Retail Newsagent often receives calls from retailers in dispute with suppliers, from problems with clauses in contracts to unfair fees and service issues.

This week, East London retailer Kay Patel’s challenge over unfair fees has prompted an apology from PayPoint and a promise to review its processes after an issue with Collect+.

“I was contacted by a new rep who said PayPoint was underrepresented in the area and asked if I would be interested in installing a Collect+ point in my store,” says Mr Patel, of Global Food & Wine in East London. “We already had myHermes at the store, which the previous rep knew, so naturally I assumed these notes were passed on to the new rep. The rep didn’t say anything about it being a problem for us having another similar service in-store, so I didn’t think it was an issue.”

However, two weeks ago, Mr Patel received an email from PayPoint stating he was in breach of contract for offering a competitor parcel service. The email asks Mr Patel to review both services and determine which one is more beneficial to his business so that one can be removed.

“I replied saying that regrettably, I would stop Collect+,” says Mr Patel. “That’s when I received the bill.”

The bill, seen by RN, shows the itemised ‘cost of decommissioning’ as £500 plus VAT and ‘lost revenue’ as £1,953.40 plus VAT, calculated by multiplying the average monthly lost revenue by 24 months, the full length of the contract.

“I was shocked to receive the letter,” says Mr Patel. “The tone of the original email made it sound like it was a trivial matter – no one told me there would be an astronomical cost attached for removal. I’m six months into the contract already, so to charge me for 24 month’s lost revenue is wrong. And as for the £500 decommissioning cost; Collect+ doesn’t have any equipment other than the logo on my wall sign.”

Mr Patel got in touch with PayPoint to challenge the letter. “They were very nonchalant about it, saying that I am in breach of contract and that the rep wouldn’t have signed me up if I had myHermes in place, but he obviously did,” he says. “The onus should be on the rep to ask retailers the right questions to make sure we’re suitable candidates for their service and that we’re not automatically going to be in breach of contract. It’s not even me that wants the service removed – it’s them.”

Mr Patel decided to contact the NFRN, who took the issue up with PayPoint on his behalf.

Margaret McCloskey, head of operations at the NFRN, said: “The PayPoint rep should have carried out an analysis of the premises to know that the retailer did myHermes and known that to have Collect+ added would have constituted a breach in the retailer’s contract. For PayPoint to suggest that the retailer was then in breach was unfair and unjust, which included the termination of the terminal. PayPoint was informed by the NFRN to null and void the invoice.”

Mr Patel adds: “Every day I looked at my accounts to see if £3,000 had been taken.

“I’m luckily in a position to be able to absorb the cost and take it on the chin, but there are retailers out there struggling to pay their rent. PayPoint has now turned off the Collect+ facility without proper notice, so customers are being turned away. We only found out when a customer tried to drop off a parcel and the receipt told us there was an error and the account had been closed. I think it’s disgusting behaviour and a misuse of PayPoint’s dominant position in the marketplace.”

A spokesman for the company told RN PayPoint has apologised to Mr Patel and there will no longer be a charge for the removal of Collect+ from his store.

He adds: “We expect our team to deliver the best customer and contractual service to retailers and to offer retail solutions that support the growth of their businesses. On this occasion we have not met the high standards we set ourselves and will be reviewing our processes to ensure it does not happen again.”