A B.C. small business owner’s complaint that Canada Post uses illegal “drip pricing” in online shipping services has been certified by the Federal Court as a class-action lawsuit.
The lawsuit seeks compensation from the troubled national postal service for adding a mandatory “fuel surcharge” late in the purchase process, after showing shipping rates. If successful, customers who used Canada Post’s online shipping tools in the last few years could be eligible for reimbursement.
Marci Deane filed a civil lawsuit in Federal Court last year alleging that three of Canada Post’s online shipping services failed to disclose the full price of shipping by adding a required additional charge for fuel after advertising a purchase price, in violation of the Competition Act.
She accused the Crown corporation of using banned “drip pricing” and “double ticketing” in its sales.
The additional charge to the price is significant.
The cost of the fuel surcharge is calculated as a percentage of the price of the shipping job — from a high of 26 per cent to a low of 13.75 per cent in April 2024, depending on service type and destination. Canada Post adjusts it weekly based on the price of fuel
Canada Post denies using “drip pricing” or “double ticketing.” The Crown corporation opposed the certification of Deane’s lawsuit as a class action.
Making it a class-action case means that if the lawsuit is successful, any damages assessed by a judge can apply to a wide group of people who suffered similar losses, rather than just Deane.
In court, Canada Post argued all pricing information is disclosed on a single webpage, during a single stage of the purchasing process. The company said customers are unable to complete their purchase without agreeing to the fuel surcharge, so they can change their mind before paying if they objected. They also argued that when opening an account to use its services, customers agree to terms that would allow fuel surcharges.
Deane complained of three of Canada Post’s online shipping services, called Snap Ship, Ship Online, and Shipping Manager. They allow online users to create, pay, and print shipping labels to send parcels.
Deane, as a small business owner, has been using Canada Post services and programs for businesses for more than 15 years, court heard.
While deciding whether Deane’s lawsuit should be a class-action suit, Justice Jocelyne Gagné was shown screen shots and videos of the Canada Post online purchase process and parsed the experience.
Deane showed the Snap Ship service in action. The video showed that after logging into her account and entering shipping information and destination, Canada Post displays four shipping options with prices, from regular parcel shipping to priority shipping. None of the quoted prices include a fuel surcharge.
Canada Post said that the onscreen box Deane showed was only part of a single, longer page of four successive stages where surcharges are shown in a separate summary box.
The judge found neither of their descriptions to be adequately accurate, noting that each successive box must be closed for the next to open and by the time the destination information is entered in a box, triggering a fuel surcharge being listed in the summary box, that summary is no longer visible onscreen. A user must scroll up to see it.
When the last box is filled out and closed, the page still doesn’t return to the summary page, the judge noted.
That stationary summary box was a change to the site made in July 2023, court heard. Before that, the summary box was dynamic, meaning it moved along with the cascading order process and was always visible.
The mechanics of the three online shipping tools are basically the same, but some have additional business options.
Ship Online is a service anyone can use to create paid shipping labels. Snap Ship is designed for small businesses doing regular low-volume shipping. Shipping Manager is designed for large volume commercial clients.
The Competition Act bans several sales tricks that are considered false or misleading representations in transactions.
“Drip pricing” is when a price is presented that is never attainable because obligatory charges are automatically added later in the purchase process (unless the fee is government mandated, such as a sales tax).
“Double ticketing” is when a product costs more than the lowest of two or more advertised prices, such as the same items having different price tags offered for sale at the same time.
For a claim to be certified as a class action, a court must rule that there is a reasonable cause of action, meaning a sound legal basis for complaining, and there must also be an identifiable group of people suffering the same alleged loss, among other considerations.
The damages claimed by Deane is the cost of the fuel surcharge in all transactions in the time frame, plus the cost of investigating and launching her lawsuit.
If Deane is successful, Canada Post could be forced to reimburse the fuel surcharges.
Certifying a suit as a class action does not assess the merits of it, only that it can appropriately move forward as a court action.
The parties and the judge looked carefully through previous class action competition-related complaints: one against Airbnb over service fees, one against Cineplex over buying online movie tickets, and the third against internet phone service provider Ooma.
Gagné, the judge, questioned how the same shipping transaction could be guilty of both drip pricing and double ticketing.
“One cannot say that Canada Post is, on one hand, adding price elements as the sale process unfolds, and, on the other hand, charging the higher of two or more prices clearly expressed,” Gagné wrote in her ruling, published Thursday.
Gagné rejected Deane’s claim against Canada Post of double ticketing but accepted her claim over drip pricing could proceed as a class action.
She defined the eligible class of claimants as Canadian residents charged fuel surcharges through Canada Post’s online shipping tools Snap Ship, Ship Online, and Shipping Manager after June 23, 2022.
The judge said who was a member of the group and how large it might be should be sorted out at trial. Receipts from customers show a fuel surcharge and Canada Post has online records of some users, she said.
• Email: ahumphreys@postmedia.com | X: AD_Humphreys
Our website is the place for the latest breaking news, exclusive scoops, longreads and provocative commentary. Please bookmark nationalpost.com and sign up for our newsletters here.