Office Document Strategies Blog

Understanding Costs of Postage Meters - Canada

Posted by Ian Leppert on Sat, Jun 6, 2020 @ 18:06 PM

There are three companies in the Canadian market for postage meters:

  Francotyp Postalia indicia Canada

Canada's postage industry is highly regulated by Canada Post Corporation since a mailing meter is actually able to print 'money' in the form of postage stamps. The industry practices regarding equipment pricing and fees can be very confusing!

This pricing also leads to confusion when comparing alternatives. Each company has their own approach to pricing and costs.

However there are common elements to know - see more details below:

Different names are used for the postage billing components, but the pricing models are similar so it pays to be aware of them so you do not receive surprises down the road.

We've summarized some of the common pieces for you here.

The Components of Mailing Meter Pricing

  • Postage:  This is what you load in your postage meter and happens when you upload dollars ($) into the vendor's site in trust for Canada Post - it saves you going to manually buy stamps or postage and offers a discount when printing your postage.  Prepayment or permission for automatic bank withdrawal is available for this to work. Some vendors will accept credit card purchases or pre-authorization. All postage will have to be loaded from the specific postage meter vendor's site. Reloading dollars for postage to the vendor's site is called Postage Resets which you may be charged a fee for doing each time you add postage. 
  • Meter Rental:  Meters are controlled under license agreement with Canada Post.  They cannot be owned or bought by end users, only rented on an agreement with the postage machine vendors. Meter rentals are quoted monthly but usually payable quarterly or annually. Rates quoted will be for an annual payment and up-charges will apply for more frequent billing or for loading annual updates to the rates as Canada Post changes these.
  • Equipment: Postage machines or the equipment portion, are the parts which actually stamp the envelopes, the scales and sealers etc. These can be acquired in several ways - smaller units are typically only offered on rentals, bundled along with the meter rental. Mid range and larger units can be bought outright, leased or rented.  Terms vary but usually are for 36, 48, 60 or 66 months. Owned equipment can be operated as long as it provides you with suitable service, although you must rent a compatible meter to go along with your device.
  • Extended Maintenance Agreement (EMA):  Vendors offer extended maintenance agreements for their equipment and it is good idea to avoid surprises and extra costs for repairs and support needed. For smaller machines the rental agreement often has a return/replacement agreement where the unit is diagnosed electronically or by phone and if not work shipped back for replacement with another unit. For smaller rental equipment, these costs are usually part of the quoted monthly rate. For bigger units that leased or purchased this will be a separate charge and must then be factored into your overall total cost of ownership.
  • Digital Rate Fees:  With the development of digital postage meters, Canada Post Corporation has required the postal vendors to report on a regular basis all postage being processed through their meters. This statistical data is used to monitor postage usage in Canada. The vendors have created a fee they charge to postal meter customers to recover the costs of this reporting.
  • Postal Rate Changes: Generally done on an annual basis, but occurring on a schedule which is set by Canada Post Corporation - there are charges levied by your postage vendor for reprogramming your meter with updated postal rates. In addition some of the vendors charge separately for different levels of postal rate updates; local, international and parcel rates - we have seen it be as high as $300. You need to be aware of what your rate changes will cost. Vendors usually provide an option to pay a fee when rates change or to have a rate insurance charges booked into your monthly meter rate to protect your costs.

So in summary this is what could make up your total postal meter costs:

Meter rental + Resets + Rate Changes + Equipment Costs + Digital Rate Fees + EMA = Total Cost + Postage you use

Costs can be quoted monthly, quarterly or annually. Payments made monthly or quarterly will include a handling charge for frequency of billing. Postage used on the device will always be charged separately (think like adding fuel to a car) extra costs as well as consumables such as ink, labels, cartridges etc. 

Finally, be cautious you know for sure when your current (or any proposed) agreement will actually expire. Commonly some vendors try to update your agreement early before the current agreement expires, to lockout the competition....even as much as two years ahead!

When you sign the new agreement you extend your rental and equipment agreement by the new term period, often without realizing this has happened.This could lead to double payments as the costs for the balance of the previous agreement payments will be bundled up and included into the new plan. If in doubt, always ask for a summary of your current obligations, a copy of your original agreement and know your vendor is on the level. 

How are you dealing with your meter contract?  Any horror stories to tell?  Any great experiences?  

 

Topics: Postage meter, postage rates, meter rentals