MSP welcomes Amazon's commitment to refund misleading fees

SNP MSP Richard Lochhead has welcomed a commitment from Amazon to refund “misleading” delivery charges during a session of the UK parliament’s Scottish Affairs Committee.

Mr Lochhead’s Fair Delivery Charges campaign has shone a light on the high fees faced by online shoppers in rural and Highland Scotland, which are often levied despite products being advertised as free delivery.

Under questioning by SNP MP Pete Wishart, Lesley Smith of Amazon said that customers “will be refunded if they have been misled.”

Amazon and eBay both confirmed that third-party sellers who overcharge customers will be expelled from their platforms.

Amazon previously made a commitment to Mr Lochhead that they would investigate sellers who his campaign had discovered were not upfront about delivery charges.

After receiving thousands of testimonials from the public, Mr Lochhead reported 124 companies to the Advertising Standards Authority.

Richard Lochhead commented:

“This is a welcome commitment by Amazon, that follows on from previous productive discussions I’ve had.

“Delivery fees faced by consumers in rural Scotland can be eye-watering and really hit families in the pocket.

“What really angers consumers is when companies advertise free delivery across the whole UK, but then say this doesn’t apply if you live in certain parts of Scotland. It’s welcome that Amazon are preparing to enforce the rules on marketplace sellers, but what we really need is real regulation.

“The UK government should listen to the overwhelming evidence about the unfair burden faced by consumers and take action.”

SNP MP Drew Hendry, who called for the Scottish Affairs Committee to investigate the issue, added:

“I am very pleased that following my call the Scottish Affairs Committee have investigated this important issue, exposing the completely unfair charges levied on many Scottish shoppers.

“Whilst we have had warm words from the UK Government, we have had no meaningful action and this must change.”

ENDS

Notes:

Amazon offers delivery charge refund for 'misleading' fees

http://www.heraldscotland.com/news/16051795.Amazon_offers_delivery_charge_refund_for__misleading__fees/

Mr Lochhead’s evidence to the Scottish Affairs Committee’s inquiry is below.

Dear Chair

I am writing to submit my evidence for the Scottish Affairs Committee’s inquiry into delivery charges in Scotland.

My campaign to seek action on this issue began in Moray but soon became a national campaign with support from across Scotland. I am therefore delighted that your committee is now investigating this issue following the cases highlighted by the campaign and by colleagues in the House of Commons in recent years such as Drew Hendry MP.

This submission outlines my experience as the Member of Scottish Parliament for Moray, a constituency where many people are affected by often unjustifiable parcel delivery surcharges. These extortionate surcharges continue to affect people in my constituency and across Scotland.

The cases that I highlighted which helped bring this issue to national attention included a case where Halfords wanted to charge £50 to a customer in Speyside for delivering a pair of car towels costing £5.99. I raised this issue at First Ministers Questions in December 2016 and the company subsequently reviewed its charges.

Other early cases included a surcharge of £60 for shipping a small item costing £8.99 to Fochabers. In another case, a constituent notified me that they could have spare car parts delivered from Germany for free while a UK retailer imposed a £45 surcharge. Such extreme cases are not uncommon and even some couriers tell me that the charges others are imposing are unjustified.

As part of the campaign, I created a website named fairdeliverycharges.scot which includes a petition that currently has over two thousand signatures.

There have been several key developments in my campaign. One such development was research I commissioned from the Scottish Parliament Information Centre. This research estimates that parcel delivery surcharges are costing customers in Scotland an eye-watering £36.3m more than the rest of the UK each year.

In addition, as part of my work with the Advertising Standards Authority (ASA), I produced a dossier containing a list of 124 companies that were brought to my attention through my campaign.

Below I summarise what I have found to be the ten key behaviours of those retailers and their courier partners that have attracted the ire of customers: 

1. Companies advertised “Free delivery” and then charged customers an additional charge at a later stage of the order process.
2. Companies advertised “Free mainland UK delivery” and then charged customers living in many parts of mainland Scotland that are not classed as “mainland UK”.
3. Companies advertised delivery to “Mainland UK” but subsequently said that they do not deliver to parts of Scotland.
4. Companies make no mention that they do not deliver to Scotland during the order process.  
5. Companies only tell customers of additional charges at the checkout stage.
6. Companies contacted customers after having already accepted the order and wanted the customer to pay an additional charge for delivery.
7. Companies took orders from customers but then cancelled the order after learning the customers address.
8. Customers who live in mainland Scotland were told that their address was classified as “offshore” or “island”.
9. Companies charged people living out with the region Highlands & Islands rates.
10. Customers faced significantly extended delivery times and longer than those advertised. 

For ease of reference, I attach my opening speech from my Members’ Debate in the Scottish Parliament on the issue which achieved cross party support. Both Scottish and UK Ministers have committed to looking into the situation and Amazon, Scottish Rural Action and several others have agreed to work with me on the issue.

As I am sure you are aware, there have been previous attempts to tackle rip of surcharges, for example the statement of principles drawn up by Scottish Ministers and stakeholders in 2014.  The first principle states that online retailers should not discriminate against consumers based on their location.  It also states there should be objective, justifiable criteria for surcharges.  Both of these principles are regularly being flouted by companies and I hope my submission demonstrates that. 

I trust this information is helpful to your consideration of this important issue. There is no place in Scotland or the rest of the UK for these kinds of discriminatory practices. I thank you for considering my evidence and look forward to the results of the committee’s investigation.

Sincerely

Richard Lochhead

MSP for Moray

Appendix I

Parcel Delivery Charges

Motion debated,

That the Parliament understands that, compared with other parts of the UK, people in Moray, the north of Scotland and other rural areas are often charged excessive rates for parcel deliveries; understands that recent examples of this practice include Halfords charging £50 to send towels, which cost only £5.99, to Speyside, and LloydsPharmacy charging £50 to send a mobility scooter to a terminally-ill woman in Keith, despite advertising free UK delivery online; recognises what it sees as the frustration of consumers living in postcodes such as IV and AB, who have to pay these charges, which it considers unfair; welcomes both Halfords and LloydsPharmacy reported decision to review their charging policies in response to public concern; acknowledges the importance of challenging companies over such policies, and notes the view that there is a need for the relevant authorities to address this issue, which it believes affects many thousands of households and businesses.

Richard Lochhead (Moray) (SNP): I thank the many members who signed my motion and are attending the debate. The cross-party support for an issue that affects homes and businesses across the country is most welcome.

I pay tribute to Drew Hendry MP, Citizens Advice Scotland, Highland Council and the many community campaigners—including Rebecca Wymer who runs Stacks bistro in John o’ Groats and who started her own petition in July—for previously highlighting the issue that we are debating. I say to all of them, and to members in the chamber, that I believe that December 2017 will go down as a turning point, when, with household budgets already under pressure, the people of Scotland will say enough is enough—no more rip-off parcel delivery surcharges. Hopefully, the authorities will also accept that real action is now required to address the issue.

More Scots than ever will shop online this Christmas, because better digital connectivity allows us to part with our cash without ever leaving our homes. For their part, retailers know that in today’s marketplace they need to sell online to compete. In rural areas in particular, the internet can be a godsend, especially for goods that are not available on our own doorsteps. Yet, for a large part of our country, online shopping comes with a big, expensive drawback. Many households and businesses are being ripped off by retailers who are charging jaw-dropping and completely unjustifiable sums for delivery.

Many retailers deliver free or at low cost elsewhere in the United Kingdom, but impose hefty surcharges to much of Scotland: a delivery fee of £50 was demanded for despatching a £5.99 pair of handtowels to a Speyside constituent of mine; a £60 surcharge was levied for sending a small £8.99 item—a nozzle for a washer—to Fochabers; and another Fochabers constituent purchased spare car parts from Germany with free delivery, rather than pay up to £45 for delivery from elsewhere in the UK.

What started as a Moray campaign has gone national. I have been contacted by people from throughout the country via fairdeliverycharges.scot and social media and I have learnt a lot. I can tell Alasdair Allan that I have been told that a pair of boxer shorts—not ones that I would wear personally—sold by the Lincolnshire-based Internet Fusion Ltd store and costing £19.91 can be delivered to Barra for an extra £33.94, but it costs only an extra £19.15 to get the order to Bulgaria, according to the website. I think that we can all agree that that example is completely bonkers.

There are many issues, of which lack of transparency is one. Disgracefully, consumers are sometimes not told about the surcharge until after they have completed their purchase. A lady near Inverurie bought an exercise bike at £155 plus £15.99 for delivery, which she thought was reasonable. The next day the company informed her that there would be an additional £34 surcharge due to her AB postcode.

Citizens Advice Scotland estimates that 1 million Scots are affected. It is important to be clear that not all retailers impose these surcharges and that others keep them reasonable. However, many do not keep the surcharges reasonable—they are like a delivery tax that costs much of Scotland millions of pounds a year. There is such an inconsistent picture. Some retailers offer free delivery to some or all postcodes, or minimal surcharges, but others apply huge surcharges. There is no rhyme nor reason to how many of the surcharges are calculated.

I have heard of cases in which the surcharges for delivery to addresses in Elgin, on the A96, with IV postcodes, are higher than delivery charges to nearby rural villages with AB postcodes, and cases in which the opposite is true. The blunt use of postcodes is a big problem. I visited a community in Moray where the boundary is a field. The houses with IV postcodes at one end of the field are subjected to huge surcharges, such as £32.99 delivery for a referee’s whistle and mini-wallet costing £7.95, while the houses at the other end get charged only £4.95 delivery for the same item. To add to the absurdity, delivery lorries using the A96 drive past the houses that are charged the higher surcharges. No wonder the public are completely exasperated.

According to the courier company Menzies, whose depot I visited and which delivers to all corners of the Highlands, many of the higher charges, such as a £74.99 surcharge for delivering a £61.99 kids toy, which was bought through Tesco Direct, are unjustifiable.

We know that it is not nearly as common for Scottish companies based in the north to surcharge customers in the far south of England. Johnstons of Elgin, for example, charges the same for delivery anywhere in the UK, yet Groupon, Kiddicare and others have been criticised for refusing to even deliver to the north of Scotland.

There is often geographical ignorance and flawed computer software. One lady told me that she was asked to pay a £70 surcharge for an item advertised as coming with free delivery. The reason for the surcharge was that her AB postcode put her in the Highlands. She explained that she lives in Stonehaven, next to the A90, but that did not wash. One man from mainland Argyll sent me his paperwork, which showed that the retailer had applied a £7.99 surcharge because his home was deemed to be offshore.

As we all know, astonishingly, some mainland Scottish postcodes are not mainland UK, according to many retailers. The banners emblazoned with claims boasting of free UK delivery are absolutely worthless once the customers get to the small print at the end of the ordering process—if there is even any small print there.

There have been attempts to tackle these rip-off surcharges. In 2014, ministers working with the industry and consumer groups drew up a statement of principles for retailers to follow. Some retailers stick by them; others ignore them. Principles relating to location, discrimination and transparency are being flouted by many retailers and courier companies. They are voluntary and are aimed only at retailers, not couriers, and they are largely ignored.

I recently met stakeholders in the Parliament and I was delighted to learn today that the minister plans to host a similar event. There is an appetite for more action, because too many Scots are being treated as second-class customers. UK, rather than Scottish, ministers have legislative responsibility, so it is time for them to investigate and regulate. After ruling out regulations in September, UK ministers this week seemed to be softening their position.

The Office of Communications regulates only the Royal Mail, the universal service provider. Regulating parcel deliveries, either through the Post Office legislation or consumer protection rules, which is a reserved issue, should be urgently considered. We must ensure that there is transparency before orders are placed, through better enforcement or better regulation.

Many retailers seem to be acting illegally, given the behaviours that I have outlined in the past few minutes. If delivery is free to what is referred to as the UK mainland, that must obviously include all of mainland Scotland.

In the meantime, customers can shop around and name and shame the worst offenders. Big retailers such as Halfords and LloydsPharmacy reviewed their charges after I contacted them, so they can change.

To end rip-off delivery charges, we need common standards by which all retailers and couriers must abide. I urge the minister, whom I met recently to discuss this issue, to take up the cudgels on behalf of customers and the people of Scotland, take the case to the retailers and couriers, lobby his UK counterparts and use the Scottish Parliament’s new powers over consumer advocacy and advice to tackle this issue. I ask Scottish and UK ministers to deliver an early Christmas present to up to 1 million Scots by pledging to tackle these rip-off delivery surcharges.