st class I been tracking it no one knows where is it is funny with them they said I have to wait to 12 of December to claim and they will give me back 50£

Harry Derham says:
22 June 2020

My delivery is currently under investigation. I sold and sent some bike parts with Parcel force 48h tracking service, collection from my house on the 16th June. The delivery driver handed over a collection receipt relating to another persons order in my town which my dad didn’t spot at the time. My delivery has not moved on the tracking service and has just gone ‘missing’, most likely at the address on the incorrect receipt. Stupidly I didn’t insure it for the total value which I normally do, my fault. Hopefully it turns up as its a rather large and valuable box.

Steve A. says:
22 June 2020

With reference to Royal Mail recorded deliveries. They claim they do not pay compensation for the loss of jewellery items. I sell cheap end jewellery items £5 to £15 . It would be totally uneconomical to send these items by special delivery. costing £7.50. Seems to me Royal Mail are taking the money but don’t want to know when the item goes missing.

Julie dade says:
9 July 2020

I’m furious a card was sent to me signed delivery with vouchers in . It didn’t arrive so sender tracked it and it said it was delivered to me postman signed. I phoned my local Royal Mail and they said it didn’t come to their sorting office it went to a different town and address . They can see that by the scan details . So they have said it’s not there fault and I can’t claim my vouchers back as it’s not registered post !!!. I can’t understand why they can’t compensate me when my receipt says the correct address and town and they have delivered it completely wrong