Shrinking package: Australia Post hasn’t changed its lost delivery compensation for 30 years

WHILE the CEO’s package has been steadily growing, Australia Post has been slowly ripping off customers for 30 years.

Australia Post CEO Ahmed Fahour with Woolworths CEO Brad Banducci. Picture: Stuart McEvoy

WHILE Australia Post CEO Ahmed Fahour’s package is worth $5.6 million, yours is worth just $50 — and it’s shrinking all the time.

That’s the maximum amount you can claim back from Australia Post for a lost or damaged standard delivery. For registered post you can claim up to $100, and if you purchase insurance cover you can claim up to $5000.

But the standard $50 fee has not changed since 1987, meaning the amount of compensation paid has been steadily declining in real terms for three decades — the same $50 in 1987 would be worth $117 in today’s dollars.

In 2010, the Postal Industry Ombudsman raised the issue in a report, saying the low level of compensation was a regular complaint it received.

At the time, the Ombudsman recommended Australia Post conduct a formal review of its compensation rate — but nothing ever came of it.

“We consider that the steadily declining real compensation rate is worthy of note and will tend to steer customers towards the more expensive registered service,” the Ombudsman wrote.

“This has implications particularly for residents of regional and rural Australia, who have only limited access to competitors’ services. If this is deliberate Australia Post policy, then it may be a matter worthy of public debate.”

Canberra resident Justin Warnock, 32, lost a $120 Christmas present in the mail. He described the $50 liability cap, and the complaints process itself, as “woefully inadequate”.

“If your package never arrives it will take multiple interactions with Australia Post to get any information at all,” he said. “I honestly still have no idea when the matter will next be investigated or [whether] compensation will be offered.”

A postie on is beat.

The package, from a board game store in Sydney, was sent via Express Post on December 23 but didn’t arrive the next day as expected.

It was nearly two weeks between requesting Australia Post investigate the issue on January 6 to receiving an email back on January 18, when he was told the issue had to be raised by the sender. It wasn’t until February 2 that the store heard back.

“As Signature on Delivery and Extra Cover have not been purchased in this case, there is limited tracking capability on your item,” an Australia Post customer service rep wrote. “Next time you are sending a valuable or important parcel, I recommend that you opt for Extra Cover.”

Mr Warnock said if Australia Post was relying on the “parcels boom” to return to profitability, “given how hard it is to find this liability cap in their store or one their website, I think the $50 cap should be shouted from the rooftops”.

“The maximum $50 liability was set in 1987, increased to $75 in 1989, and then returned to $50 in 1996. I challenge you to time yourself finding this information on their website,” he said.

“To tell you the truth I couldn’t give two hoots [about the package], but nobody I’ve spoken to knows about this $50 thing. Most have used delivery for stuff that’s worth a bit more.”

In its 2010 report, the Ombudsman said while some form of compensation for service failure was a necessary feature of a postal service, it was also reasonable for Australia Post to limit its liability for loss and damage.

“Australia Post has no way of knowing the value of items that people may be sending,” the Ombudsman wrote. “Loss and damage may not be Australia Post’s fault. Limitation of liability is common in the postal and courier industry.

“As the level of standard compensation is a regular issue of complaint to our office, we decided to investigate why the compensation level has remained unchanged for so long. We do not claim to have the expertise to indicate an appropriate level of compensation.

“We do, however, consider it appropriate to investigate the process used by Australia Post to determine compensation levels given the substantial erosion in the value of the maximum payable.

“Australia Post considers that $100 was and remains an attractive basic compensation level for registered post, taking pricing and marketing considerations into account. It considers that the compensation level for ordinary items should be differentiated from registered post, effectively by being kept at half the level applicable to registered items.

“In our view, this forges an unwarranted and misleading link between the terms and conditions on which Australia Post offers its registered service, in relation to which it competes with other couriers and postal operators, and the terms and conditions on which Australia Post’s monopoly letters service is provided.”

While Australia Post never acted on the Ombudsman’s report, its own response provided at the time said that “given that the average compensation payout in the 2008/09 period was considerably less than $50 we believe that there is no justification for changing the current limit at this time”.

Australia Post would not reveal its figures for lost or damaged deliveries or how much compensation it pays out. In a statement, a spokeswoman said: “Our posties and delivery drivers work hard every day to ensure customers receive their mail on time.

“Fortunately instances of lost or delayed mail are rare. We take any complaint extremely seriously and we will investigate and provide appropriate compensation.

“The amount of compensation provided varies depending on what product the sender has used and whether additional Extra Cover has been purchased. When sending valuable items or important documents, we recommended customers use our Registered Post service which provides proof that the article was sent and proof that the article was received. Compensation for loss or damage of the article (up to $100) is included and extra cover for up to $5000 is also available.

“We encourage customers to contact us on 13 POST to discuss their specific inquiry if they believe a mail item has been lost or stolen. There are a number of contributing factors which may result in lost or delayed mail including incorrect addressing, vandalism or theft after delivery.”

Last week, Australia Post came under fire after CEO Ahmed Fahour’s $5.6 million package, consisting of a $4.4 million salary and $1.2 million bonus, were revealed by a parliamentary committee. Mr Fahour, Australia’s highest-paid public servant, will also be eligible for a $4.3 million lump sum retirement payout.

The government-owned business had attempted to prevent the release of the remuneration information, saying there was “no public interest” and that it may generate “unwarranted media attention”. Chairman John Stanhope later said Australia Post was “not trying to hide anything”.

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