Postal Service.
Notice of final plan.
This notice of the final plan for the retirement of manually set postage meters clarifies the second phase of the plan to take postage metering to a higher level of security. The Postal Service recently completed the first phase of an overall Postal Service plan with the decertification of mechanical postage meters. Upon completion of the four phases of this plan, all meters in service will offer enhanced levels of security, thereby greatly reducing the Postal Service's exposure to meter fraud, misuse, and loss of revenue.
May 1, 2000.
Nicholas S. Stankosky, 703–292–3703.
In 1995 the Postal Service, in cooperation with all authorized postage meter manufacturers, began a phase-out, or decertification, of all mechanical postage meters because of identified cases of indiscernible tampering and misuse. Postal revenues were proven to be at serious risk. The completion of this effort, which resulted in the withdrawal of 776,000 mechanical meters from service, completed Phase I of the proposed plan for secure postage meter technology. Recent advances in postage meter technology offer high
The proposed plan for Phase II, the retirement of manually reset electronic meters, was published for comment in the
The Postal Service gave thorough consideration to those comments, modified the proposed plan as appropriate, and now announces the adoption of the final plan. This plan gives users of manually reset postage meters ample time to make timely and intelligent decisions on replacement meters.
The Postal Service's evaluation of the comments follows. The final plan, as revised, follows the discussion of comments. The comments are organized to reflect common topics addressed by the commenters.
1.
2.
The Postal Service revised the list to include only those models available to the public.
3.
The Postal Service determined that those models should remain on the list. Any meter capable of remote setting that is currently being reset manually must be reinstalled by the postage meter manufacturer as a remote set meter with a new model number before the user can continue to use it. The Postal Service added a requirement to this effect.
4.
Although the Postal Service did not require that users of mechanical meters replace those meters with remote set electronic meters, pamphlets that were widely distributed to users by the Postal Service during the decertification process suggested that users rent “remote set meters as this will be our direction in the future.”
5.
Phases III and IV of the proposed plan for secure postage meter technology were published for comment in the
6.
The Postal Service is working to ensure the integrity of the meter retirement process with expeditious, accurate, and informative communications with postage meter users, postal employees, and postage meter manufacturers, and it expects manufacturers to provide accurate, timely information to their customers. If the Postal Service finds that meter manufacturers or their agents are disseminating misleading information, it reserves the right to review all generalized manufacturer communications to all customers or a subclass of its customers prior to distribution to customers.
7.
Manufacturers will no longer be asked to submit this information. However, in order to accomplish the goal of ensuring that manually reset meters are withdrawn in accordance with the plan, the Postal Service will review meter manufacturer lease records and records of meter withdrawals shortly after each quarterly retirement date.
8.
Postal Service records show that all major meter fraud cases have involved physical tampering. USPS ability to detect meter fraud involving conventional postage meters is limited; the best protection for postal revenue comes from requiring the change to more secure meters. The increased security of remote reset meters is based, first of all, on the analysis by the resetting computer of the meter control total when the meter user contacts the resetting center to obtain additional postage. The computer used for resetting can identify any imbalance that would warrant investigation. This amounts to an “inspection” of the control totals each time the meter is reset. Second, remote meter resetting eliminates the use of the meter keys that must be used when meters are reset manually. These keys allow access to any meter of the same model and sometimes other meters of the same manufacturer. Loss and theft of these keys, which would allow improper access to meters, is a major security issue that is eliminated with remote set meters. In addition, any manually set meter allows the possibility of human error by the resetting clerk.
New, remotely reset meters are also more reliable and have more features than manually reset meters; meter manufacturers can provide the specifics. The remote set meters are clearly more flexible because, unlike manual set meters, they do not have to be removed from the plant or office and taken to a remote location for resetting. They can be reset and returned to service in minutes.
There are 131,426 manually reset meters in use, which represents 8.2 percent of the total number of postage meters. Postal revenue from manually reset meters for our 2000 fiscal year is $6,121,084,200, which is 29.8 percent of total meter revenue. Given the significant contribution of the relatively small number of manually reset meters to postal revenue, it is essential that these meters be secure.
9.
Retiring manually reset postage meters is a USPS plan to increase meter security and is not driven by the manufacturers. Checks for postage must be made payable to the U.S. Postal Service (or to the manufacturer) and are sent by the meter user to the designated Postal Service lockbox account at Citibank. The manufacturer does not benefit from any “float” on the money, unless the manufacturer has established its own bank to handle the funds before they are deposited with the Postal Service and its customers elect to deposit funds in that bank. Moreover, through its Postage Now
Any additional fees and costs for users are determined on a manufacturer-by-manufacturer basis and not by the Postal Service. Customers have choices in a competitive meter marketplace if they are not satisfied with the fees and policies of a given manufacturer. Users of remote set meters benefit from the additional features not available on manually set meters and from the increased convenience of using meters that do not require a trip to the post office during the business day for resetting. Individual meter manufacturers can provide detailed information about their products and services.
10.
11.
The Postal Service is encouraging meter manufacturers to work with the industry and the Postal Service to ensure that the fees and procedures for resetting remote set meters meet the needs of all customers, including large commercial mailers and third party mailers. In the competitive postage meter marketplace, every customer has the option to change meter manufacturers and/or to negotiate the fees paid. Although the commenters assumed that manually reset meters are reset for free, that assessment does not account for the user time, labor, and travel costs incurred when a meter is taken to the post office. Remote set meters can thus be more cost effective and convenient than manually reset meters, and offer the possible availability of postage 24 hours a day, seven days a week, depending on the manufacturer plan selected.
12.
Any changes to mailing equipment required because of incompatibilities with remote set postage meters, as well as the need for an additional telephone line, is manufacturer dependent and not under the control of the Postal Service. However, according to manufacturer feedback, mailing equipment changes should be minimal.
13.
Through the Postal Service's Postage Now
14.
The Postal Service does not have a cut-off time for daily deposits. Any cut-off time is established on a manufacturer-by-manufacturer basis, rather than by the Postal Service. Meter manufacturers are aware of the potential timing problems with meter resetting for some mailers and are working on solutions that will be implemented by June 30, 2001, the first mandated retirement date for manually reset meters.
15.
As noted before, certain electronic payments through Postage Now
16.
Mailing agents, such as presort bureaus, will need a way to guarantee their customer funds. Checks should be made payable to the U.S. Postal Service and sent to the designated Citibank lockbox, as appropriate for each meter company. However, if a check is made out to a third party, it will be processed by the Postal Service if the third party endorses it over to the Postal Service on the back of the check. As the commenters noted, there may be a need for different checks for each meter manufacturer and form of postage.
17.
The customers of the third party mailers are responsible for meter fees. Commercial mailers should handle these costs in accordance with industry practices.
18.
The Postal Service must maintain a level playing field for all mailers and cannot accept the continued risk of less secure meters. The Postal Service will not allow the continued use of manually reset meters beyond the dates given in the plan.
19.
Although the funds for resetting postage meters are sent to the Postal Service's lockbox account at Citibank, a private sector bank, checks are made payable to the U.S. Postal Service. In addition, the Postal Service does not keep funds on deposit at Citibank. Each day, all available Postal Service funds are concentrated in the Postal Service Fund at the U.S. Treasury. Checks made payable to the U.S. Postal Service are sent to a designated Citibank Postal Service lockbox account, but the funds for resetting postage meters are not deposited with a private business; rather, they are deposited with the U.S. Postal Service.
20.
21.
The Postal Service reviewed the suggestion and revised the timetable to simplify the withdrawal schedule and to ensure that all users will be able to make timely and intelligent decisions on replacement meters. Under the revised timetable, any meter covered under a lease that expires after December 31, 2000, may be used until the end of the calendar quarter following the quarter in which the lease expires, at which time the meter must be retired and withdrawn from service. This date is called the retirement date. For example, any meter with a lease expiring during the first quarter of 2001 (January, February, or March 2001) must be retired before the end of the second quarter of 2001 and will have a retirement date of June 30, 2001. This timetable will give all manually set postage meter users at least three months to replace the meter with a remote set meter and will consolidate retirement dates. The first date for mandatory manual meter retirement will be June 30, 2001.
22.
Postage meters undergo extensive testing to ensure against meter failure and memory loss. There are established procedures for postage refunds in the case of meter failure. The Postal Service is working with manufacturers to make the process easier and more immediate. The new technology used in remote set meters enhances the process and gives the customer additional protections. All funds for postage are sent directly from customers to a Postal Service account and are not held by the manufacturer. Each day, the Postal Service concentrates all of its available funds in
1. Effective February 1, 2000, new placements of manually reset electronic postage meters ceased. The decision applied to new customers as well as existing meter users. All meter manufacturers were notified of this policy and have complied.
2. The Postal Service will allow a lease extension for a manually set electronic meter up to December 31, 2001, for any lease that expires during calendar year 2000. No other lease extensions are permitted by the Postal Service. Manufacturers or users cannot avoid meter retirement by the manipulation of leases.
3. Some users currently have a lease for a manually reset electronic meter that expires after December 31, 2000. Any meter covered under such a lease may be used until the end of the calendar quarter following the quarter in which the lease expires, at which time the meter must be retired and withdrawn from service. This date is called the “retirement date.” For example, any meter with a lease expiring during the first quarter of 2001 (January, February, or March 2001) must be retired before the end of the second quarter of 2001 and will have a retirement date of June 30, 2001. This timetable will give all manually set postage meter users at least three months to replace the meter with a remote set meter and will consolidate retirement dates.
4. All retired meters must be withdrawn from active service records immediately upon the retirement date following lease expiration. Manufacturers must process PS Form 3601–C, Postage Meter Activity Report, to withdraw the meter effective the retirement date.
5. Retired meters must be physically returned to the manufacturer within 30 business days after the retirement date. The use of a retired meter in the time period between the retirement date and when the meter is returned to the manufacturer may result in the cancellation of the user registration.
6. Official notification to users explaining this plan will be sent directly by the Manager, Postage Technology Management, Postal Service Headquarters. No other correspondence will be considered to be official.
7. The manager of Postage Technology Management reserves the right to review manufacturer correspondence to these meter users prior to distribution.
8. After each retirement date, the Postal Service may review meter manufacturers' lease records in comparison with meter withdrawals, to ensure that all meters that should have been retired were retired.
9. Any manually reset electronic postage meter that is capable of remote meter setting must be either converted to remote meter setting or withdrawn from service. The function that allows manual resetting must be disabled.
10. Given the rapid pace of new technological developments for secure postage meter technology, meter manufacturers should not offer, and customers should not accept, leases for postage meter equipment of more than five (5) years' duration.
11. The following meter models may be affected by this plan. Any postage meter that is taken to a post office for resetting is affected by this plan and must be retired, even if it is not included on the following list.
1441
1441X
1446
1446X
16410
16413
16413X
16463
16463X
17563
17563X
4280
64280
741
741X
7410
7410X
7413
7413X
7560
7560X
7563
7563X
7000
7100
7200
9212
9212G
9248
9248G
9252
9252G
9257
9257G
9258
9258G
9252U
9257U
9258U
9258UG
9267
9268
9268G
9282M
9287GM
9287M
9288GM
9288M
9512GM
9512M
9547GM
9547M
9548GM
9548M
6501
6502
6513
B901
E101
E102