[Federal Register: April 25, 2001 (Volume 66, Number 80)]
[Rules and Regulations]
[Page 20745-20746]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr25ap01-6]

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POSTAL SERVICE

39 CFR Part 501


Authorization to Manufacture and Distribute Postage Meters

AGENCY: Postal Service.

ACTION: Final rule.

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SUMMARY: This final rule clarifies and strengthens requirements for
manufacturers of postage meters to control meters used for
demonstration and loaner purposes.

DATES: This rule is effective April 25, 2001.

FOR FURTHER INFORMATION CONTACT: James Luff, 703-292-3693.

SUPPLEMENTARY INFORMATION: When manufacturers do not follow established
policies and procedures for postage meters loaned to customers for
temporary use (``loaner meters'') and those used for demonstration
purposes, there are potential revenue protection problems as well as
costly data entry errors. The potential for postage meter misuse and
fraud must be eliminated. To accomplish this objective, the Postal
Service must publish procedures for handling loaned and demonstration
meters, and manufacturers' employees, dealers, and representatives must
follow them.

List of Subjects in 39 CFR Part 501

    Administrative practice and procedure, Postal Service.

    For the reasons set out in this document, the Postal Service is
amending 39 CFR part 501 as follows:

PART 501--AUTHORIZATION TO MANUFACTURE AND DISTRIBUTE POSTAGE
METERS

    1. The authority citation for part 501 continues to read as
follows:

    Authority: 5 U.S.C. 552(a); 39 U.S.C. 101, 401, 403, 404, 410,
2601, 2605; Inspector General Act of 1978, as amended (Pub. L. 95-
452, as amended), 5 U.S.C. App. 3.

    2. Section 501.22 is amended by adding new paragraphs (s) and (t)
to read as follows:

[[Page 20746]]

Sec. 501.22  Distribution controls.

* * * * *
    (s) A demonstration meter is typically used to acquaint a potential
user with the features of a meter as part of the sales effort. The
following procedures must be followed to implement controls over
demonstration meters:
    (1) A demonstration meter may print only specimen indicia and must
not be used to meter live mail.
    (2) A demonstration meter must be recorded as such on internal
manufacturer inventory records and must be tracked by model number,
serial number, and physical location. If the meter's status as a
demonstration meter changes, the meter must be administered according
to the procedures that apply to its new status.
    (3) A demonstration meter may be used only for demonstrations by a
manufacturer's dealer or branch representative and must remain under
the dealer's or representative's direct control. A demonstration meter
may not be left in the possession of the potential customer under any
circumstance.
    (t) A postage meter loaned to a customer for temporary use (a
``loaner meter'') is typically used to acquaint a potential user with
the features of a meter as part of the sales effort, or serves as a
temporary placement while the customer awaits delivery of a new meter.
The following procedures must be followed to implement controls over
loaner meters:
    (1) A loaner meter prints valid indicia and may be used to apply
postage to a mailpiece. Only electronic, remote-set meters may be used
as loaner meters. The city/state designation in the loaner meter
indicia must show the location where the user's mail will be deposited.
    (2) A customer may have possession of a loaner meter for a maximum
of five consecutive business days. When the customer chooses to
continue the use of a postage meter, the loaner meter must be retrieved
and a new meter must be installed under the customer's license.
    (3) The manufacturer's dealer or branch representative
(``representative'') must have a USPS-issued meter user license to
place a loaner meter. A single license per USPS district can be used to
issue loaner meters to customers in any of the different Post Office
service areas within that district.
    (4) Loaner meters must be reported electronically to the USPS meter
tracking system when activated. A Form 3601-C, Postage Meter Activity
Report, must be initiated to activate a loaner meter under the
representative's meter license. The licensee and meter location
information on the form will show the representative rather than the
temporary user. However, loaner meters may only be placed with
customers who have been issued a USPS meter license.
    (5) Representatives must record and verify the accuracy of the
ascending and descending register readings when a loaner meter is
placed with the customer. Any discrepancies detected during the
verification process must be reported immediately to the meter
manufacturer, who will then notify Postage Technology Management.
    (6) The representative is responsible for resetting the loaner
meter with postage and must arrange for reimbursement directly with the
customer.
    (7) The representative maintains full responsibility for the loaner
meter. As both a manufacturer's representative and a meter licensee,
the representative is subject to the provision of Domestic Mail Manual
part P030 and Code of Federal Regulations part 501. As a licensee, the
representative assumes all licensee responsibilities under USPS meter
regulations and must ensure that loaner meters are available for
examination by the Postal Service on demand and are examined in
accordance with Postal Service policy. Any losses incurred by the
Postal Service as a result of fraudulent use of the loaner meter by the
customer are the responsibility of the meter licensee, the customer,
and the manufacturer.
    (8) When the customer returns the meter, the dealer or branch
representative must record and verify the accuracy of the ascending and
descending register readings and inspect the meter. Any discrepancies
or indication of tampering or fraudulent use must be reported
immediately to the meter manufacturer, who will then notify Postage
Technology Management. In such circumstance, the meter must not be used
and must be returned to the manufacturer's QAR department via
Registered Mail.
    (9) Loaner meters must be reported electronically to the USPS meter
tracking system when withdrawn from service. The dealer or branch
representative must prepare Form 3601-C, Postage Meter Activity Report,
for each loaner meter withdrawn.

Stanley F. Mires,
Chief Counsel, Legislative.
[FR Doc. 01-10148 Filed 4-24-01; 8:45 am]
BILLING CODE 7710-12-P