Information

Statement of principles for parcel deliveries: review

In November 2018, the Scottish Government launched the Fairer Deliveries For All: An Action Plan which listed eight key actions to tackle the unfair and discriminatory parcel delivery charges faced by communities in remote and rural Scotland. This report is in response to action point 4.


4. Stakeholder Perspectives

4.1 Introduction

A series of meetings and telephone interviews were undertaken with the Scottish Government and partner organisations to gauge awareness and views on the reach and impact of the Statement of Principles.

We consulted with thirteen individuals across ten organisations. Among others, this included Citizens Advice Scotland (CAS), the Consumer Protection Partnership (CPP), Advertising Standards Authority (ASA), Highland Council Trading Standards, and four delivery operators (Appendix A).

All of the individuals/organisations consulted have been highly engaged with the issue of unfair parcel delivery surcharging over a number of years - some, such as CAS and the Consumer Council for Northern Ireland (CCNI), have also published extensive research on the issue. The focus of the consultations was on establishing what role the Statement of Principles has played, and views on how effective it has been or has the potential to be.

4.2 Awareness and Use of the Statement of Principles

The main view of stakeholders was that while awareness of the issue of unfair parcel delivery surcharging has grown in recent years, particularly in Scotland, specific awareness of the Statement of Principles among retailers, delivery operators and the wider public is more limited. This links to a point made in Chapter 3 around the lack of an awareness raising campaign of the Statement of Principles.

As highlighted above, some consultees had been involved in the development and drafting of the Principles. However, the overall sense from stakeholders is that the Statement of Principles has not been regularly used or referenced since that time. This is perhaps not surprising given that the Principles are aimed at online retailers. That being said, reference was made to the promotion of the Principles across various websites (e.g. CAS, Delivery Law UK).

It was reported that the increased profile of the issue of unfair parcel delivery surcharging has in large part been due to:

  • the focus and effort placed on it by various stakeholders (e.g. CAS, CPP, Highland Council, ASA, political representatives);
  • the prominence it has been given in parliament;
  • high profile news coverage; and
  • the growing importance of ecommerce.

The general consensus is that the Statement of Principles has often been, at best, a footnote within this wider activity to tackle the issue - "it is not widely known as it has no status" (the Statement of Principles has no legal status).

That being said, stakeholders felt that the Statement of Principles has played a role in helping to raise the profile of the issue, and has enabled a positive direction of travel - at what was then a relatively early stage of the overall journey in stimulating debate on the issue of parcel delivery surcharging. The subsequent development of the Fairer Deliveries For All: An Action Plan was mentioned by stakeholders, and considered to be another positive step.

In this sense, the Statement of Principles is viewed favourably as part of the wider "package" of actions and activities that have been taken forward to address the issue (e.g. campaigning, debate, research, enforcement). However, it was reported that there has been no specific focus on encouraging online retailers to adopt the Principles (i.e. the intended audience). As such, awareness and use of the Statement of Principles is considered to be limited.

Some stakeholders reported that the Statement of Principles has, however, been referenced in materials that they or partners have produced. For example, Highland Council Trading Standards enclosed the Statement of Principles within a round of enforcement letters.

The general sense, however, is that reference has lessened over time. Here, stakeholders made reference to more recent developments and comprehensive tools, such as the Delivery Law website. Another example provided was that the enforcement notice issued by the ASA (2018) made no reference to the Statement of Principles.

Highland Council emphasised that having the UK Government "stamp" on the Statement of Principles was helpful/useful when approaching retailers and local government trading standards colleagues in other parts of the UK, where awareness of the issue is lower (as consumers in these areas are not impacted by unfair surcharging, so trading standards there are rarely dealing directly with complaints).

4.3 The Wider Picture

Views are mixed on whether the situation is improving.

Stakeholders said that the Statement of Principles covers what are effectively two separate issues:

  • the transparency of charges, having clear information about deliveries, and no misleading omissions; and
  • the existence, extent and fairness of any surcharge.

It was reported that the transparency issue is already covered by various legislation and self-regulation (e.g. The Consumer Rights Act 2015, Consumer Protection from Unfair Trading Regulations 2008, the Committee of Advertising Practice Code), and that more proactive enforcement is now also taking place. Nonetheless, it was reported by both Trading Standards and the ASA that they do not go out of their way to seek out breaches of the law, and are reliant on consumers bringing genuine cases to light.

There is a feeling that work has "gone as far as it can" in this area. Effort has gone into raising the profile of the transparency of charges, and following through with enforcement action where required. Key players within the CPP and the ASA are highly engaged with the issue, and along with Trading Standards, reported a strong level of compliance when taking enforcement action. However, there is recognition that they cannot single-handedly contact every ecommerce trader. It is felt that the major marketplaces (e.g. eBay and Amazon) have a role to play here, as many smaller traders make use of these platforms.

Therefore, as this casework is generated by consumer complaints, these agencies are said to be reliant on a continued public focus on the issue, as well as consumers being more aware of their rights and of the responsibilities of retailers. It is felt that this requires ongoing work - the Delivery Law website being a good example of one way this is being done.

The second issue covered by the Statement of Principles is felt to be more complex: the level and fairness of any surcharge. In particular, it was reported that this is outwith the remit of existing legislation, which makes it challenging to gauge progress on the extent to which this particular issue has been addressed.

While it was reported that some retailers have stopped surcharging (e.g. Argos[24] and Wayfair[25]), one of the biggest ecommerce platforms, Amazon Marketplace, began permitting it in 2019,[26] a reverse of its previous policy laid out before the Scottish Affairs Committee (2018).[27]

The CPP reported that it is trying to enhance its understanding of surcharging, and more specifically the basis on which it is calculated and used by delivery operators. The CPP has also asked that Ofcom use its information gathering powers to request this technical information from delivery companies - this work is being led by CCNI.

There is a feeling that if the situation is improving, it would be fair to attribute this to the collective efforts of Scottish Government and key stakeholders, including the work of individual MSPs and MPs, in pressuring retailers and keeping the issue in the public eye. It was reported that maintaining a high profile encourages consumers to raise complaints and, where appropriate, leads to enforcement action.

Although it is reported that larger retailers have typically been the focus of press coverage around unfair delivery charges, it is felt that they are now likely to have a handle on the issue and complying with legislation. The extreme examples of excessive delivery charges and unlawful practice are now said to be more likely to come from smaller traders (e.g. those dealing with fewer orders to remote and rural areas).

4.4 Content of the Principles and Barriers to Adoption

Stakeholders are, as a rule, not regularly using or referring to the Statement of Principles - and did not have particularly strong views on its content.

Some, however, felt that the Principles do not go far enough, and are fundamentally limited by its status as a voluntary best practice code.

Some stakeholders made reference to the Statement of Principles being developed as a "compromise" between different parties. The result is that there is little to disagree with, but also that the Principles are worded in such a way that retailers can and would say they are already adhering to it.

For example, it was reported that ecommerce businesses will not want to limit their customer base - it is "commercially not sensible to disenfranchise consumers". They are therefore unlikely to want to limit geographic coverage unless there is a clear justification for so doing.

It is reported that ensuring delivery pricing information is clear and upfront is already written into law (i.e. the Consumer Protection from Unfair Trading Regulations 2008 & Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013), and has been enforced by the ASA and Trading Standards on that basis. It is felt that this element of the Statement of Principles could therefore be strengthened to reflect this position.

Some stakeholders felt that, if the Statement of Principles is to be relaunched or renewed, work should go into looking at the detail of the Principles, including the wording. The focus should be on simplification. It was reported that there are various strands of existing legislation, and that the challenge would be to tie it all together in a simple yet meaningful way.

It was also mentioned that the first Principle appears to be contradictory - pricing policies should "not discriminate against consumers on the basis of their location", but then adds that surcharges should only be applied where they can be justified. Amending this to read "unfairly discriminate" would be clearer.

The Statement of Principles is not felt to be controversial in terms of tone and content, and so the main barrier to adoption for online retailers is generally considered by stakeholders to be a lack of awareness. It is recognised that many, particularly larger retailers, will already be complying with the Principles in practice.

Presently, it is reported that there is little for retailers to gain from formally adopting the Principles, and that the "owners" of the Statement of Principles (the Scottish Government, UK Government, and CPP) have rarely - if at all - engaged retailers.

4.5 Developing a Pledge

Consultees were asked for their thoughts on whether there would be value in developing a "simple pledge" that retailers could sign up to, based on the Principles.

There was some uncertainty about exactly what form this would take, and a range of comments were provided:

  • there are already a sizeable number of voluntary accreditations that businesses can sign up to - it may be hard to make an impact with a new code of practice;
  • other voluntary schemes, such as the Scottish Business Pledge, tend to have a broader remit and cross-cutting themes. With parcel deliveries, it may be hard to get businesses to sign up to a scheme where the issue is of relevance to only a small proportion of their total sales;
  • it would effectively be a relaunch of the existing Statement of Principles - "rerunning the conversation from 2012" - just simplifying, clarifying or shortening the Principles may not necessarily mean it will have a greater impact; and
  • it may be more useful to focus on other actions proposed in the Fairer Deliveries For All: An Action Plan (e.g. furthering understanding of what a fair delivery price is through the interactive data hub, improving postcode classifications, and exploring innovative solutions through the Improving Consumer Outcomes Fund).

Officials from the Highland Council Trading Standards felt that there is a clear case for introducing some form of quality mark or accreditation scheme. This is something that has been explored in the past, although these officials recognise that Highland Council does not have the resources to introduce it on its own. It would also be strongly reliant on retailers wanting to be part of it, and it was felt that this remains unclear.

4.6 Extending to Delivery Operators

Views on whether the Statement of Principles should be extended to apply to parcel delivery operators, and whether this would be an effective mechanism to tackle the issue are also mixed. In part, this is because there is felt to be some "buck-passing" between retailers and delivery operators on where responsibility lies for the issue of parcel delivery surcharging.

It is reported that the parcel delivery market is highly competitive and couriers emphasise that they continue to look for ways to be more efficient and lower costs, so it is "not in their interests" to put up prices for consumers or retailers beyond what is deemed necessary.

It is not clear that, by itself, extending the remit of the Statement of Principles to delivery operators would have the desired impact of pushing parcel delivery operators to resolve issues around unfair surcharging.

Delivery operators were also asked if they feel they have a responsibility to advise their retail customers on best practice and regulatory issues around fair deliveries. One responded positively to this, commenting that retailers are "coming to us as experts" in logistics, and it would be similar to how they already advise retailers about statutory return periods (albeit there is a clear commercial incentive for couriers to make retailers aware of this). However, another delivery operator argued that they do not have a role to play here, saying it is "not our job to be police of the retail industry", and that this should fall to relevant regulators and public authorities.

4.7 Other Possible Solutions

It is widely felt that there is no "magic bullet" to solving this issue, but there is recognition that there is value in organisations continuing to work together to improve the situation, and that considerable progress has been made. The ongoing rationale for a collaborative and collective effort is clear.

One consultee described it as "a messy combination of different activities that has improved things in a relatively short period of time".

Nonetheless, it is felt that the multi-partner approach can be a cause for confusion - particularly for retailers and delivery operators that are less engaged with the process, with sporadic requests for meetings/input and calls for evidence from various agencies, MSPs, MPs, etc.

Concerns over postcode classifications were repeated - and stakeholders pointed to a separate action within the Fairer Deliveries For All: An Action Plan to address this.

Some consultees felt quite strongly that the existing strategy of voluntary engagement and enforcement where there is a direct breach of the law (when this is reported) has run out of steam, and there is a need for much stronger action with statutory underpinning. In particular, this is considered necessary to tackle the issue of cost - it is acknowledged that the work that is being done to tackle misleading information is now having an impact.

Examples provided of what this could look like included:

  • compelling retailers to offer the cheapest (cost efficient) delivery option available for an area;
  • steeper penalties for companies that breach advertising law/codes of practice; and
  • greater regulation of the courier market.

Specific reference was also made to Drew Hendry MP's Private Members' Bill of February 2016,[28] which proposed a fair delivery quality mark for retailers and to establish penalties for false advertising, although the Bill did not progress beyond a first reading.

Contact

Email: ConsumerandCompetition@gov.scot

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