A 32-year-old Queenstown woman, contracted by NZ Post, was arrested on Friday by police after they were notified by the company of concerns over undelivered mail to the Fernhill area.
Police began an investigation on Friday and made the arrest after they recovered a substantial amount of mail, including parcels and letters.
NZ Post media communications manager Michael Tull said the alleged crime was "a deeply serious failure" by the individual and the company was "completely disappointed".
"There is no excuse for it and we apologise to those who have been affected.
"There is a sense of betrayal.
"This is someone you place trust in and the public place trust in."
Hundreds of complaints from residents in the area about missing mail have been made to NZ Post during the past two years.
Detective Grant Miller, of Queenstown, said "thousands" of mailed envelopes and packages were retrieved from the woman's address, which she shared with flatmates.
This included 30 trays that contained 100 envelopes each.
The woman, who lives in a large house at Frankton, had stacked mail inside and outside the property, he said.
"The mail had clearly not made it to Fernhill at all. As a result of information we were given we found the mail spread throughout the property," Det Miller said.
The woman will appear in the Queenstown District Court on Monday charged with theft by a person in a special relationship, which carries a maximum penalty of seven years' imprisonment.
Further charges specific to the Postal Act were likely, police said.
Mr Tull said NZ Post employed 2000 postmen and women nationwide who delivered, on average, 1000 items a day each and 750 million envelopes and packages a year.
The woman had lost her job, and would be prohibited from entering any New Zealand Post store, Mr Tull said.
He accepted there would be concerns about the fact complaints of missing mail had been received for two years.
"Certainly, from our end, we will be looking into ... if there is something we can learn from this. There may have been an opportunity where we could have identified this earlier."
Police would assist NZ Post to deliver the mail as soon as possible.
Police said if anybody in the Fernhill area believed they were missing mail they should contact NZ Post on 0800 501 501.
