In 1995, the U.S. Postal Service implemented the Postal Technology Management Plan, an initiative designed to gradually replace mechanical postage meters, which according to the USPS are susceptible to tampering, counterfeiting or general misuse, with more secure and cost-effective digital metering technology.
The USPS initiative will clearly change the landscape of postage metering options for all mailers. With Phases I and II now complete, all mechanical meters and those that require manual resetting should be out of use. Phases III and IV call for the replacement of letterpress meters in the field with digital meters by
Metering costs are generally thought to be limited to the meter rental, maintenance fees and the cost of consumables (ink, print heads). However, mailers who will continue to meter face the expense of replacing assets which have likely been fully depreciated and will continue to incur several other significant costs as well:
1. Digital ink cartridges cost more than the ink for mechanical meters; they age and cannot be refilled.
2. Meters increase the footprint as well as cost of
3. The cash flow associated with meters is more expensive than other postage payment methods since mailers need to "fill" their meters (i.e. pay for postage) sometimes days or weeks prior to the actual submission of the mailing to USPS.
4. High-speed digital metering solutions with inkjet print capabilities cost upwards of $39,000 and may still force mailers to choose between print fidelity and cycle speed on the equipment.
The anticipated expense to implement digital metering technology will significantly impact the cost to produce each mailpiece and ultimately the profitability of businesses of all sizes and in every industry.
Many mailers don't realize that they have options when deciding how to pay for postage. The USPS offers three choices:
Pre-canceled stamps: Used by fewer than five percent of First and Standard Class mailers, these special stamps are purchased at a low postage rate. The difference in postage is paid when mail is delivered to the post office.
Postage meters: An estimated 30% of all First and Standard Class mailers print postage directly onto a mailpiece using a device that is rented from the USPS. Postage on meters is just like cash; it must be accounted for and, once printed onto an envelope, has real value that may not be 100% reclaimable if the envelope is damaged or ages.
Permit imprints: Nearly 65% of First and Standard Class mailers overall pay postage using a mailing permit. The key to this process is the postage indicia. When presented to the USPS, permit mail must either be identical or be accompanied by a report detailing its contents. The permit specifies the source of postage funds, which are due at the time of mailing.
Mailers can use the combination of payment methods that best meets their requirements without fear of reducing their workshare discounts on postage. Paying with a permit is routinely recognized as the most productive and cost-effective method, especially in light of the expense and effort required to migrate to digital meters. However, even with the obvious advantages to using permits for postage payment, many mailers hesitate to make the conversion. Why? There are four primary reasons, each of which may no longer be valid:
Meters are easy to use Meters bolt onto inserting equipment and postage is deducted as it is used. Meter vendors provide a means of accounting for postage. USPS relations are kept to a minimum.
Date stamps may be required on outgoing mail This is particularly important in insurance and other regulated industries, where a "mailed on" date may be necessary for legal purposes. While the documentation submitted to USPS with a permit mailing would reflect the delivery date, the meter mark on the exterior of a mailpiece tells the recipient when a piece was processed.
Permit indicia looks different from meter marks Traditional permits vary significantly enough from meter imprints to clearly distinguish First-Class from Standard mail.
Permit-based payment methods require time to prepare the mail Using standard permit mail techniques requires mailers to segregate jobs by weight category, which takes additional effort to manage and can jeopardize volume-based postage discounts. Manifest mailing procedures may be used when piece weight varies within a mailing, but each mailpiece must display a keyline of postal information above the delivery address; this demands time and IT resources to modify the application.
While these were once valid hesitations to using permits, the USPS initiatives that affect meters, meter marks and permit indicia render these concerns unfounded. Together, these changes result in meter marks that are nearly impossible to duplicate and clearly distinguishable from the original postage imprint. Furthermore, new USPS-approved permit formats include dates and cancellations so they more closely resemble the familiar meter marks and provide the "mailed on" date required by some mailers.
Major vendors are sensitive to the need for permit-based payment methods to be as easy for mailers to use as meters have been and are actively developing alternatives that address this need. This includes alternatives that minimize or eliminate the need for modifications to documents or operational procedures in order to use permit-based postage payment methods.
Clearly, key business drivers, whether regulatory or brand related, can influence the decision to refrain from implementing a permit mail solution. However, available postage payment alternatives offer most mailing operations the benefit of cost savings and process efficiencies that can result in lasting strategic advantages. Every mailer should examine the need for postage meters.
Sarah Elliott is BÖWE BELL + HOWELL Software Business Solutions' Business Manager of Postage and Data Management Solutions. Contact her at 410-949-2630.