Saturday, January 5, 2008

Class Action Suit Against Canada Post

Lee Valley Tools Ltd. has initiated a class action suit against Canada Post over shipping charges. Before 7 years ago, Canada Post charged for shipping packages by weight. Then they introduced a new system where they charged for either weight or volume depending on which gave the higher charge.

The idea was to charge more for big bulky packages that take up a lot of space, but aren’t very heavy. This all sounds reasonable enough, except that Lee Valley alleges that the machine Canada Post uses to measure volume can overstate the volume by as much as 20%.

Another allegation against Canada Post in all this is that they keep any overpayments. Commercial customers have to weigh their packages and calculate the charges themselves. If Canada Post finds that the customer paid too little, they demand more money, but if the customer pays too much, Canada Post keeps the difference. Nice.

If Canada Post loses this suit, it could be very costly for them. Of course, if Canada Post loses and then finds a way to increase postal rates to pay for the losses, it’s not clear that the participants in this suit will be gaining much in the long term. I suppose principle counts for something, though.

Canada Post’s alleged wrongdoings are fairly minor compared to the things that some retailers pull:

“We don’t have any more of the $129 HD DVD players we advertised, but we have this better one for only $449.”

“Would you like to buy an extended warranty for only $79?” In most cases retailers will do anything they can to avoid losses on these warranties. They might as well be asking you “would you like to pay $79 extra for this item?”

See this post over on Ellen Roseman’s blog for more interesting customer service problems.

The difference between most retailers and Canada Post is choice. Canada Post is a monopoly protected by Canadian law. They have to be held in check or they will squeeze us for all we have. Most retailers have the constant threat of losing business to a competitor. If people don’t like how they are being treated, they can go elsewhere to buy things. If a retailer treats its customers badly, but the customers come back anyway, then those customers deserve what they get.

When the market can’t regulate the actions of a company with competition, as in the case of Canada Post, then the law must step in.

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