Is the new Royal Mail parcel service good value?

Royal Mail has a new parcel pick-up service that will see it start collecting parcels right from your doorstep. But is it good value for your money?

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Royal Mail has introduced a brand new parcel pick-up service that will see postmen and women collect parcels directly from your doorstep for a small fee. But is the new service good value? Let’s find out.

How will the new Royal Mail parcel service work?

Royal Mail’s new service is part of the company’s aim to secure a bigger share of the booming parcel market. This boom is partly attributable to a surge in online shopping triggered by the coronavirus pandemic. The new service is bound to be particularly popular with the millions of people who are currently stuck at home due to the government’s tiered lockdowns.

Customers will be able to have parcels collected from their homes every day apart from Sundays and bank holidays. Royal Mail says that parcels can weigh up to 20kg but mustn’t be bigger than 61cm by 46cm by 46cm. There’s also a limit of five parcels per address per day.

To use the service, you need to book and pay in advance online. You’ll then have to print out a label at home to attach to the package. Bookings can be made up to five days in advance. For a next day collection, you have up to midnight the day before to make a booking.

Parcels can be handed to a postman or woman from your doorstep during their regular delivery rounds. Alternatively, you can leave them for collection in a designated ‘safe place’. 

What will it cost?

The cost for the new service is 72p per parcel in addition to postage costs.

For prepaid return items bought, for example, from online sellers, the cost is 60p per item.

Is the service good value?

Well, this depends. For example, if you live a distance from a Post Office, this new service might be perfect for you. It’s also a valuable service during these times of coronavirus, when we are being advised to stay at home as much as possible.

On the other hand, if the nearest Post Office is within walking distance, you can probably do without the extra expense of home collection.

Keep in mind also that there might be alternatives out there offering the same service at a much lower cost.

Though this is the first time that Royal Mail have offered such a service, the idea of parcel collection isn’t new. Competitors like Hermes, DPD and TNT already collect parcels from people’s homes. So, if you want to have your parcel picked up and delivered at the best possible price, it might be a good idea to first compare prices across all providers.

An online price comparison suggests that for smaller parcels that weigh up to 2kg, Royal Mail’s prices are unbeatable. For example, home collection and second class delivery for a 2kg small parcel using Royal Mail is £3.67 whereas, with a service such as Hermes, it is £4.92. 

But for larger, heavier parcels, you are much better off using other providers. The cost for the same home collection and delivery service for a 10kg parcel are £20.97 with Royal Mail and £7.72 with Hermes.

Takeaway

In a nutshell, it’s clear that the new Royal Mail parcel service has a place in the market. It could offer good value for those without easy access to a Post Office and those who could benefit from the convenience of having parcels collected from their doorsteps and delivered.

The Motley Fool receives compensation from some advertisers who provide products and services that may be covered by our editorial team. It’s one way we make money. But know that our editorial integrity and transparency matters most and our ratings aren’t influenced by compensation. The statements above are The Motley Fool’s alone and have not been provided or endorsed by bank advertisers. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Mastercard. The Motley Fool UK has recommended Barclays, Hargreaves Lansdown, HSBC Holdings, Lloyds Banking Group, and Tesco.

More on Personal Finance

UK financial background: share prices and stock graph overlaid on an image of the Union Jack
Investing Articles

2 FTSE shares taking on US tech giants — and quietly gaining ground

US tech stocks dominate headlines, but two UK tech firms are proving that FTSE shares can deliver strong growth, reliable…

Read more »

Note paper with question mark on orange background
Personal Finance

Should you invest your ISA in a model portfolio?

Which model ISA portfolios offer both high performance and low fees? Hargreaves Lansdown, Interactive Investor and AJ Bell go under…

Read more »

Economic Uncertainty Ahead Sign With Stormy Background
Personal Finance

Is it time to exit emerging markets investments?

Investors may well be sitting on losses from emerging markets funds. Is it worth keeping the faith for a sustained…

Read more »

Personal Finance

Share trading? Three shares with turnaround potential

Share trading has been difficult in 2022, but which companies have turnaround potential? Jo Groves takes a closer look at…

Read more »

Man using credit card and smartphone for purchasing goods online.
Personal Finance

Revealed! Why Gen Z may be the savviest generation when it comes to credit cards

New research reveals that Gen Z may be the most astute when it comes to credit cards. But why? And…

Read more »

Environmental technology concept.
Personal Finance

The 10 best-performing sectors for ISA investors

The best-performing sectors over the past year invested in real assets such as infrastructure, but is this trend set to…

Read more »

Road sign warning of a risk ahead
Personal Finance

Recession risk ‘on the rise’: is it time for investors to worry?

A major global bank has suggested the risk of a recession in the UK is 'on the rise'. So, should…

Read more »

pensive bearded business man sitting on chair looking out of the window
Personal Finance

1 in 4 cutting back on investments amid cost of living crisis

New research shows one in four investors have cut back on their investing contributions to cope with the rising cost…

Read more »