offering free postage is not viable anymore?

I would like to hear some thoughts and maybe get some advice on this,

 

I currently offer free postage for most of my listings to keep up with competition since a lot of sellers in the same space offer free postage.

 

It seems to be hurting my performance more than anything at the moment, since with free postage you can only basically offer 2nd class delivery for low value items due to pricing, I normally do not and have not had this issue in the past but in the past week I have had 5 requests advising that customers have not received there orders even though they were sent out on time and that the postage receipt has been provided to each customer to show that there order has been sent on time. This is worrying because the customers are not happy with the orders not being delivered on time and still obviously wanting refunds even though they had selected the free postage and that royal mail has there orders but due to being second class there's no tracking provided with this.

 

It has also tanked my late delivery to where I am now concerned I will loose my top rated seller due to this reason, I have been advised I can appeal but they it gets declined automatically because it checks against royal mail tracking then when you contact customer service they advise they can only remove 5 at a time which when you deal with a lot of orders each day that does not really help to much.

 

Is it even worth offering free postage anymore or just charging for tracked 48 hour, I did use to only offer tracked service which slowed down sales since my listings would be pushed down below other sellers which offer free postage and what protection does sellers actually get into regards of offering free postage. 

 

Thank you.

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