Royal Mail to Cut Compensation Limit for Standard Post

Royal Mail announced last week that they are planning to cut compensation fees for the loss of or damage to untracked, first and second class post from £46 to £20.

The taxpayer-owned postal service are in the midst of mass changes, as they try to make themselves more profitable, commercial and competitive, in the fact of heavy competition from the likes of TNT Post and UK Mail. The postal group defended their actions, by pointing out that many countries of a similar stature, such as Germany and the Netherlands, do not offer any compensation for lost or damaged untracked post. As well as this, they offered further defence against their actions by stating that they will be increasing the maximum compensation allowance for ‘signed for’ items from £46 to £50.

Whilst reactions to this announcement have, understandably, been primarily negative, there are some customers who feel this could be a fantastic opportunity to improve the postal service. Customer groups have been complaining for some time that the Royal Mail compensation arrangements are confusing and, in many cases, simply unknown to the average customer. Within the current system, consumers that are owed compensation for their untracked first and second class post can only receive their entitlement if they have something called a ‘certificate of posting’. Whilst these certificates are free and available at all post offices, they are rarely advertised, meaning that the public as a whole know nothing of their existence. As a result, most customers are only entitled to six first class stamps, which is the highest level of compensation the Royal mail are required to pay when the customer does not have their certificate.

Consumer Focus, the official champion of consumer rights, has stated that the Royal Mail should get rid of the certificate, should they bring in the lower compensation rate. Robert Hammond, director of postal policy at the organisation, has said that “We believe that as a trade-off for only being entitled to compensation over £20 for tracked mail, customers should no longer have to ask for certificates of posting for first and second class mail”.

In response, a Royal Mail spokesperson has stated that they welcome customer input and will consider their feedback as part of the consultation process. As yet, no further light has been shed on what their final decision will be.

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