Lost in the post - the experience of consumer detriment in the parcels market

This report sets out the findings from a Consumer Scotland survey of 2,000 adults in Scotland about their experience of receiving parcels during the 12 months prior to spring 2023. This found that the majority of consumers experienced at least one issue with their parcel deliveries over a twelve month period. These issues ranged from lost or damaged parcels, delivery practices such as leaving parcels in insecure or inaccessible locations, or with an unknown neighbour, to delayed delivery and poor information provision.

The research also found that the redress system, which should help to resolve issues, has significant room for improvement. Our evidence suggests a significant lack of understanding amongst consumers about who is responsible for ensuring safe delivery of parcels and where to direct complaints and low overall satisfaction with the complaints process.

Key findings from the research include:

• 60% of consumers in Scotland reported experiencing at least one issue with parcel-related services over a 12 month period. These issues included lost or damaged parcels, delivery delays and concerning delivery behaviour
• delivery delays were the most commonly experienced issue with 37% reporting having experienced this
• parcel losses were high, with 29% of consumers reporting having experienced this over a 12 month period, equating to 1.3million parcels never arriving
• consumers who experience issues with parcel-related services often experience repeat issues. 75% report experiencing two or more of the issue types, while 25% report experiencing five or more
• nearly a third of people do not complain when an issue with parcel-related services occurs
• from a consumer rights perspective, it is the sender’s responsibility to ensure the safe delivery of parcels, not the parcel operator. However this does not appear to be well understood by consumers. Only 48% of people who experience issues complain to the sender, and half of these complain to both the operator and sender
• the complaints processes of parcel operators require improvement. Of those who made complaints to operators, 61% report they found the process difficult
• satisfaction with outcomes of the complaints process is low, with around a third reporting satisfaction and a third reporting dissatisfaction

In light of these findings, we make a number of recommendations to Ofcom, parcel operators and online retailers to improve outcomes for consumers:

Ofcom

• Ofcom should set out in more detail its approach to monitoring the impact of new complaints guidance for parcel operators. This should include clear success criteria; monitoring and reporting timelines and measures; and details of the range of regulatory actions that Ofcom will take if improvements in consumer outcomes are not achieved by April 2025
• Ofcom should consider its future strategy for publication of data on consumers’ experiences of complaints in the parcel sector, drawing on its expertise in publishing similar data for other sectors that it regulates. More regular, detailed complaints data from the regulator can support improved transparency and awareness for consumers in their interactions with retailers and operators
• Ofcom should publish market volumes for Consumer to Anywhere and Consumer to Consumer markets to provide clear public information on the relative size of these markets and help improve consumer understanding where the overall balance of redress responsibilities lies between retailers and parcel operators
• Ofcom should engage with the Competition and Markets Authority to identify opportunities for cross-regulatory working to improve the outcomes of consumers receiving parcels from online retailers, specifically to improve consumer awareness of where to complain if they experience a problem relating to their delivery
• Ofcom should split out the Annual Monitoring Report on the Postal Market by nation level, similar to the Connected Nations reports, to ensure that there is detail on how the parcel market is functioning for each nation in the UK. Given the different geographic, market and policy context for consumers in the different nations, it is important that any variations in experience are monitored and understood, to support effective responses to these

Parcel Operators

• all parcel operators should review their complaints procedures in line with the new guidance from Ofcom and should proactively publish details of the steps they have taken to improve their processes for consumers, along with regular data about the number and types of complaints they have received and the actions they have taken to address these

Online Retailers

• online retailers should ensure that they clearly explain the sender’s legal liability to ensure safe delivery at the point of purchase. This should include clear information about where consumers should direct any complaints about their delivery experience

Consumer Scotland is the statutory body for consumers in Scotland. Established by the Consumer Scotland Act 2020, we are accountable to the Scottish Parliament. The Act provides a definition of consumers which includes individual consumers and small businesses that purchase, use or receive products or services.

Our purpose is to improve outcomes for current and future consumers and our strategic objectives are:

• to enhance understanding and awareness of consumer issues by strengthening the evidence base
• to serve the needs and aspirations of current and future consumers by inspiring and influencing the public, private and third sectors
• to enable the active participation of consumers in a fairer economy by improving access to information and support

Consumer Scotland uses data, research and analysis to inform our work on the key issues facing consumers in Scotland. In conjunction with that evidence base we seek a consumer perspective through the application of the consumer principles of access, choice, safety, information, fairness, representation, sustainability and redress.

We work across the private, public and third sectors and have a particular focus on three consumer challenges: affordability, climate change mitigation and adaptation, and consumers in vulnerable circumstances.

Consumer Scotland is the levy-funded advocacy body on postal services for consumers in Scotland. As a new body, we set out to create an evidence base to inform our policy positions for consumers of postal services in Scotland. This included commissioning YouGov plc to conduct a survey around attitudes to postal services. Data was collected online between 20 February to 14 March 2023, with a total sample size of 2,007 individuals. The figures have been weighted by gender, age, social grade, region and urban/rural area and are representative of all Scottish adults (age 16+).

We have already published three reports on insights gained from this research:

• The Universal Postal Service
• The Parcels Market in Scotland
• The affordability of the Universal Postal Service

This fourth and final report will consider what the research tells us about the experience of detriment within the postal sector, focusing on parcels market issues. It was completed in May 2024, however publication was delayed due to the pre-election period.

Our research found that significant numbers of consumers in Scotland experienced issues when receiving parcels. We also found a discrepancy between the proportion of consumers reporting that they had experienced a “problem” such as a parcel being damaged or lost, and the proportion reporting that they had experienced one or more of a longer list of “issues” that also included inconveniences such as delivery delays or parcels being left insecure.

When asked whether they had experienced problems with either a parcel or letter related service during the 12 months prior to spring 2023, more than one in three consumers in Scotland (38%) answered yes.[1] Problems were more commonly experienced with parcel-related services (33%)[2] than letter-related services (13%).[3] However, this appears to be only part of wider set of challenges being experienced by consumers with much higher numbers reporting experiencing ‘issues’ rather than ‘problems’, as set out in the chart below.

Context – The Requirements on Parcel Operators in Complaints Handling

Redress is a core consumer principle; when something goes wrong, it is important that consumers are able to access support to resolve the problem.

Currently the majority of consumers primarily receive parcels from retailers having bought goods online. In this scenario, the Consumer Rights Act 2015 (CRA) holds the sender rather than the parcel operator responsible for the safe delivery of a parcel. However, despite responsibility lying with the retailer, parcel operators are still required to have effective redress systems, as per Consumer Protection Condition 3.2 imposed by Ofcom in 2017.

In July 2022 Ofcom published new guidance setting out what they expect parcel operators to provide around complaints handling. The guidance came into effect in April 2023 and requires parcel operators to provide:

• clear information on who consumers should contact to make a complaint. Postal operators should ensure that they provide clear information to both senders and addressees of parcels about who to contact to make a complaint. They should also ensure that that information is clearly and prominently set out to consumers (for example on their websites and in any emails or messages sent to consumers)
• clear and timely signposting to retailers’ contact and complaints channel. Where postal operators receive complaints from consumers that need to be dealt with by a retailer, postal operators should provide clear and timely information to the customer regarding the need to contact the retailer[25]

Our research covers the period of 12 months prior to March 2023. As it predates the implementation of the new guidance from Ofcom, it not only reflects why the guidance was required, but may also serve as a useful baseline to measure its effectiveness.

Where consumers direct complaints

Our research suggests that a sizeable minority of consumers do not make formal complaints when experiencing a problem. Our analysis found that 68% of those experiencing an issue had made a direct complaint either to the parcel operator, the sender (either retailer or friend / family member), or both.[26] This means that around one third made no direct complaints, instead choosing alternative actions such as posting on social media or complaining to friends and family, or doing nothing.

When consumers wish to complain, the research indicates that they are uncertain about where to direct this. Our findings show that 24% of people experiencing detriment chose to complain to both the parcel operator and the sender, compared to 20% who complained only to the parcel operator, and 24% who complained only to the sender.[27]

Consumers should know or be able to find information easily on who is liable for issues and damages, and where they should direct their complaints. However, the above findings suggest that more could be done to make this more widely known – with large numbers of consumers standing to benefit from increased clarity on where responsibility lies for parcel issues. Currently there appear to be few incentives for retailers and parcel operators to work together to improve consumer information around liability and action may be required to address this.

Complaints handling processes and outcomes

Our research further indicates there is room for improvement in complaint handling processes. Of those consumers who made complaints to retailers, 19% reported this experience as either very or quite difficult. While this is a significant proportion of consumers reporting a difficult experience, the research found that consumers experienced even greater challenges when making a complaint to a parcel operator – with 61% of those complaining to a parcel company reporting it to be either very or quite difficult.[28]

With around 6 in 10 finding it hard to complain to parcel operators there may be a particular risk of detriment for consumers who send parcels. This is a substantial proportion of the Scottish population as our research found that 77% of consumers in Scotland send parcels at least occasionally (i.e. less than once a month).[29] In the absence of a retailer in these scenarios, consumers are entirely reliant on the complaints systems of parcel operators to resolve any problems that may occur.

While we have not attempted to quantify in this briefing the size of the market for parcels sent by consumers, there are a number of trends to indicate that this may be an area of growth now and in the future. For example, new platforms for consumers to buy and sell clothing which have grown in popularity with consumers^[30], as well as surges in sales in other online marketplaces selling second-hand goods such as eBay and Amazon.[31] Until recently it was relatively difficult for consumers to use other parcel operators when sending a parcel to other consumers, with most consumers using Royal Mail as it was the monopoly provider of parcel services through the Post Office until 2019. This is now beginning to change, as shown in Ofcom research on Consumer to Anywhere (C2X) or Consumer to Consumer (C2C), which found that while parcel senders, hobby sellers and SMEs still used Royal Mail most often, there were some who used operators such as Parcelforce, Evri and others most often.[32]

This may reflect that parcel operators are increasingly offering services to consumers in more convenient and easy to access ways - such as under the new deal between Evri, DPD and Post Office that allows consumers to drop off and pick up parcels in some branches,[33] and the offering from a number of parcel operators that includes drop-off points, collection from home addresses or lockers for sending and receiving parcels.[34]

As the market develops, it is important that the processes to support access to redress for consumers across the entire parcel delivery industry are robust and deliver positive consumer outcomes.

When we look at complaint outcomes, as opposed to whether complaints are made, our research identifies a mixed picture in relation to satisfaction. Slightly more people who complained to a parcel operator reported being satisfied with the outcome (39%) as opposed to dissatisfied (35%), however these differences are marginal. Overall, it is a cause for concern that more than a third of consumers report dissatisfaction with the outcome of their complaint to a parcel operator.[35]

While our research predates the implementation of Ofcom’s new guidance around complaint handling, more recent research has not yet shown a significant improvement in consumer satisfaction. Research published by Ofcom in August 2023, four months after the implementation of the guidance, found that fewer than half of consumers were happy with the handling of their complaint (43%) or resolution of their complaint (47%).[36] This is not a significant improvement on our own findings. While Ofcom’s research covered a period both before and after the new guidance took effect, there was a lengthy notification period for parcel operators prior to implementation and therefore it might have been expected that some immediate improvement would have been achieved.

Key Findings

Consumer Scotland’s research has shown that parcel delivery services in Scotland appear to have significant room for improvement. These improvements relate to reducing the prevalence of issues and problems in parcel deliveries and in improving the ability for consumers to access redress when things go wrong.

A third of consumers in Scotland reported experiencing a “problem” with parcel deliveries during a 12-month period. However when prompted to think about experience of a wide range of issues including delay and inconvenience as well as “problems” such as lost or damaged parcels, the number who had experienced one or more of these rose to 60%.

While the most common issue experienced was a delay in delivery, more serious issues such as parcels never arriving or arriving damaged were also widely reported.

The research further identifies the prevalence of poor delivery practices which may contribute to parcels going missing or being damaged. Experiences such as parcels being left exposed to weather, in insecure locations including in full public view, or left with unknown neighbours were all reported.

When problems do occur, it is important that good redress processes are available, however our research highlighted the difficulties that consumers experience with complaints processes.

Widespread lack of understanding around who is responsible for safe delivery was evident. While significant numbers (68%) were prepared to make a complaint when experiencing postal detriment, there was confusion over where to direct it. The Consumer Rights Act 2015 is clear that it is the sender’s responsibility to ensure safe delivery of parcels, however less than half of people (48%) complained to the sender.

Where consumers are senders the parcel operator is their only course of redress, so parcel operators also have an important role to play in the complaints landscape. Despite this, 61% of consumers reported finding it difficult to make complaints to parcel operators.

Alongside access to redress it is important that complaints system deliver good consumer outcomes. However, our research found roughly equal numbers of consumers were satisfied (39%) as opposed to dissatisfied (35%) with the outcome of their parcel complaint.

New guidance for parcel delivery companies on complaints handling came into force in April 2023. Our research data predates this guidance and can therefore serve as a baseline to measure the effectiveness of this change in improving consumers’ experience in the parcel market.

Recommendations

Based on our research findings set out above, Consumer Scotland is making the following recommendations to improve consumer outcomes in the parcels market:

For Ofcom:

• Ofcom should set out in more detail its approach to monitoring the impact of the new complaints guidance for parcel operators. This should include clear success criteria; monitoring and reporting timelines and measures; and details of the range of regulatory actions that Ofcom will take if improvements in consumer outcomes are not achieved by April 2025
• Ofcom should consider its future strategy for publication of data on consumers’ experiences of complaints in the parcel sector, drawing on its expertise in publishing similar data for other sectors that it regulates. More regular, detailed complaints data from the regulator can support improved transparency and awareness for consumers in their interactions with retailers and operators
• Ofcom should publish market volumes for consumer to anywhere (C2X) and consumer to consumer (C2C) markets to provide clear public information on the relative size of these markets and help improve consumer understanding where the overall balance of redress responsibilities lies between retailers and parcel operators
• Ofcom should engage with the Competition and Markets Authority to identify opportunities for cross-regulatory working to improve the outcomes of consumers receiving parcels from online retailers, specifically to improve consumer awareness of where to complain if they experience a problem relating to their delivery
• Ofcom should split out the Annual Monitoring Report on the Postal Market by nation level, similar to the Connected Nations reports, to ensure that there is detail on how the parcel market is functioning for each nation in the UK. Given the different geographic, market and policy context for consumers in the different nations, it is important that any variations in experience are monitored and understood, to support effective responses to these

For Parcel Operators:

• all parcel operators should review their complaints procedures in line with the new guidance from Ofcom and should proactively publish details of the steps they have taken to improve their processes for consumers, along with regular data about the number and types of complaints they have received and the actions they have taken to address these

For Online Retailers:

• online retailers should ensure that they clearly explain the sender’s legal liability to ensure safe delivery at the point of purchase. This should include clear information about where consumers should direct any complaints about their delivery experience

[1] Consumer Scotland Post Users Survey – Q31. Thinking about the last twelve months, have you had any problems with a [specified] service? The specified services were parcel-related services, for example a parcel was damaged or lost before you received it, and letter-related services.

Answers were combined for the purposes of analysis.

[2] Consumer Scotland Post Users Survey – Q31_1. Thinking about the last twelve months, have you had any problems with a parcel-related service? For example, a parcel was damaged or lost before you received it.

[3] Consumer Scotland Post Users Survey – Q31_2. Thinking about the last twelve months, have you had any problems with a letter-related service?

[4] Consumer Scotland Post Users Survey – Q34. In the past 12 months, have you experienced any of the following problems when [specified] couriers or postal operators have delivered parcels to you. Please exclude click-and-collect purchases where you buy online and collect from the same retailer's shop. The specified service providers were: Royal Mail, FedEx, Evri, Parcelforce, DPD, UPS, DHL, Collect+, Amazon, Yodel

Answers were combined for the purposes of this analysis

[5] Measuring user experience of parcel delivery to residential addresses (ofcom.org.uk) The slight difference in results could be due to Ofcom’s research having a different sample population (UK-wide vs Scotland-specific) or having been carried out at a different time (Ofcom’s research was carried out in two waves in January 2023 and July / August 2023, while our research was carried out in a single wave in February 2023).

[6] Consumer Scotland Post Users Survey – Q34. In the past 12 months, have you experienced any of the following problems when [specified] couriers or postal operators have delivered parcels to you. Please exclude click-and-collect purchases where you buy online and collect from the same retailer's shop. The specified service providers were: Royal Mail, FedEx, Evri, Parcelforce, DPD, UPS, DHL, Collect+, Amazon, Yodel

Answers were combined for the purposes of this analysis

[7] ibid

[8] ibid

[9] Consumer Scotland analysis of respondent data from Ofcom’s residential postal tracker 2023 identifies a figure of 7.3% for consumers in Scotland experiencing a lost parcel over the previous 12 month period (fieldwork conducted in monthly waves between January and December 2023); Ofcom’s parcel research data, quoted in the annual post monitoring report, identifies a figure of 19% for consumers in Scotland experiencing a lost packet or parcel over the previous 12 month period (fieldwork conducted in January 2023 and July / August 2023).

[10] Calculation based on numbers of adults in Scotland aged 16+ based on 2022 mid-year population estimates produced by NRS (n = 4,555,808) - Mid-2022 Population Estimates Scotland | National Records of Scotland (nrscotland.gov.uk)

[11] Consumer Scotland Post Users Survey – Q34. In the past 12 months, have you experienced any of the following problems when [specified] couriers or postal operators have delivered parcels to you. Please exclude click-and-collect purchases where you buy online and collect from the same retailer's shop. The specified service providers were: Royal Mail, FedEx, Evri, Parcelforce, DPD, UPS, DHL, Collect+, Amazon, Yodel

Answers were combined for the purposes of this analysis

[12] ibid

[13] ibid

[14] ibid

[15] ibid

[16] Consumer Scotland Post Users Survey – Q36. How frequently have you experienced problems with [the specified courier or postal operator]? The specified service providers were: Royal Mail, FedEx, Evri, Parcelforce, DPD, UPS, DHL, Collect+, Amazon, Yodel

Answers were combined for the purposes of this analysis.

[17] Consumer Scotland Post Users Survey – Q34. In the past 12 months, have you experienced any of the following problems when [specified] couriers or postal operators have delivered parcels to you. Please exclude click-and-collect purchases where you buy online and collect from the same retailer's shop. The specified service providers were: Royal Mail, FedEx, Evri, Parcelforce, DPD, UPS, DHL, Collect+, Amazon, Yodel

[18] ibid

[19] ibid

[20] Analysis of our research sample shows that 65% of Bungalow occupants were in the 65+ age-group

[21] ibid

[22] https://www.ofcom.org.uk/__data/assets/pdf_file/0032/272795/post-monitoring-report-2022-23.pdf

[23] ibid

[24] https://www.ofcom.org.uk/__data/assets/pdf_file/0032/272795/post-monitoring-report-2022-23.pdf

[25] Annex 4 - Guidance on Complaints Handling (ofcom.org.uk)

[26] Consumer Scotland Post Users Survey – Q37. Thinking about the last time you experienced a problem with a courier or postal operator, what did you do? (Choose all that apply)

Answers were combined for the purposes of this analysis.

[27] ibid

[28] Consumer Scotland Post Users Survey – Q40. How easy or not did you find it to complain to the [specified service provider]? Specified service providers were parcel operator and retailer.

[29] Consumer Scotland Post Users Survey – Q2. For the following question, by 'parcels', we mean any parcels from a birthday gift to returning something bought online. Please don't include anything connected with your work. How often, if at all, do you send parcels?

[30] https://www.cosmopolitan.com/uk/fashion/style/a42918644/secondhand-shopping-apps-addiction/; https://www.theguardian.com/business/2023/nov/29/online-marketplaces-report-surge-in-sales-of-secondhand-goods

[31] https://www.theguardian.com/business/2023/nov/29/online-marketplaces-report-surge-in-sales-of-secondhand-goods

[32] https://www.ofcom.org.uk/__data/assets/pdf_file/0031/229288/c2x-parcels-consumer-research.pdf

[33] https://www.bbc.co.uk/news/business-67336778

[34] https://www.which.co.uk/reviews/best-and-worst-shops/article/best-delivery-companies-2023-adzRt3m47ABD

[35] Consumer Scotland Post Users Survey – Q41. To what extent were you satisfied or dissatisfied with the outcome to that complaint? (If you did not receive a response or the complaint is still being investigated, please select the relevant 'Not applicable' option)

[36] Measuring user experience of parcel delivery to residential addresses (ofcom.org.uk)