Table of Contents

8
Postage Payment Methods  

All mailpieces delivered by the Postal Service must bear an indication of postage payment. In addition to providing payment for delivery, the Postal Service uses this indication to verify that postage was paid, and at what rate. Without this proof of payment, the Postal Service will return the mailpiece to the sender.

Mailers presenting presorted or other discounted mailings may choose from one of three basic options for postage payment: precanceled stamps, meter stamps, and permit imprints. The first two options require the mailer to physically affix postage to the mailpiece. Permit imprints, however, are typically printed as part of the envelope manufacturing process. You may not normally combine any of these methods within a single mailing unless specifically authorized in writing by the USPS.

This module will cover the basic requirements of each payment option, along with the associated fees and basic rate markings.

  WHAT YOU WILL LEARN ABOUT POSTAGE PAYMENT METHODS

Upon completion of this module, you should be able to do the following:

• Define the three basic postage payment options: Precanceled Stamps, Meter Stamps, and Permit Imprint.
• Discuss the fees and applications necessary for each.
• Be able to define the features of each option.
• Identify the proper content of and format for permit imprints.
• Explain how to enter discounted mailings into the mailstream.
  
  

PRECANCELED STAMPS

The Postal Service cancels postage stamps to prevent reuse after it renders service. A precanceled stamp is a postage stamp like any other, with a definable cost and value. Mailers may purchase and affix these stamps prior to mailing. Unlike regular postage stamps however, the USPS does not manually cancel a precanceled stamp with the date of deposit. Either the mailer provides the cancellation, or it appears as the rate marking on the face of the stamp.

The most common precanceled stamps are those that the USPS preprints with a rate marking. With the proper authorization, you may purchase these at a Postal Service retail counter and affix them to your presorted mailings. In addition, a mailer may obtain authorization for their own cancellation markings. For further information on this topic see DMM 604.3.4.

DMM 604.3.4

This course will cover the use of precanceled stamps from the Postal Service with the rate category as the cancellation. This method is commonly used by many presort mailers.

Authorization And Fees

Mailers complete Form 3615, Mailing Permit Application and Customer Profile, to obtain authorization to use stamps precanceled by the Postal Service. Present this form to the Post Office where you will deposit your precanceled mailings. There is no fee for this authorization.

Your authorization is limited to this Post Office. To mail with precanceled stamps at another Post Office, you must also file an application there.

You may use precanceled stamps as a postage payment method for presorted First-Class Mail and Standard Mail mailings. Pay only the required annual fees for the classes you intend to mail. You do not need to pay an annual fee if you are using a vendor to prepare and submit your precanceled stamp mailings and the vendor has already paid the proper fee.

Placement

You must affix precanceled stamps to the upper right corner of the envelope, address label, or address area.

   Not only are precanceled stamps the least expensive postage payment option, they also provide the most "personalized" appearance.

Return Address

Mailpieces with precanceled stamps must have a complete, domestic, return address. Once the piece enters the mailstream, the return address is the only way to determine the sender. If the return address is outside the delivery area of the Post Office where the mailer holds his precanceled authorization, the mailer must either:

• Put a cancellation endorsement to the left of the postage showing: city, state abbreviation, and ZIP Code of the office of mailing.

OR

• Provide a cancellation using the verbiage: "Mailed From ZIP Code," followed by the 5-Digit ZIP Code of the mailing office.

OR

• Submit, with their mailing, a copy of the postage statement and a sample mailpiece in a stamped envelope addressed to the postmaster of the office in the return address.

These measures allow the Postal Service to locate the sender if there are any future questions about the mailing.

Rate Markings

See the illustration on the previous page for an example of the basic rate marking as the cancellation method. Whether the mailer or the USPS precancels the stamps, each mailpiece with precanceled postage must bear markings and endorsements required for the rate claimed or services rendered.

Deposit and Acceptance

Mail with precanceled stamps as postage payment must be deposited at the Post Office where the permit is held. The mailing must be presented to a postal representative for acceptance. Mail bearing precanceled postage, and all presorted, discounted mailings in general, must not be dropped in collection boxes.

Precanceled stamps are usually nondenominated. That is, they do not bear on their face a numeric postage amount. Mailers using them must pay the difference between the postage amount represented by the stamp and the rate charged for each piece when the mailing is presented for acceptance.

Restrictions

Mailers may not use precanceled postage stamps on boxes, cases, bags, or other potentially reusable mailing containers. This restriction helps to protect postal revenues by preventing reuse of postage.

POSTAGE METERS AND PC POSTAGE PRODUCTS
("Postage Evidencing Systems") (DMM 604.4)

Postage meters and PC Postage products are collectively identified as "postage evidencing systems." A postage evidencing system is a device or system of components a customer uses to print evidence that postage required for mailing has been paid. Postage evidencing systems print indicia, such as meter imprints or information-based indicia (IBI), to indicate postage payment.  Mailers print indicia directly on a mailpiece or on a label that is affixed to a mailpiece.

Authorization

Customers enter into an agreement with the USPS (e.g., via electronic click-through or contract signature) in conjunction with executing a separate agreement with the provider for rental, lease, or use of a postage evidencing system.  Actual implementation of the agreement with the USPS varies by product category and provider and is typically facilitated by the provider on behalf of the USPS.  Postage evidencing systems are rented or leased; they may not be purchased, sold, or resold. Mailers may use postage evidencing systems to affix or imprint indicia on any class of mail except Periodicals.

Placement of Postage

Mailers must print or apply indicia in the upper-right corner of the envelope or address label.

• Position indicia at least 1/4 inch from the right edge of the mailpiece and 1/4 inch from the top edge of the mailpiece.
• Orient indicia with the longest dimension parallel to the address.
• When a FIM is printed with the indicia, position the FIM according to standards.
• Do not allow the indicia to infringe on the areas reserved for the FIM, POSTNET barcode, or optical character reader (OCR) clear zone.

Content of Metered Postage

Indicia are comprised of human-readable information. Information-based indicia (IBI) also contain machine-readable information that identifies the postage evidencing system, postage payment information, and mail service requested. There are particular data sets associated with different types of indicia, depending on the product and the type of mailing. Indicia may include postal markings related to the class of mail and presort level and an ancillary service endorsement.

Examples:

Mailing Date Format

Mailers must use a complete date for the following:

• All First-Class Mail, Priority Mail and Express Mail pieces.
• All mailpieces with Insured Mail, COD or Special Handling service.
• All mailpieces prepared with the indicia printed on nonadhesive paper (e.g., computer printer paper) and affixed to the mailpiece or used as a part of an insert in a window.

Mailings presented with a complete date must be deposited or presented on the date in the indicia.  Presort mailings presented after midnight may bear the previous day’s date.  Otherwise, the mailer must print a date correction or apply an additional indicia with the correct date directly on the mailpiece as defined in DMM 604.4.4.
Mailers may use a complete date or a mailing date consisting solely of the month and year in the indicia only for Standard Mail and Package Service pieces.  Mailpieces bearing only the month and year must be deposited or presented for mailing on any day during the month shown in the indicia and through the third day of the following month.

PC Postage®

PC Postage® products and services allow customers to purchase and print postage using a personal computer, Internet and printer. Commercial PC Postage products available from authorized vendors allow customers to set up and manage postage accounts via a secure host site, purchasing postage via credit card or ACH account.  PC Postage products print IBI indicating postage payment and may print directly onto mail pieces, shipping labels or customized labels for all mail classes (except Periodicals).  PC Postage technology is also integrated into web sites such as eBay and Click-N-Ship™ at www.usps.com which allows customers to purchase and print postage for particular services using a credit card.

Information Based Indicia (IBI)

Information Based Indicia (IBI) is the postage mark or “stamp” printed by PC Postage products and some postage meters.  IBI include a two-dimensional barcode that is machine readable, along with human-readable information.  They are called information based because of the information carrying nature of the barcode that contains mail-processing and security related data.

• Human readable information contains readable information, as traditional postage meter indicia – postage amount, mail class, date of mailing, device identification number and town or licensing post office.
• Two dimensional barcode – encode security and mail processing information about the mailpiece.  It also includes a ‘digital signature’ that is unique to each mail piece, which helps the USPS to detect fraud.

Information-Based Indicia with FIM
(without fluorescent ink)

Information-Based Indicia without FIM
(with fluorescent ink)

Markings (DMM 604.4 and 202.3)

There are particular data sets associated with different types of indicia, depending on the product and type of mailing.  Indicia may include postal markings related to the class of mail and presort level and ancillary service endorsement.  The basic required marking that indicates the class or subclass—"First-Class," "Presorted Standard" or "PRSRT STD," or "Nonprofit Organization" (or "Nonprofit Org." or "Nonprofit")—must be printed or produced as part of, or directly below or to the left of, the permit imprint indicia, meter stamp or impression, or adhesive or precanceled stamp.

Legibility of Postage (DMM 604.4)

Deposit and Acceptance

Mailers must deposit or enter mailpieces with metered or PC Postage indicia according to the following conditions:

a. Mailers may deposit Express Mail, Priority Mail, single-piece rate First-Class Mail, single-piece rate Media Mail, and single-piece rate Library Mail items with metered or PC Postage indicia at any postal facility, preferably within the area of the customer's local post office.

b. Mailers must deposit all mail as follows:

• At a postal facility within the ZIP Code shown in the indicia.
• For Presort rate mail, at the authorized mailing office if not at a facility within the ZIP Code shown in the indicia.

c. Mailers also may dropship metered mail according to standards in DMM 705.17.0.

PERMIT IMPRINT

The use of a permit imprint allows you to mail without affixing postage to each piece. The mailer obtains a permit, or authorization, to mail with a preprinted imprint (also called an indicia) indicating the postage payment on their pieces.

The Postal Service establishes an advance deposit permit imprint account in the mailer's name. This account is similar to a checking account. The mailer deposits the amount necessary to pay the postage prior to mailing. The postage statement that accompanies the mailing prompts a deduction from the account, similar to writing a check.

Authorization And Fees

Mailers must submit Form 3615, Mailing Permit Application and Customer Profile, to the Post Office where they intend to mail, accompanied by a nonrefundable application fee. The Postal Service assigns the mailer a permit number and establishes an advance deposit account for the mailer using this number.

Mailers who wish to present discounted mailings must also pay the applicable annual mailing fee.

Placement

The actual permit imprint indicia, often called the permit imprint, replaces the postage stamp. You may print your permit imprint directly on mailpieces or on labels permanently affixed to mailpieces. Mailers may also print it on mailpiece wrappers, envelopes, and containers.

Mailers must place the permit imprint parallel to the address of the mailpiece, in the upper right corner of the address side, address area, or the address label. You may vary the position only to allow data processing equipment to simultaneously print the address, the imprint, and other required postal information.

Clear Space

You must print the indicia wholly within a clear space no smaller than 1/2 inch by 1/2 inch. The entire area occupied by the indicia must be no larger than 1 1/2 inch below or to the left of the upper right corner of the mailpiece or the address area. Except as required to enclose the permit information, no printing may appear either above or to the right of the permit information. The rule that forms a box around the indicia may be omitted.

The requirements are less strict when printing the indicia on an address label; simply ensure that the indicia is rectangular, is sufficiently large and separated from the other information on the label to be legible and is located parallel to the address in the upper right corner of the address area on the label.

PERMIT IMPRINT PLACEMENT AND CLEAR AREA

CONTENT AND FORMAT

You must produce permit imprints using a printing press, rubber stamp, mimeograph, or some other method of copying or reproduction. A permit imprint cannot be individually hand-drawn or typewritten onto each piece.

Content

The content of the permit imprint indicia consists of a printed statement that indicates the mailer has paid the appropriate postage for the mailpiece. The text of the indicia also indicates the Post Office where the mailer holds the permit, along with the permit number.

There are several variations to the indicia formats shown on the next few pages. Additional samples are in DMM 604.6.0. The text of the permit imprint always includes these common elements:

• The class of mail.
• The statement: U.S. Postage Paid.
• City and state of the Post Office where the permit is held (and where the mail must be entered).
• The correct permit number.

First-Class Mail

In addition to the common elements, permit imprints for First-Class Mail and Priority Mail must also include either First-Class Mail or Priority Mail, as applicable.

FIRST-CLASS MAIL INDICIA

FIRST-CLASS MAIL INDICIA

An indicia for First-Class Mail may also include the following optional elements:

• The ZIP Code of the permit holder.
• The mailing date.
• The amount of postage paid, or the number of ounces.
• Additional required rate markings.

You may substitute the wording "Mailed from ZIP Code," followed by the 5-digit ZIP Code of the mailing office for the city and state information.

For First-Class Mail discounted mailings, the indicia includes the basic "Presorted" rate marking.

FIRST-CLASS MAIL PRESORTED INDICIA

FIRST-CLASS MAIL PRESORTED INDICIA WITH 
OPTIONAL 5-DIGIT ZIP CODE

FIRST-CLASS MAIL PRESORTED INDICIA WITH 
OPTIONAL 5-DIGIT ZIP CODE AND PIECE WEIGHT

Since the decision of what to include in the indicia is made in the design phase, you should determine the class of mail and discount category prior to this step.

Standard Mail 

As with First-Class Mail, indicias for Standard Mail must include the required common elements. The rate marking must be either in the permit imprint or adjacent to it.

• A Standard Mail indicia may also include the following elements:
• The ZIP Code of the permit holder.
• The amount of postage paid, or the number of ounces.
• Additional required rate markings.
• You may substitute the wording "Mailed from ZIP Code," followed by the 5-digit ZIP Code of the mailing office for the city and state information.

A permit imprint indicia for Standard Mail must not include a mailing date.

STANDARD MAIL INDICIA

You may abbreviate "Presorted Standard" as PRSRT STD:

NONPROFIT RATE STANDARD MAIL INDICIA

Package Services

The basic required marking indicating the appropriate subclass (e.g., "Bound Printed Matter") may appear on the mailpiece as part of the indicia. Alternatively, mailers may print these markings directly below or to the left of the postage payment indication.

PACKAGE SERVICES  INDICIAS

Other Required Markings

You may include other required postal markings as part of the permit imprint indicia. Alternatively, you may print these additional markings directly below or to the left of the indicia.

INDICIAS WITH OTHER REQUIRED MARKINGS

  Correct class and rate markings are an important acceptance issue.  If you are unsure, check with your local postal personnel prior to printing!

RATE MARKING PRINTED 
TO THE LEFT OF THE INDICIA

Format

In addition to the appropriate contents, you must also adhere to these requirements when designing and printing permit imprint indicias:

• No extraneous printing may appear in the indicia.
• The text contained in the indicia must be at least 4 point type.
• When printing the indicia directly on the mailpiece or in the address area, no printing may appear above or to the right of the permit information except as required to enclose the indicia.
• When printing the indicia on an address label, no printing may appear above or to the right of the permit information except as required to enclose the indicia.
• The indicia on an address label must be legible.

COMPANY PERMIT IMPRINTS

Mailers may choose to replace the city, state, and permit number in an indicia with the exact name of the company holding the permit. This is called a company permit imprint.

When using a company permit imprint, the mailpiece must bear a complete domestic return address. The return address must be either:

• The physical location where the mailer keeps his records and files pertaining to this mailing.

OR

• A point of contact from which the physical location of the records and files can be readily determined.

For each mailing made using a company permit imprint, the mailer must retain the following records:

• Complete sample mailpiece for each version.
• Postage statement indicating:
  • The weight of a single piece.
  • Total number of pieces mailed.
  • Total postage.
  • Dates of mailing.
  • Postage payment method.
  • Post Office of mailing.

If the return address used on the mailpiece is not the actual physical location at which the USPS can review the mailer's records, or it is not a point of contact from which such a location can be readily determined, then the mailer must:

1.  Include in the indicia the 5-digit ZIP Code of the physical location where the records are kept or can be made available.

2.  Provide the postmaster of that office with a complete sample of the mailpiece, the dates and Post Offices of mailing, and the name and local address of the party who has the required mailing records.

   A company permit imprint allows the mailer to enhance corporate recognition. It also allows mailers with a regional or national presence to mail from multiple field offices (with different permit numbers at different Post Offices) using the same envelope stock.

COMPANY PERMIT IMPRINT

DECORATIVE DESIGNS

Mailer’s may use an optional indicia format. It allows for the use of decorative designs according to DMM 604.5.0. These designs must appear below or to the left of the permit information in an area extending no farther than 4-½ inches to the left of the right edge, and 1-½ inches below the top edge of the mailpiece, address area, or address label, as applicable. The decorative design cannot resemble or imitate a postage meter imprint, postage stamp or other postage payment method. Mailpiece Design Analysts can review you design to ensure they meet the requirements in the DMM.

REFERENCES TO EXPEDITED HANDLING

Except for postcard-size mail and permit imprint indicia placed on address labels, indicia on Standard Mail pieces bearing reference to expedited handling or delivery (e.g., "Priority," "Express," "Overnight"), must:

• Show the words "Presorted Standard" or "Nonprofit Organization" more prominently than other words in the indicia.
• Include a clear space of at least 3/8 inch around the entire indicia.

Return Address

A return address is required for permit imprint mailings using a company permit imprint or mailpieces using an ancillary service endorsement.

Deposit And Acceptance

Permit imprint mailings must consist of at least 200 pieces or 50 pounds of mail. Certain classes of mail and discounted rates may require higher minimums. Consult the Quick Service Guides or your local Post Office for more information.

All pieces in a permit imprint mailing must be identical in weight. Mailers preparing discounted mailings must pay the appropriate annual fee. You must prepare these mailings according to the standards for the class of mail and the rate claimed.

Mailers must deposit permit imprint mailings at the Post Office where they hold their permit, at a time and place designated by the postmaster. All permit imprint mailings must be tendered to postal acceptance personnel accompanied by the appropriate postage statement. You must never deposit permit imprint mailings in collection boxes, under any circumstances.

  The Postal Service verifies the total pieces in a permit imprint mailing by dividing the total net weight by the piece weight, hence the requirement that all pieces be identical in weight.

MANIFEST MAILING SYSTEM

There are many mailers who would like to enjoy the benefits of using permit imprints, but have mailpieces that are nonidentical in weight. For these mailers the Postal Service created the Manifest Mailing System (MMS).

Manifesting allows the mailer to submit nonidentical weight pieces for acceptance, using permit imprints as the postage payment method. Postal verification is possible using unique identification numbers, combined with a printout listing weight and postage for each piece in the mailing. For more information, contact your postal representative and ask for Publication 401, Guide to the Manifest Mailing System.

OPTIONAL PROCEDURE

An Optional Procedure Mailing System is a method of verifying and accepting First-Class Mail, Standard Mail and Package Services paid by permit imprint. Mailings may consist of identical or non-identical weight pieces. This system reviews a mailer’s financial, production and other business records in lieu of standard weight verification procedures. USPS postage verification is normally completed by an audit of business records kept by the mailer to determine underpayment of postage.

RESTRICTIONS

Do not intentionally design permit imprints to resemble postage stamps, meter impressions, or any other type of postage payment method. In addition, restrict the printing of permit imprints only to items that you intend to mail. Permit imprints must not appear on items that have not had postage paid with the USPS.

Payment must be on deposit for each mailing prior to its acceptance. Deposit these funds into your permit imprint account as
directed by the USPS. The Postal Service does not allow credit for postage.

To maintain your authorization, you must use your permit imprint account for mailing at least once every 2 years. If you do not, the Postal Service must cancel your account. The Postal Service may also revoke a permit imprint for use in an unlawful scheme, or for failure to comply with relevant standards.

The complete regulations pertaining to the use of permit imprints as postage payment are contained in DMM 604.6.0.

DMM 604.7.0

POSTAGE PAYMENT SUMMARY

The following chart summarizes the postage payment options available to each class of mail.

Postage Payment Options by Class of Mail

	Class of Mail
Postage Payment Methods	Express Mail	Priority Mail	First-Class Mail	Standard Mail	Periodicals
Meter Stamps	Yes	Yes	Yes	Yes	No
Precanceled Stamps	Yes	Yes	Yes	Yes	No
Permit Imprint	No	Yes	Yes	Yes	No
Express Mail Corporate Account	Yes	No	No	No	No
ID Statement	No	No	No	No	Yes

* Precanceled Stamps may not be used on boxes, cases, bags, or other reusable containers. Single-piece mail with precanceled stamps must be endorsed with a correct rate marking and presented to a postal window employee.

ELECTRONIC OPTIONS

The Postal Service is constantly developing new products to meet its customers' needs. Postage payment methods are no exception.

The Postal Service has various types of electronic postage. These include:

USPS NetPost™ Services

• NetPost™ Mailing Online
• NetPost™ CardStore
• NetPost™ Certified Mail
• NetPost™ Premium Postcard

Visit the USPS's web site at www.usps.com/NetPost.

 Top of Document

Exercise 8 - 1

Directions: Circle the best response or fill in the blank to answer the following questions. Check your answers when you have completed the exercise.

1.  To use a postage meter, you must first purchase one from the USPS.

a.  true
b.  false

2.  Meter stamps printed on adhesive meter strips must include, at a minimum:

a.  the day, month, and year
b.  the year
c.  the day and month
d.  the month and year

3.  A permit imprint must be placed in the upper ____________ corner of the address side or area, ____________ to the delivery address.

4.  Which of the following devices is unacceptable for reproducing a permit imprint indicia on a mailpiece?

a.  a rubber stamp
b.  a typewriter
c.  a mimeograph
d.  a printing press

5.  Except when printed on an address label, the text contained in a permit imprint indicia must be printed in at least _____ point type.

a.  12
b.  8
c.  4

6.  Which of the following postage payment methods always requires a return address on the mailpiece?

a.  permit imprint
b.  precanceled stamps
c.  meter stamps

7.  Except when using an approved Manifest Mailing System (MMS), all pieces in a permit imprint mailing must be:

a.  identical in weight
b.  either flat- or letter-sized
c.  a circular or flyer

Answers to Exercise 8 - 1

1.  b, false; postage meters are not purchased from the USPS, they are leased from an
authorized vendor. The USPS sets or fills the meter with postage.

2.  a, the day, month and year; this prevents the removal and later reuse of the meter strip.

3.  right, parallel; this is the general standard for placement of a permit imprint.

4.  b, a typewriter; permit imprints may not be typewritten or handwritten. A handwritten or typewritten design, however, can be reproduced by an authorized method.

5.  c, 4; this standard ensures a minimum level of legibility of the permit imprint information, such as class of mail.

6.  b, precanceled stamps; this is the only postage payment option that does not normally provide an alternative method of determining the sender.

7.  a, identical in weight; this is due to the fact that, without an on-piece postage payment (such as a stamp), the USPS must verify a total piece count by weight prior to acceptance.

Top of document

Table of Contents