Postage costs lottery hits Scottish small firms

Most firms questioned by Citizens Advice Scotland (CAS) reported that they had been charged additional fees for having items delivered recently based on their postcode.

More than three quarters believed the additional costs were having a substantial impact on their business.

The survey found that charges for delivery to parts of Scotland can be as much as 50 per cent higher than standard fees, many companies refuse to deliver to certain areas at all, while others have pricing policies which are unclear or misleading.

Keith Dryburgh, policy manager at CAS, said the extra charges could be devastating to a small business which has to buy in stock.

“The report makes clear many businesses feel their profit margins are cut significantly by these unfair charges,” he said. “Many have had to change their business, cut wages or lay off staff as a result, all of which has a knock-on effect on their local economy – particularly in rural areas.”

CAS estimates that the issue affects 15,000 businesses across Scotland. “Many companies base their delivery fees purely on postcodes, rather than on the actual cost of delivering an item,” said Dryburgh.

Respondents reported that the majority of suppliers do not offer delivery by Royal Mail as an option, meaning that the Universal Service Obligation does not apply to a significant number of items rural businesses order online.

More than three-quarters of respondents said they were regularly classed as “offshore” or “remote” when ordering items online. This included businesses whose premises were on the Scottish mainland but were considered an “island”.

Delays in items arriving was another common problem, with 69 per cent of respondents reporting it as an issue.

CAS has made a number of recommendations and said traders could alleviate the problem substantially simply by offering delivery via Royal Mail.

It also said firms should look to work with customers to find alternative solutions, pointing out that most respondents said they would be prepared to collect items from their local post office or a shop if the costs of delivery would be reduced.

Where one courier firm does not deliver to certain areas, it said retailers should shop for alternative couriers which do.

CAS also believes enforcement bodies such as trading standards services and the Competition and Markets Authority should ensure that retailers across the UK are aware of and complying with regulations on mail order.

It said a statement of best practice produced by the parcel deliveries working group led by Consumer Futures and the Scottish Government, should also be promoted to retailers.

“We will continue to campaign on this issue and we would urge all political parties and others to back our campaign for a fair deal for Scottish consumers and businesses,” said Dryburgh.