Lee Valley targets Canada Post in lawsuit over shipping charges
Last Updated: Friday, January 4, 2008 | 1:00 PM ET
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Courier shipping charges levied by Canada Post are at the centre of a class action suit that, if successful, could see at least 57,000 commercial customers refunded overpayments.
The Ontario Superior Court certified the suit in December, allowing an Ottawa-based hardware and gardening chain store, Lee Valley, to proceed with its legal argument against Canada Post.
At issue is the way Canada Post measures and charges for oversized, lightweight parcels. Lee Valley alleges it has overcharged commercial customers for several years.
According to court documents, up until 2000, the crown corporation charged customers based on the weight of the parcel as defined under the Weights and Measures Act.
Around 2000, Canada Post started charging commercial courier fees based on something called a "volumetric weight," taking into account the fact a package might weigh very little, but still take up as much room on a truck as a heavier item.
Because Canada Post requires commercial customers to weigh parcels and pay in advance, it then verifies those charges using a piece of equipment called a "cubiscan."
Lee Valley argues in court documents — which have not been proven in court — that this system "greatly overstates the true volume of any irregularly-shaped parcel."
Each time Canada Post verified Lee Valley's estimates for shipping charges, the price went up, Lee Valley president Robin Lee told CBC News. The company spends $7 million a year on Canada Post shipping charges.
"They only raised the postage, they did not lower the postage … How is it that we don't have any parcels where there are refunds on what we declared?" Lee asked.
"Canada Post's answer was we don't refund if you over-declare. Essentially what they said is we keep the change if you over-declare."
While Canada Post spokesman John Caines declined to offer details since the case is now before the courts, he told CBC News that the crown corporation is comfortable with its position.
"We measure like any other courier company does, and have for years," Caines said.
He said Canada Post was the first courier company to give refunds to commercial customers for overpayments — a policy it implemented in January 2007.
Lee estimates Canada Post has so far refunded more than $1 million.
While he was at pains to say that Canada Post provides good service and that he understands the need to charge for oversized parcels, Lee takes issue with the notion that Canada Post felt it could "keep the change."
"Canada Post has unjustly enriched themselves. They've made money they shouldn't have," he said. 'We want our change back."
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