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E-Stamp Proposes Discount

E-Stamp Corp. made a plea at the Postal Rate Commission hearings this week for the first-ever discount on online postage.

The hearings addressed Docket No. R2000-1, which involves requested changes in the mail classification system. e-stamp.com, a provider of Internet postage, is proposing customers receive a 4-cent discount if they purchase stamps online. The company promises to pass that discount on to its customers if it is approved.

According to Michael Jones, E-Stamp's director of US Postal Service programs, it is unfair to charge Internet postage customers because, in essence, they do all the work.

"Online postage customers use 'automation-friendly' mechanisms, such as computerized bar codes, to streamline the processing of mail and reduce overhead costs associated with confirming addresses, ZIP codes and proper postage amount," he said. "The overall cost reduction created by these attributes alone amounts to an estimated 5 to 6 cents per piece of mail.

"Large bulk mailers who use a similar bar code for postage have received a discount for streamlining the mailing process, but customers using Internet postage are not currently afforded the same cost reduction," Jones added.

During the hearings, an official from market research firm International Data Corp. said a discount would increase the sales of Internet postage and provide even more incentive to small firms, who are at the heart of this new market opportunity.

"The typical online postage customers are small business/home office managers who need the advantages and convenience afforded by Internet postage," said Raymond Boggs, vice president of small business/home office research at IDC. "However, they still have to work to make this innovation a reality."

The Postal Rate Commission, an independent agency created which sets postal rates, will make a recommendation to the United States Postal Service's board of governors within four months. The board of governors would then vote whether to accept or reject this recommendation.