Postage Meters: Calculating Costs, Types, Purchasing Tips and Terms

Business.com / Business Solutions / Last Modified: February 22, 2017

In the U.S., postage meters cannot be purchased or sold, only rented or leased. Learn what hidden fees to be aware of when calculating costs

In the United States, postage meters cannot be purchased or sold— only rented or leased. This is because postage is considered a form of currency, which is tightly regulated by the U.S. Treasury. The United States Postal Service (USPS) determines the rules and regulations covering the use of postage meters. The USPS doesn’t sell or rent the meters itself, because that would interfere with private businesses. Postage meter add-ons, such as scales, stackers, and sealers, can be purchased separately or as part of a postage meter rental contract.

There is some competition between postage meter providers, so it’s worth comparing prices. Most postage meters can be rented for $20 to $50 a month, depending on the capabilities of the system. The meter provider will probably require a contract with a minimum amount of time the meter must be rented for. Check the responsibilities that are expected by your business with respect to renting the equipment to ensure that they’re understood and adhered to. Also remember: all postal fees for mail sent during the month are paid for on top of the rental fee.

Beyond the monthly rental fee, there are many small or hidden fees when renting postage meters that can really add up:

  • Insuring the machine
  • Adhesive tape or labels
  • Special inks required by the meter
  • Fee for refilling the machine with postage
  • Fee for resetting the postal rates in the machine
  • Property taxes on the equipment
  • Lease-termination fees
  • Scale rental fee or purchase price
  • Other add-ons: stapler, sorter, stacker, sealer, etc.

However, there are a few ways to lower the cost of supplies. Some postage meters will only use a narrow range of paper types and envelope sizes. Most providers will offer to sell these specific items, but the cost will usually be higher than that of comparable supplies at an office-supply store. Ask if your meter will require special ink only available from the equipment provider. Special inks can cost 15 or 20 times more than generic inks purchased from an office-supply store. Ideally, you want to use adhesive meter tape that is readily available from such stores—not special tape only available through the equipment vendor.

There are two main ways of refilling the postage meter with authorized postage. They are known as the pay-as-you-go system and the prepay system.

  • With the pay-as-you-go system, the postage meter tracks the costs of all postal items sent within a set time period, which is usually a month. At the end of this time, the provider bills the business for the postage costs incurred during that month. Most postage-meter providers charge for this service, usually in the range of $20 a month.
  • The prepay option allows a business to fill a postage meter with a set dollar amount that will be drawn down each time a letter or parcel is stamped. An automatic debit from an account can be arranged for this type of payment system, ensuring that the meter will never run out of funds.

Until recently, most postage meters had to be refilled at an official U.S. post office, which could require standing in line for long periods of time. But now, most postage meters can be refilled electronically without having to take the meter to the post office and without requiring a visit from the equipment provider.

Types of Postage Meters

All postage meters share some features, including being capable of printing postage for any type of mailing (domestic or international) and the ability to refill the postage, either in-person, by phone, by fax or by Internet connection. However, there are other important choices depending on a business’s budget and volume needs.

  • Small postage meters are ideal for a business that has a low volume of mail to be sent throughout a week, but which still has enough use for the machine to make renting a machine cost effective. A small machine will usually need an employee to manually feed envelopes into it when a postage mark is needed; however, there are some meters that are semi-automatic. Generally, these meters will have a speed of 15 to 40 letters per minute (LPM), a built-in scale that can measure the weight of mail up to a maximum of 10 pounds, and the ability to display a customizable graphic on the postage indicia if desired.
  • Medium-sized postage meters are ideal for medium to large businesses that have a large volume of mail to be sent, as they’re semi-automatic, and envelopes can be fed into the postage meter without the aid of an employee. These machines are capable of handling different sizes and shapes of mail, and they’ll have a general speed of 100 to 200 LPM, a built-in scale that weighs a maximum of 15 pounds with the option of adding an external weight system of anywhere up to 100 pounds, as well as the ability to add a customizable graphic if the company so desires. Models of this size also have the option of including an attachable moistener and sealer, which can be an added bonus when there’s a high volume of mail to be sent out.
  • The largest postage meters have a massive number of functions and advantages that the smaller ones do not possess. Similar to the other machines, they have built-in scales that are usually capable of weighing up to 15 pounds, with the ability to add external scales up to 150 pounds, and the option of having customizable graphics—with some machines being able to advertise on the back or front of the envelopes. However, the similarities end there. Large postage meters are often fully automatic, using folders to fold letters if that function is needed, then using an inserter to insert the mail into the envelope, followed by adding a postage mark and moistening and sealing the envelope so it’s ready to be sent. These machines can run at a speed of anywhere from 100 to 350 LPM—making them the fastest machines to use—and ideal for busy mailrooms.

Purchasing Tips

There are many choices available when it comes to postage meters, so finding the ideal model to suit a business can be challenging. Here are some tips that can help you decide which machine is appropriate for your business.

  • The volume of mail being dealt with should be the primary deciding factor when determining what size and type of machine to acquire. Assess how large the daily and weekly volume of mail is when choosing between a small-, medium-, or large-sized system. If the volume of mail is very high but office space is an issue, there may not be room for a large system; a high-end medium system could be used in this case. It’s essential to remember that a small system may need envelopes to be manually fed into the postage meter, so this is generally only suitable for businesses with a low weekly volume of mail. If most of the mail consists of heavy items that are oddly sized or shaped, it may be worth investing in external digital scales, as these are more accurate for weighing an item, hence avoiding overpayments that may be incurred on postage costs.
  • If most of the mail is of a similar size and weight, such as information leaflets or letters, it’s not necessary to use the largest model of postage meter, even if the volume of mail being sent is very high. Money can be easily saved by looking at high-end medium systems that can handle anywhere up to 200 LPM, sometimes even more in certain situations, as these systems will be more cost-efficient in the long run, and the system can always be upgraded if the speed is too slow. However, most of these systems are ideal for large companies sending out bulk informational mail that is sent in envelopes of the same or similar size.
  • Choose a postage meter that includes online access if this is within your budget. This will allow for automatic updates to the postage meter system when the price of sending mail fluctuates, allowing the machine to stay current with the costs of sending mail, and avoiding any fees that could be incurred for underpayment. if a system doesn’t have online access, some providers of meters will charge a reset rate when the cost of sending mail changes, as they may have to manually visit the office to update the meter.

Glossary of Terms

  • Folder: A piece of machinery that folds letters or documents to a specific preset shape so the item fits inside an envelope.
  • Franking: The act of applying postage to a piece of mail.
  • Inserter: This machinery inserts an unfolded or prefolded letter or document into an envelope.
  • Letters per Minute (LPM): The number of letters a postage meter can stamp with a postage mark within the time period of one minute. This is the primary way to compare the speed of two different meters.
  • Moistener: This machinery moistens the sealable part of an envelope so it can be sealed by a sealer.
  • Postage Mark: Also called the “indicia,” this is the ink marking that is printed on the top of an envelope, postcard, or meter tape. The postage mark shows the date on which the item was posted, the amount of postage, and the location it was posted from. The postage mark might also contain a bulk-mail permit number and a customizable graphic and/or message.
  • Postage Meter: The machine that prints a postage mark onto an envelope, card, or meter tape, thus proving that postage has been paid by the company sending the item.
  • Sealer: The part of the postage meter that seals an envelope after it has been moistened by the moistener.

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