The Royal Mail is planning to reduce compensation for lost or damaged letters and parcels under a series of changes.
The company said it intended to cut compensation for untracked first and second-class letters and parcels from £46 to £20 but will continue to pay compensation for delayed items.
The maximum compensation for lost or damaged recorded signed-for items will increase from £46 to £50 under the proposals, due to come into effect next year.
The Royal Mail is also proposing to allow heavier parcels to be posted second-class, with an added option of receiving a signature on delivery.
A statement said: "The proposal means Royal Mail's range of parcel products should be easier for consumers to understand and improve choice.
"They will have the ability for the first time to send parcels between 1kg and 20kg using Royal Mail's second-class service, with the added option to receive a signature on delivery.
"The proposal also includes introducing two broad parcel categories - small parcels and medium parcels. This will bring Royal Mail in line with other major postal operators, for example, in Germany, France and Italy."
Robert Hammond of Consumer Focus said: "Our research shows widespread confusion over the services Royal Mail offers, even with fundamental products such as first and second class postage.
"This confusion means people could be paying more for a premium product they don't actually require, or choosing an option offering less protection than they need if something happens to their item.
"We welcome Royal Mail's decision to changes names so they 'do what they say on the tin'. Cutting the number of parcel weight bands should also make it easier for consumers to identify the right service for them."