What Royal Mail send through to your customers for undelivered UK items is a P91 form. They expect this to be filled in and returned to them confirming the fact that the customer had non-delivery of an item they had ordered from you.
Of course, the danger is that if a customer has already been sent a replacement item or offered a refund (what responsible online retailer wouldn't do this in order to keep a happy customer and to ensure repeat business/positive feedback?) for the non-delivered item, then the chance of them being bothered to respond to this P91 form is fairly low. I'd say that 10% sounds about right.
So in the above instance, the customer has received their replacement item and most likely will discard the P91 letter that has been received as they see it as an inconvenience - not realising of course that their failure to respond to the P91 will result in you being out of pocket. Ironic really, considering you've gone the extra mile to give them a good service by refunding or replacing the item. In one sense, it would be better for an online reseller to "unleash" their unhappy customer onto Royal Mail so that they confirm the non-receipt of the item, which in turn increases your chance of receiving a refund for that item. But most online retailers care about the service they offer and so refund their customer in good faith and then hope they get compensation from Royal Mail.
Cynics may believe that Royal Mail do this for the very reason of relying on not getting a response to their P91 form and therefore not having to pay the claim. On the flip side, Royal Mail could state this approach can dramatically reduce the amount of fraudulent claims received by customers and/or online retailers.
The ultimate conclusion is that this usually results in an unsatisfactory result for the online retailer, who will find themselves out of pocket for a situation that is completely out of their control. This is what makes it all the more galling: why should they pay money for a third partys inability to provide their core service?
Not only do Royal Mail treat public tariff and contract customers in this way with regards to claims, they also do this for their large retail and wholesale customers. We are a Royal Mail wholesale customer and we have come across exactly the same issue. Our customers are all online retailers who sell heavily on venues such as Amazon and eBay. As a result, their feedback is of paramount importance to them and they are quick to send a replacement or refund in the event of non-delivery so that their feedback ratings do not suffer. As part of our service, we dealt with all aspects of the compensation procedure on behalf of our customers and passed all compensation payments from Royal Mail back to them, obviously on production of proof of purchase of the stock by the retailer (we were able to supply proof of postage through our own systems).
Due to the fact that we were finding that Royal Mail were only paying compensation for 10% of non-delivered UK items, we have had to take the drastic action of paying a percentage of claims from our customers out of our own profits (percentage depends on the amount of business that the customer does with us and has an upper limit per month due to tight margins in the postal arena), but we found that this was necessary in order to offer customers a service that we felt was fair to them.
So I would say that everyone faces this issue with regards to claiming from Royal Mail it just seems to be one of those things, like death and taxes
Interestingly enough, Royal Mail pay claims for International items on a seemingly 100% no quibble basis almost completely the opposite to UK items.
Derek Seymour
e-parcels.com