Royal Mail offers Pricing in Proportion rebate to customers
Royal Mail is urging UK businesses to take advantage of a financial rebate that will be available when its new Pricing in Proportion (PiP) system is introduced on 21 August 2006.
The rebate is available to businesses that spend more than £100,000 on postage annually and expect to experience a rise in costs of over 50 per cent – based on usage from 7th April 2005 to 5th April 2006 – when the new pricing system is introduced. A refund of 40 per cent of the price increase will be available in the first year, and 20 per cent in the second year.
Lorna Clarkson, Royal Mail’s director of pricing, explained: "Although 80 per cent of business mail will be the same price or cheaper to send when PiP is introduced in August, we are doing everything we can to support customers with the small proportion of mail that will be more expensive to send.
"As well as providing this rebate for larger customers, we are also implementing our biggest ever marketing campaign to ensure that all businesses, regardless of size, are aware of PiP and can take advantage of its benefits and minimise its impact."
To apply for the rebate, customers need to complete and return a PiP Mitigation application form by 31 July 2006. Forms have been mailed to Royal Mail customers that currently spend around £100,000 or more on postage annually.
Forms are also available at www.royalmail.com/mitigation, and the website features a mitigation calculator which helps businesses calculate if they qualify, as well providing other information on PiP. Further information is also available from the PiP helpline on 08456 113113.
Ends
Issued by Royal Mail
148 Old Street
LONDON
EC1V 9HQ
NOTES TO EDITORS:
• The rebate will be available to one account per registered company and will be paid in quarterly instalments or credit will be made directly to machines for customers that use meters.
• PiP is Royal Mail’s new mail pricing system that is being introduced on 21 August 2006. Postage for mail weighing up to 1kg will be based on size as well as weight so that prices better reflect the costs of collecting, sorting and delivering mail. While some prices will increase, over 80 per cent of all business mail will either stay the same price or be cheaper to send. The changes will not generate any further revenue for Royal Mail.
• Royal Mail’s universal service – the geographic cross subsidies that enable the company to operate a ’one-price-goes-anywhere’ system – will remain unaffected by Pricing in Proportion.
• Pricing changes similar to Royal Mail’s Pricing in Proportion have already been successfully implemented by other postal administrators in Republic of Ireland, Belgium, Denmark, Finland, Greece, Italy, Luxembourg, Australia, Canada, Japan and the USA. The following countries also have forms of size based pricing – Austria, Germany, the Netherlands, Poland, Slovenia, Switzerland, Hong Kong, New Zealand, and South Africa.
Under PiP there will be three categories of mail, Letter, Large Letter and Packets:
Proposed New Size Maximum Thickness Weights Content would include
Letter
Size not to exceed 240mm x 165mm
This size is larger than A5 (half a sheet of standard paper). 5mm 0-100g Most letters, postcards, bills and statements, some brochures and catalogues, most birthday cards.
Large Letter
Size not to exceed 353mm x 250mm.
This size is larger than A4 (a standard sheet of paper). 25mm 0-100g
101-250g
251-500g
501-750g Large letters (containing unfolded sheets of standard paper). Most brochures, catalogues and company reports, some magazines. CDs and DVDs. Most larger birthday cards. Most magazines.
Packet
Any item which is more than 25mm thick or longer than 353mm or wider than 250mm, or heavier than 750g. 0-100g
101-250g
251- 500g
501-750g
751-1000g VHS cassettes, books, some magazines and catalogues, parts and samples, prints and posters in large or cylindrical packaging.
Notes:
i. The maximum weight for second class increases from 750g to 1000g (1kg).
ii. Prices for items weighing over 1kg will remain unchanged.
