Anastasios Siampos was suspicious after selling an iPhone for £275 on eBay. The buyer claimed it was defective and, though Siampos contested this, eBay instructed the buyer to return it using Royal Mail’s 48-hour tracked delivery service. Two days later eBay refunded the buyer, insisting that Royal Mail’s tracker showed the parcel had been successfully returned. Siampos, however, had received nothing. When he contacted Royal Mail he found the parcel had indeed been delivered, but not to his address. Extraordinarily, the tracking update only confirms an item has been delivered to the postcode without specifying the property. There are 53 properties in Siampos’s postcode.

Online selling platforms, such as eBay, rely on tracker information as proof an item has been returned and the sender can be refunded. Nowhere on Royal Mail’s website does it clarify that items are only tracked to the postcode – a loophole that has been exploited by fraudsters to steal goods.

“The customer service team seemed to be very familiar with the situation and says there’s been a surge of such incidents,” said Siampos. “They explained unscrupulous eBay buyers set up the tracked service to the seller’s address online, download the label generated by Royal Mail, use Photoshop to change the house number to another within the same postcode, then send an empty package.

“Unlike its signed-for services, Royal Mail does not know the precise address a tracking number is associated with, just the postcode. It delivers based on the address on the package. A householder receives an empty package and bins it, while Royal Mail’s system shows it delivered, so eBay can process the refund.”

Royal Mail told the Observer it was aware of similar scams and was working to identify the culprits.

EBay refunded Siampos two days after the Observer got involved, and said it was “working hard with Royal Mail to address the very small number of cases like this one”. But it continues to use tracking information – recommended for goods worth less than £100 – to justify a refund, rather than requiring returns to be signed for.

Many rural homes are still identified by name only and one postcode can be shared by dozens of properties. Couriers on tight schedules can struggle to identify the correct recipient.

“This issue highlights the fact postcodes are based on out-of-date technology,” said David Jinks, head of consumer research for online delivery service ParcelHero, who is calling for the system to be overhauled. “It’s not just eBay. Amazon packages are known to be delivered to wrong addresses, and it can be difficult for the seller to prove it was delivered to another house if those who took delivery remain silent.

“The problem can be aggravated by the fact that not every delivery company has tracking based on Ordnance Survey mapping and data, which is tied to the postcode database. That means further errors can be introduced.”

Jan Kowalski was left £3,148 out of pocket when two camera lenses ordered from Amazon failed to arrive. An apparently auto-generated letter from Amazon insisted that a “timed geocode stamp” showed the parcel had been delivered to the correct address, and advised Kowalski to report the matter to the police.

It said it would reconsider the case if he supplied a crime reference number and a copy of a police report. Kowalski persuaded the police to investigate but, when an officer contacted Amazon, he was sent an identical response directing him to the police. Amazon refused to investigate further without a police report, which the officer was barred from supplying without a freedom of information request. “Amazon is hiding behind a request that I am not able to legally fulfil,” said Kowalski.

Amazon only admitted the parcel had been delivered to the wrong address after the Observer intervened. It refunded the cost of the lenses and added a £500 voucher and a basket of sweets as goodwill. It denied identical automated responses were generated by complaints about missing deliveries and insisted that all such issues were dealt with individually.

Some delivery firms require couriers to photograph the front door as evidence of where a parcel was delivered, but new mapping technologies could help make absolutely sure that the front door is the correct one.

Google has split the world into alphanumeric “plus codes” that pinpoint a specific building, including remote villages that don’t have street names or numbers. The 11-digit codes are identified by clicking and holding on a location on Google maps, but are hard to memorise and a single mistyped digit would send a courier to the wrong address.

Postcodes were amazing for the job they were designed to do, but now they are not accurate enough Chris Sheldrick, what3words

A British startup, what3words, has launched a rival system that divides the world into 57 trillion 10ft squares and assigns each one a unique three-word address. This, like Google’s plus codes, pinpoints a specific destination – from a barn to a beach hut. Former events organiser Chris Sheldrick devised the system with three friends after becoming frustrated by errant deliveries and unreliable satnavs. “I grew up on a farm, and our postcode points to the middle of a field, so we were always receiving mail for our neighbours and vice versa,” he said.

“When I was organising events, musicians would continually turn up at the wrong site entrance or be unable to find the venue down unmarked tracks, and I wanted something simple that would take people and packages straight to their destination.”

His free app identifies the three-word address for a chosen location and pinpoints it on a GPS navigation system. The technology is now embedded in new Mercedes-Benz cars and TomTom navigation, and used by firms including Airbnb, Domino’s and Lonely Planet.

Last year, the lead GP on the Isle of Mull asked all his patients to sign up to it as medical staff struggled to find remote homes on unnamed lanes.

Sheldrick said the company was in talks with several UK delivery firms in the hope of extending his innovation to the postal network. “Postcodes are amazing for the job they were designed to do, which was to sort mail, but now they’re being used for navigation systems and, since they can cover such large areas, they are simply not accurate enough,” he said.

Royal Mail said: “We pride ourselves on the accuracy and integrity of our delivery network. Royal Mail’s postcode address file covers over 30 million deliverable UK addresses across 1.8 million postcodes and is the most effective, efficient and secure way to pinpoint delivery points. Almost 5,000 changes are made to the file each day to ensure it’s the most accurate and up-to-date addressing database.”