JOIN USThe department earned 824,000 pounds last year by auctioning items that got "lost" in the post, the Daily Express reported.
One valuable work of art - an untitled painting by Mathias Kauage, worth up to 10,000 pounds - was sold for just 20 pounds.
The painting had come all the way from Australia but reportedly vanished in the British postal system.
Its legal owner, Rebecca Hossack, who runs an art gallery in London, called the police after being approached by a man who bought the painting at an auction. He later agreed to return it to her.
Post which is not addressed properly, too big for letter boxes and not claimed from post offices, or with incorrect postage paid is sent to the National Returned Letter Centre in Belfast.
The centre stores items for four months, but if they remain unclaimed they are sent to Surrey-based Wellers Auction House to go under the hammer.
The centre in Belfast successfully redelivered 5.2 million items in 2010, but 20 million were left undelivered.
The auction policy has angered Britain's consumers.
Retired teacher John Beattie found his "lost" bagpipes for sale on eBay four years ago.
He sold the bagpipes to a collector in Belgium and sent them using Royal Mail but they never reached their destination and were sold for 60 pounds at an auction. Beattie spotted them again when the new buyer put the bagpipes up for sale on the internet.
"Auctioning off lost items could be regarded as a profitable business and the drive for profit could outstrip any moral or legal obligation to trace their rightful owners," postal industry expert Steve Lawson said.