At Royal Mail we operate a clear and consistent credit policy for our Business customers. This policy is outlined below and explains how we determine credit limits and provide credit accounts, as well as our standard payment terms.

 

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This document sets out Royal Mail Group Ltd's credit policy in respect of the trading entity “Royal Mail”.  Royal Mail will only offer credit to its customers on terms which comply with this policy. 

1. Unless a customer has a credit account, Royal Mail will provide services only on receipt of cleared funds, pre-paid.

2. A minimum spend or volume threshold may be applied to justify the administrative costs of setting up and maintaining credit accounts.

3. For the purposes of this credit policy each legal entity will be treated as a separate customer.

4. Royal Mail’s payment terms for postal services are weekly invoicing with 30 calendar days to pay calculated from the invoice date (provided the customer is not in breach of its credit limit) or as otherwise agreed with Postcomm and published by Royal Mail in accordance with Condition 7 of its Licence.

5. Any alternative proposals in generic terms will be reviewed by Royal Mail’s Compliance Officer and will only be considered if they raise no compliance issues and are interest neutral.  These alternative arrangements will be made available to customers who meet the set criteria, and will not breach their credit limit.  No informal arrangements with customers will be considered.

6. Where a customer does not pay Royal Mail in accordance with its agreed credit terms Royal Mail shall be entitled to charge interest on all overdue amounts until payment is received in full. The annual rate of interest charged will be 4% above the Bank of England base rate, which prevails during the period of the overdue debt.

7. Royal Mail will accept the following methods of payment for settlement of accounts: Direct Debit, BACS/CHAPS, or company cheques. Payments in cash and by debit or credit card are accepted only at the discretion of Royal Mail. All payments must be received to the full value in pounds sterling.

8.  A maximum of two payment holidays in Royal Mail’s financial year may be allowed, provided the customer does not exceed his credit limit as a result of this.

Each holiday period must not exceed 30 calendar days, i.e. for a customer on standard terms the period of credit will extend to a total of 60 days.  A minimum of 30 days’ notice will be required prior to the commencement of any payment holiday period.

The customer will be required to pay Royal Mail an interest charge at a rate set by Royal Mail.

9. A customer’s credit limit will be set according to its creditworthiness, factors relevant to the assessment of which may include its trading history with Royal Mail, a Credit Referencing agency’s report, the length of time a company has been trading and, where appropriate, a check on the trading history of the company’s directors and officers.

10. A customer with no previous trading history may be granted a maximum of £5,000 credit and must undertake to pay by Direct Debit for at least two years.

11. Royal Mail will only consider credit in excess of this limit if it is supported by a Parent Company guarantee, a Bank guarantee, or a Merchant’s Deposit.

12. Royal Mail will review a customer’s credit limit either on request or on application for additional products or services where such spend will exceed the credit limit by £5k or more and or if Royal Mail has concerns regarding a customer’s creditworthiness.

13. Royal Mail is not obliged to give credit to every applicant.  Where credit is refused, Royal Mail will provide services to a customer only on receipt of cleared funds. 

14. Credit facilities will be withdrawn on an account basis if a customer persistently trades outside its credit limit or otherwise breaches the terms of its credit agreement. 

15. Credit facilities will be withdrawn if a customer makes fraudulent postings.