[Federal Register Volume 66, Number 80 (Wednesday, April 25, 2001)]
[Rules and Regulations]
[Pages 20745-20746]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-10148]


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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