Royal Mail tactic stops retailers stocking up before increase hits
As media coverage of the GCA’s concerns over the latest above-inflation hike in first-class stamp prices continues apace, retailer House of Cards has revealed Royal Mail’s sneaky tactics to stop customers beating the increase.
Miles Robinson, co-owner of the seven-store Home Counties chain, explained that, once a price rise is announced, Royal Mail stops indie retailers buying the stamps to sell in advance of the date it comes into effect as they now only state first or second class and don’t include the amount paid.
“They say we have reached our annual allowance, which mysteriously disappears once the new price has come into effect,” Miles told PG Buzz. “This obviously makes it worse as the consumer wants to top up but we then run out, which has exactly the opposite consequence for RM in reduced rather than increased sales!”
However, he’s discovered there’s a way to get round the problem caused when a retailer telephones to order stamps from the delivery using the direct debit they already have set up or paying over the phone.
He said: “It’s this service that has the restriction – but, if a retailer registers for an online trade account so you still keep your discount, then there’s no restriction as the online system will not work with direct debit so you have to use a credit card and it lets your order what you want.
“The added bonus with this system is you can use any credit card so if you have a rewards one you can fill your boots with points – sadly they don’t accept Amex!”
While this trick is sadly too late for the huge 22% hike which put 30p on the first-class price taking it to £1.65 from Monday, 7 October, it’s worth retailers keeping in mind as Royal Mail tries to force through changes to the way it operates.
This was the fifth increase in less than three years, almost doubling the cost of the first-class stamp, while postal regulator Ofcom has pegged the second-class cost to inflation until at least 2029, although that rose 10p to 85p in April.
The idea is to ensure that posting a letter remains affordable under the universal service obligation where Royal Mail is legally obliged deliver six-days-a week across all UK addresses for the same price.
However, as part of Ofcom’s investigation into the future of the postal service, the industry regulator is seriously considering Royal Mail’s bid to scrap second-class deliveries on Saturdays, and cut back to three or even just two days a week, which the company claims means it will still meet the USO as first-class mail will still be delivered six days a week.
At the GCA annual conference in Bristol it was the major topic of conversation, with the keynote speech on the subject, delivered by Royal Mail’s head of public affairs Fiona Hamilton, quoting from notes provided by David Gold, director of external affairs and policy, who was due to speak but had to cancel.
Since then, the GCA has been making waves in the media with its concerns that the spiralling costs of postage could herald the end of an affordable postal system, providing a template letter for anyone to download and send to their MP demanding government action to save the 508-year-old delivery service – Miles is among those who have used it, writing to all seven MPs in the constituencies where the House of Cards stores are based. The issues are covered in the video below, taken at the conference.
Following up on Fiona’s comments, the letter raises the fact that Ofcom has accepted Royal Mail’s plan to slash second-class deliveries, the delivery company’s determination to abandon the letters and cards side to chase parcels business even though the division of costs is unclear despite both sharing considerable elements of the same delivery network, and that the business is still failing to meet its legally-binding delivery targets while giving executives runaway pay and bonuses.
And the coverage continued this week with both Grace Jackson Design and Raspberry Blossom featured by their local news outlets, explaining how greeting cards help keep people connected and maintain their mental health – but depend on a reliable postal service.
Rebecca Green, co-owner and founder of Raspberry Blossom, told Warwickshire World: “I’m on the council for the Greetings Card Association, and this is the hot topic being talked about by members at the moment.
“People are concerned – the postal service, in many areas of the country, is just not great at the moment, and it’s a worry that it could get worse. Being able to rely on regular, reliable and affordable postal services is absolutely vital for local businesses across the UK, not just in the greeting card industry but in many other sectors too. We all need a good quality Royal Mail. It’s a public service that is important for so many people.”
From her eponymous company Grace spoke to Peterborough Today, explaining how she used to watch her mum write and send 100 Christmas cards each year so knows how important greeting cards are.
“It worries me massively because I know, both as a business owner and a customer, that a handwritten card means so much, and this rise will undoubtedly result in people sending fewer cards,” Grace said.
“A handwritten card is such a meaningful gesture, whether it’s celebrating a big milestone or just to tell someone you’re thinking of them – and it feels like the Royal Mail are trying to kill that off. Five price rises in under three years is atrocious, and I am afraid of what it means for my business going forward.”
