Australia Post's surprise delivery fees 'killing' some small businesses

Australia Post's surprise delivery fees are 'silently killing' some small businesses Small businesses across the nation are being hit with extra fees from Australia Post, which they argue are unfair and eating into already shrinking profit margins. The ABC has spoken to numerous business owners who regularly send parcels to their customers and have been stung by "underpaid postage fees". This occurs when Australia Post claims the business owner did not pay enough postage — and sends them an invoice for "underpaid" fees after the parcel has been shipped or delivered. Future parcels cannot be sent until the fees are paid, forcing business owners to come up with the money or risk putting their business on hold. Fashion boutique owner Sam Kemp, based in regional Victoria, said these additional fees were unjustified and financially stressful. "We are absorbing these costs within our business … it's silently killing small businesses," Ms Kemp said. One legal expert was concerned this practice from Australia Post could be a breach of its contract, depending on the circumstances. "If the small business has underpaid according to the terms with Australia Post, [then] Australia Post can ask for the fee to be made up … it has a right to claim the fee," said Melbourne University professor Jeannie Paterson, who specialises in consumer protection law. "But if Australia Post is claiming a fee it's not entitled to … [it would] possibly mean that Australia Post is either in breach of contract, is engaging in a fraudulent practice, or it's at least engaging in misleading conduct in relation to its customers." In a statement to the ABC, an Australia Post spokesperson said: "Australia Post processes hundreds of millions of parcels each year, with the vast majority accurately assessed for size and weight using sophisticated automation technology." "Our automatic size and weight scanning technology is highly accurate, checked daily and independently verified in line with the National Measurement Act. This ensures a consistent, fair approach for all customers and helps maintain efficiency and safety of our network." Automatic process needs to be accurate Every dollar counts for small businesses, which operate with some of the slimmest profit margins in the country. It's why every time Sunshine Coast business owner Emma Kenney receives an underpaid postage fee, it's stressful. "The financial impact of the underpaid postage fees is actually enormous, and it can take the whole profit from a package that I've sent out," said Ms Kenney, who sells women's and kids' clothing and accessories. Feeling unfairly targeted, Ms Kenney decided to spend several hours disputing dozens of her underpaid fees online. To her surprise, Australia Post dropped several of those charges. One email from Australia Post said: "I have reviewed the scans, and I can see two different sets of dimensions and weight recorded … I believe another parcel has moved closer to your [sic] causing the incorrect reading." "I have removed the under paid postage fees of [sic] from your account and you no longer need to pay this." Although Australia Post uses an automatic size and weight scanning technology, which it claims is "highly accurate", it would not tell ABC News the error rate due to commercial confidentiality. Professor Paterson said transparency around this data was important and that if Australia Post made a mistake, there needed to be "a straightforward process" to dispute it. 'Double dipping' allegations Frustrated with unpaid postage fees, small business owner Sam Kemp lodged an online survey to see if other businesses were also impacted. More than 170 businesses responded, with fees ranging from a few a month to more than 10 a week, costing businesses between $100 and $30,000. "I have done everything possible to work with Australia Post … I've changed my bags, I've changed the way we send parcels, and still I am getting [charged] underpaid fees," she said. "How is that fair to then come back after I have been quoted and paid a shipping fee, and then you're coming back to double dip because you don't think I've paid enough?" If left unchecked, Professor Paterson warned errors within automatic systems could become "systemic". "If Australia Post is using an automated system, it's doing that for efficiency grounds, but it has the capacity to make that system very accurate," she said. "Any automated system needs to have good governance, safeguards, human oversight, and one of those good governance steps is to be monitoring false positives, and indeed false negatives, to make sure the system is performing as accepted." Complaint with the Ombudsman Ms Kemp has lodged a complaint with the Commonwealth Ombudsman and is waiting on an outcome. Speaking broadly, a spokesperson for the Ombudsman said in 2025–26, it received a small number of complaints related to small businesses and underpaid postage fees, making up less than 0.5 per cent of total Postal Industry Ombudsman complaints in the financial year. "Given the small number of complaints, the office is not currently undertaking or considering a systemic investigation into this issue, but is aware of community concerns," the spokesperson said. But Professor Paterson said that did not necessarily mean it was a minor problem, and that more data was needed. "It may be [that] underpaid postage fees are not a significant system issue … or it may be small businesses don't consider complaining is worthwhile or don't realise they have been charged on a flawed basis," she said. The Ombudsman said it first raised concerns with Australia Post about billing issues for business customers in 2024. "As a result, Australia Post implemented a range of operational improvements including adjusting tolerance levels on scanning equipment, introducing controls to avoid more than one parcel being weighed at a time, and strengthening calibration and record-keeping processes," the spokesperson said.