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.

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