The best business advice, opinion, news and expertise in Greater Manchester and further afield.

Friday, 5 October 2012

Friday Guest Blog: How to Beat Stamp Price Hikes

By David Hymers - Managing Director, Totalpost Services Plc

The cost of second class postage jumped by a massive 39% this year. Despite this, many businesses still rely on stamps rather than utilising franking machines.

I’ve worked in the postal industry for 40 years and from experience I know that businesses can make massive savings through utilising franking machines, however the savings possible have become more pronounced over recent years as the price of stamps has increased rapidly.

For example, companies that send as few as 8 second class standard letters per day will make a saving of £1.52 per day or an annual saving of £395.20p when using a entry level franking machine compared to using stamps. This saving can increase if the item is a large letter or packet. And this will offset the cost of the franking machine within a year.

Companies that send more mail than this will see increased savings very quickly. Royal Mail increased the minimum saving on franked mail from .07p in 2011 to .16p in 2012 to encourage customers to take advantage of the benefits with franked business mail.

Franking machine users receive a discount on every item of mail sent, saving 19p on every second class letter and 16p on every first class letter. This means a first class franked letter is now cheaper to send than a second class stamped letter.

We often help businesses that feel locked in to a franking machine contract. Each situation is different, but businesses don’t need to feel trapped as there are many options to enable customers to get onto a better lease.

For example, we dealt with one business that had been paying 500% more than they should have been for a low-level franking machine. Instead of paying £80 per quarter they were paying £80 per month and had been doing so for three years. We advised them on their options for getting out of the lease contract which include offsetting the settling cost or negotiating a rebate.

When embarking upon a franking machine contract businesses should be asking for a breakdown of costs on the lease, service costs, re-crediting charges and the ink.

One scam that we often see is where companies don’t tell businesses about the maintenance (which is required by Royal Mail regulations). Businesses then receive an inflated bill for maintenance that they were not expecting.

We also help companies that have an existing contract but require maintenance of their mailroom machinery. We have been handling mailroom maintenance contracts for a wide range of businesses of all sizes for many years.

Consumable costs can also be expensive, but there are good quality alternatives available. For example we manufacture our own alternative cartridges which have been approved by Royal Mail. Customers can save between 25% and 50% by using alternative cartridges in their franking machines.

It is useful to note that the use of alternative compatible franking machine cartridges is totally acceptable. In 2005 the Office of Fair Trading ruled that the use of alternative Royal Mail approved cartridges would not affect the machinery warranty in any way.

In summary, businesses that send out paper mail can make massive savings by using franking machines, particularly when also using approved alternative consumables and we are keen to help businesses realise these savings.

For more information visit or call 0845 4900 360.

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