Royal Mail compensation scheme suspended

Source: Precision Marketing | Published: 22 August 2008 00:00

The independent regulator for postal services has accepted Royal Mail’s application for financial relief until April 2010. As a result, Royal Mail will not have to compensate bulk mailers for poor services provided during previous postal strikes, or for potential industrial action.

The result follows Postcomm’s decision not to discourage the postal operator from taking the steps needed to modernise its business.

Royal Mail will now forgo £21.6m of allowed revenue due to poor service performance quality during the year, but bulk mail customers will not receive compensation. Customers will now be expected to negotiate compensation schemes with Royal Mail to suit their own needs.

However, Postcomm’s decision has sparked anger amongst ISBA’s bulk mail members.

ISBA marketing services manager David Ellison says: “We accept that Royal Mail’s own problems are deep-rooted and that they should not be discouraged from taking the necessary steps to transform and modernise their business. But our bulk mailer members, as commercial organisations, will be annoyed that they will not receive any compensation for the strike, which dramatically reduced the quality of the service they received. The decision to suspend the Bulk Mail Compensation Scheme puts the onus on individual companies to negotiate terms which protect them from potential disruption. ISBA calls on Postcomm to ensure that Royal Mail offers fair compensation to bulk mailers on an individual basis in the future.”

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