What is a Postage Meter & How do they Work?

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A postage meter is a business asset which companies use to streamline their postage operations and reduce their mailing costs. Postage meters are suited to businesses of all sizes, not just large businesses that send huge volumes of mail.

There are many different models available to suit a variety of companies. The smallest postage meters are designed to send less than one hundred letters a month, whereas some of the largest capacity machines can process between ten to twenty thousand letters per hour.

How Does a Postage Meter Work?

When you get a postage meter you pre-fill the machine with a set amount of postage to be used. Letters are then passed through the machine which will print indicia on the envelope, this mark may also be referred to as a frank.

The frank is simply a data matrix which contains a large amount of information about the mailed item including; how much postage has been paid, the weight of the item, the zip code of the mailing company and the class of mail. With some meters the frank also contains information that can be used to track an item through the postage systems.

All postage meters these days now must be digital. The earlier non-digital models have been discontinued to improve security.

How Will a Meter Benefit my Business?

The two main benefits of a postage meter are saved time and money. Research suggests that an average business will save 20% on their mailing costs once they start using a meter as the postage calculation will be accurate and overpayment will not be a problem. On top of this, many meters allow you to access discounts on USPS priority and express mail services.

A postage meter will also save your employees time as there will no longer be lengthy trips to the post office or time wasted sticking stamps to envelopes. As the machines are digital, you can top up your postage at anytime, day or night, which means no more running out of stamps.

How Can I Buy A Postage Meter?

USPS tightly control the postage meter industry as postage is viewed the same as currency. For this reason, USPS will only allow businesses to rent postage meters and in fact their purchase is expressly forbidden by federal law.

Learn more: Why you can’t buy a postage meter

What Is IBI?

IBI (Information Based Indicia) is a secure postage evidencing standard used by the United States Postal Service to indicate electronic postage payment.

An IBI postage meter is one which prints in this specific format, rather than an online meter or a manual mechanical meter. Digital postage meters print postage through an inkjet cartridge which uses specific ink. IBI is used by the most advanced systems, as it uses a 2-dimensional data matrix, or barcode, combined with additional characters and symbols which can be identified visually.

Information such as the amount of postage, mail class, the origin zip code, destination, weight and tracking numbers are all contained within the barcode, as well as a cryptographic signature. The additional information readable by humans shows the minimum information required by the USPS Domestic Mail Manual.

How Much Do Postage Meters Cost?

The rental price of a postage meter is largely determined by its processing capacity and the length of rental contract you enter into.

Many of the low volume machines start from around $25 to $45 a month, and for the high volume meters they can reach over $1,000 a month.

Of course, if your business opts to include any additional features including letter folders and inserters this will further increase the price.

Postage meters show in your accounts as lease expenditure, so they will be a tax deductible expense (as opposed to investment in an asset which would be liable for federal taxes).

Read more: Postage meter price comparison

Can Postage Meters do Anything Else?

As well as printing franking marks, a postage meter can also be used to print corporate marketing messages on your envelopes. These can be altered with ease, meaning you can alert customers to upcoming promotions or pass on important information. For repeat messages, the meters have job presets allowing you to record up to eight jobs.

The machines can also be used as part of an effective accounting department as they have departmental codes which allow for mailing costs to be apportioned correctly to the relevant department.

Written by:
Dan’s a Senior Writer at Expert Market, specialising in digital marketing, web design, and photocopiers, amongst other topics.
Reviewed by:
Heleana Neil, Business Services editor
Heleana Neil specialises in Business Services, managing the strategy and production of content for SMBs, helping businesses with the challenges and opportunities they face today. Covering everything from payroll to payment processing, Heleana uses her expertise to help business owners make better, informed decisions and grow their companies.