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Executive Summary of the
Investigation Report on
Issue and Sale of Special Stamps and Philatelic Products
Introduction
Apart from the regular postal services, the Hong Kong Post Office (PO) has a long history of its philatelic operations on the issue and sale of special stamps and other philatelic products for collection by philatelists in Hong Kong and overseas. Towards the end of 1996, the Office of The Ombudsman (this Office) noted the upsurge of keen public interest in the purchase of the special stamps and philatelic products issued by the PO and the increased public concern over the sales arrangement. This Office therefore conducted a preliminary study on the subject.
2.The study confirmed that there was intense public concern over a number of issues including notably the then very sizeable upsurge of public demand for and the alleged speculative activities on the stamps and philatelic items (particularly those bearing the Queen’s portrait or the Royal Cypher which were said to be having special speculative values after the change of sovereignty of Hong Kong in 1997), the administrative arrangements of the PO for the issue and sale of these special stamp products, and whether the regular postal services to other customers of the PO had been affected by the special stamp issue programmes.
3.To further examine the issues involved, The Ombudsman announced in March 1997 his decision to conduct a direct investigation on the subject under Section 7(1)(a)(ii) of The Ombudsman Ordinance.
Purpose of the Investigation
4. The purpose of the investigation is to study the issue and sale of special stamps and philatelic products by the PO, including -
(a) an overview of the philatelic operations of the PO;
(b)whether the current measures to tackle the alleged speculative activities on special stamp products are effective;
(c)what other procedures that the Administration intends to put in place to refine the issue and sales arrangements having regard to the high demand from the public, most of which has been concentrated on the first days of issue.
Philatelic Operations of the Hong Kong Post Office
5. The PO was first established on 25 August 1841 and the first set of Hong Kong stamps was issued 21 years later. The present authority of the PO to issue postage stamps is set out in Section 28 of the Post Office Regulations (Cap. 98). The PO issues two main kinds of stamps : Definitive Stamps and Special Stamps, which may be printed in the formats of souvenir sheets and stamp sheetlets. Other major philatelic products issued by the PO include Presentation Pack, Annual Pack, First Day Covers, and Special Date-stamps to commemorate new stamp issues and other special events.
6.The philatelic revenues to the PO in the past 12 years from 1985/86 to 1996/97 are as follows -
Year Philatelic Revenue HK$M
1985/8621.9
1986/8727.9
1987/8832.4
1988/8931.9
1989/9034.6
1990/9137.4
1991/9255.7
1992/9392.9
1993/94 120.7
1994/9596.2
1995/96 113.9
1996/97 1,406.8
The upsurge in revenue in 1996/97 has arisen from the increasing demands for Hong Kong stamps in late 1996/early 1997 and the income from the “HONG KONG ’97 Stamp Exhibition” held in February 1997.
7.The PO currently operates a number of sales arrangements for receiving advance orders on special stamps and philatelic products. These include : Local Advance Order Service (LAOS), School Advance Order Service, Standing Order Service for Stamp Dealers, Mail Order Service for Overseas Customers and Agents, and Local Standing Order Service (LSOS) which was first introduced for the new stamps and products issued in 1997. In the past, special off-counter sales arrangements were also provided for its own staff and its special clients for public relations purpose (e.g. banks with which the post office had regular dealings).
8.To tackle the problems associated with speculative activities on stamp products, the PO was noted to have previously taken the following measures -
(a)increasing the printing quantities;
(b)imposing a sales restriction on each customer;
(c)refunding the price of the first day covers to customers who had purchased the covers but were unable to buy the corresponding new special stamps.
9.After commencement of this investigation, the PO announced in April 1997 the following new arrangements for stamp sales -
(a)selling new stamps on Sundays;
(b)increasing the sales quota from 100 sets of stamps to 250 sets per transaction;
(c)introducing the enhanced Local Advance Order Service to include mint stamps with no upper limit on the orders;
(d)Guarantee to meet all advance orders;
(e)opening all post offices at 8:00 a.m. on the Sundays with stamp issues;
(f)increasing the security guards/PO staff and further co-operation with the Police on crowd control;
(g)ceasing the off-counter sales arrangements for PO staff and special clients.
Overall Observations
10.This Office notes that the crux of the whole subject of the issue and sale of special stamps and philatelic products lies in how to strike a balance between the ‘supply’ from the PO and the ‘demand’ from the philatelists, stamp collectors and the general public within and outside Hong Kong. The issue has also been complicated by the unprecedented demands at a time of the change of sovereignty of Hong Kong in 1997. This investigation has been conducted at a time of changes in the markets for the Hong Kong stamp products. As a result, the PO has also been in the process of taking necessary steps to respond to the changes in order to improve on the arrangements for the sale of stamps to the public so that the long-term viability of the local philatelic market and the overall interests of the PO customers can be maintained and protected.
Conclusion
11.The Ombudsman makes the following conclusion in this investigation -
(a)The long queues of customers waiting for hours at the post offices and the subsequent public comments and complaints have highlighted areas of deficiency in the PO’s previous sales arrangements and its measures for tackling the alleged speculative activities on special stamp products.
(b)In response, the PO has made positive efforts in meeting the challenges of the unprecedented demand. The various new arrangements the PO has introduced for its stamp sales have brought about considerable improvements in enhancing the efficiency and fairness of the sales arrangements. Nevertheless, the public comments and suggestions on these new arrangements indicate that there is still room for refinement.
(c)Lastly, the PO must strive to continuously improve on its philatelic service to the public, while maintaining and developing its other postal services so as to achieve an overall high level of customer satisfaction.
Recommendations
12.For this investigation, The Ombudsman has made 18 recommendations for consideration by the PO with a view to further improving its philatelic service to the public. They are -
(a)Stamp Issuing Programme
(i)To plan the annual issuing programme on the types and the issue dates of special stamps and philatelic products with better co-ordination and logistic support.
(ii)If ad hoc sales of stamp products become necessary due to unforeseen circumstances, appropriate sales arrangements should be adopted to avoid any unfairness and inconvenience to the customers and any anticipated crowd control problems.
(b)Sales Arrangements
(iii) For equity reasons, to cease permanently the off-counter sales arrangements to PO staff and special clients.
(iv) To critically examine the various concerns expressed by the public on the LSOS and devise a more user-friendly ordering service in the future phases of the scheme.
(v)To further improve the enhanced LAOS to attract more customers to use the ordering service and minimise the need for them to queue up.
(vi)In view of the considerable gap between the standing order service conditions offered to stamp dealers and those to the LSOS customers, the PO should further review the respective conditions of the standing order services.
(vii) To continue to review and develop staff deployment plans and to explore the feasibility of employing part-time staff to ensure that adequate service is provided to all customers at all times.
(viii) To explore the feasibility of contracting out, in the longer term, part or all of the physical operations of its philatelic service.
(c)Customer Service
(ix) To review the current practice of not disclosing to the public the total printing quantities of new stamps, and consider means to increase the overall transparency of the philatelic market.
(x)To review the relevant operational aspects with the printers and set up contingency plans to avoid any recurrence of postponing the issue date of new stamps.
(xi) To explore the feasibility for customers to place orders under the LAOS, LSOS and other advance order services through the telephone or Internet.
(xii) To review the current Post Office Guide on repurchasing unused stamps from customers while maintaining suitable deterrent effects against speculation activities.
(xiii) To continue to gauge the public demands for its products and assess the printing quantities accordingly so as to alleviate the queuing/ crowding situation at the post offices on the first day of issue.
(xiv) To examine the usefulness of selling pre-packaged products at the counters so as to shorten the sale processing time.
(xv)To continue to remind customers to evaluate their needs carefully before placing orders/making purchases.
(d)Publicity
(xvi) To accord wide publicity of the annual stamp issuing programmes to customers and the public through various channels.
(xvii) To continue to actively publicise and promote the advance order services to customers.
(xviii) To further enhance the publicity of the various aspects of the philatelic service by providing more relevant information via the current PO’s home page on the Internet.
Response from the Post Office
13.The PO has accepted the conclusion and agreed to implement the 18 recommendations in this investigation report.
Final Remarks
14.The Ombudsman is pleased to learn that the conclusion and all the 18 recommendations of this investigation have been accepted by the PO. It is hoped that the PO will continue to make further improvements on the issue and sale of special stamps and the overall philatelic service provided to the public.
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Office of The Ombudsman
Ref. OMB/WP/14/1 S.F. 16 II
October 1997
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