Pricing in Proportion and Packetpost Returns

In February 2007, Royal Mail made an application to extend Pricing in Proportion (PiP) to Packetpost Returns.

Packetpost Returns is a service that allows packets to be returned from customers with the postage cost being borne by the original sender.

Royal Mail’s application proposed moving away from the system under which the price per item paid by the original sender is based on the average weight of the mail returned. Instead, Royal Mail proposed that an item returned through this service should be treated and charged as a packet under its PiP framework.

Royal Mail has also requested that Packetpost Returns, consistent with the greater alignment of these prices to those of normal Packetpost, should be included in the same controlled services group as Packetpost.

Postcomm conducted a consultation exercise focused on users of Packetpost Returns and other interested parties and carefully considered the points made in the responses. Following the consultation, the Commission decided to:

– allow Royal Mail to introduce a PiP price structure for Packetpost returns;
– require Royal Mail to give at least 3 months notice of the price changes following this decision;
– and reject the application to include the product in the same controlled services group as Packetpost.

Royal Mail has not yet made it clear when it will implement the new price structure for Packetpost Returns.