Avoiding Royal Mail “Incorrect Label” Surcharges: A Guide for Small Businesses

Why are small businesses facing label surcharges?

Many small businesses are seeing unexpected surcharges for “unreadable” or “incorrectly applied” labels on Tracked 24 and Tracked 48 parcels. This guide explains what is happening, what has worked to stop the charges, and a simple checklist to reduce your risk.

What changed with Royal Mail label scanning

Royal Mail now uses automated machines with lasers to read the barcode and QR code on parcel labels. If the machine cannot read your code in one pass, a worker applies a new label by hand. That action triggers a surcharge on your account. The most common reasons are recorded as unreadable barcode or label incorrectly applied.

Why perfectly good labels still get flagged

In theory, surcharges should only appear when a sender makes a mistake. In practice, some businesses have seen charges even when labels appear clean and carefully applied. Based on experience, these are common triggers:

• Label crossing a seam or corner. Any crease through the barcode or QR code can confuse the scanner.
• Label on the smallest face of the box. Curved or tight surfaces make codes harder to read.
• Minor imperfections. Light print, wrinkles, bubbles, glare from tape over the code, or a slight tilt can cause scanning issues.
• Overly sensitive automation. Even tidy labels can be marked unreadable depending on how the system interprets them.

Our experience and why this matters

We began receiving weekly surcharges of around five pounds per affected parcel, on top of the original postage. When we challenged specific charges and asked for evidence, one photo provided did not even show our box. After persistent complaints, a Royal Mail representative visited our site, checked our labels and confirmed our process was sound.

The turning point came when we changed our packaging rather than our printer. We switched to a box size that gives a wide, flat panel. Now the label sits squarely in the middle of the largest side, well away from any edges or joins. Since making this change, the charges have stopped.

It does not feel fair

In our view, it is not right to charge businesses for a machine being so sensitive. The onus should be on the carrier to ensure its equipment reads standard labels reliably. Clearer communication and guidance would have helped businesses understand how to adapt before charges were applied.

What to do now: a practical checklist

Use the steps below for every parcel. Share this with anyone who prepares shipments in your team.

1. Always use the largest side. Place the label on the broadest, flattest panel of the box. The scanning machine automatically turns parcels to read the largest side, even if it is just one centimetre bigger, so labels on smaller sides are more likely to be missed.
2. Keep clear of edges and joins. Place the code fully on one surface. Do not cross seams, corners, or flap joins.
3. Print clean and clear. Use a well maintained thermal printer or high quality print settings. If the code looks light or patchy, reprint.
4. No wrinkles or bubbles. Smooth the label from the centre out. If it creases over the code, replace it.
5. Avoid shiny covers over the code. Do not place clear tape over the barcode or QR code. It can cause glare.
6. Square it up. Apply the label straight, not at an angle. Keep margins around the code.
7. Mind your box size. If your current carton forces the label near an edge, size up so the label sits comfortably in the middle.
8. Double check before dispatch. Quick visual checks save money. Look for creases, edge overlap, or smudged print.

How to reduce risk further

• Standardise placement. Mark a consistent spot on each box style where labels should go.
• Set a reprint rule. If a label is imperfect in the barcode area, reprint it.
• Keep consumables fresh. Replace thermal labels and printer heads on a sensible schedule.
• Document your process. A simple one page guide with photos reduces errors when staff rotate.

Monitoring and disputing charges

Check your weekly invoice as soon as it arrives. Look for wording such as unreadable barcode or label incorrectly applied. If you believe a charge is wrong, raise a ticket and ask for evidence. Keep a log of disputes with parcel references, dates, and any photos from your packing bench. If charges continue, request a site visit from a representative. An on site review can confirm you are following best practice.

When to consider packaging changes

If you still receive charges after following the checklist, review your packaging. Ask yourself:

• Does the label always fit fully on one face without touching a seam
• Is there at least one centimetre of margin around the code
• Is the face completely flat, with no bulge from internal contents

If not, trial a slightly larger carton or an alternative mailer with a wider front panel. A small change in dimensions can make a big difference.

Frequently asked questions

Do I need to change my printer
Not necessarily. Many issues come from placement rather than print hardware. Start with placement and packaging. If print quality is inconsistent, service or replace the printer head.

Can I put clear tape over the whole label for protection
It is safer to keep tape away from the barcode and QR code. Tape can create glare or introduce fine bubbles.

What if my products only fit in small boxes
Consider a slightly larger outer carton or a mailer that provides one wide, flat panel. The extra cost can be lower than repeated surcharges.

Final thoughts

Automated scanning should make delivery faster and more reliable. It should not penalise businesses that are applying labels carefully. If machinery is especially sensitive, we believe the carrier should refine the system or provide clearer guidance. Until that happens, the best defence is consistent placement on a flat panel, clean print, and a quick quality check before dispatch. These steps have removed the charges for us and should help other small businesses avoid surprise fees.