[Federal Register Volume 66, Number 217 (Thursday, November 8, 2001)]
[Rules and Regulations]
[Pages 56432-56435]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-28010]


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POSTAL SERVICE

39 CFR Part 111


Refunds and Exchanges for Metered Postage

AGENCY: Postal Service.

ACTION: Final rule.

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SUMMARY: The Postal Service is amending the Domestic Mail Manual (DMM) 
P014, Refunds and Exchanges, to clarify the refund policy for metered 
postage. These changes are being made in conjunction with the final 
rule amending P030, Postage Meters (Postage Evidencing Systems).

DATES: This rule is effective January 1, 2002.

FOR FURTHER INFORMATION CONTACT: Wayne Wilkerson, (703) 292-3590, or 
facsimile, (703) 292-4073.

SUPPLEMENTARY INFORMATION: The proposed rule to revise the current DMM 
P014, Refunds and Exchanges, was published in the Federal Register 
August 15, 2001, (66 FR 42817). The Postal Service requested that 
comments on the proposed rule be submitted by September 14, 2001. The 
date for receipt of comments was extended to September 25, 2001. The 
Postal Service received two written comments from postage evidencing 
system providers and one comment from a governmental organization. The 
Postal Service gave thorough consideration to the comments it received, 
modified the proposed rule as appropriate, and now announces the 
adoption of the final rule. The Postal Service's evaluation of the 
significant comments follows. The final rule, as amended, follows the 
discussion of the comments.

Discussion of Comments

    1. Time limit on refunds. Two commenters expressed concern that 
only allowing 30 days from the date printed in indicia for users to 
obtain a refund for unused indicia printed on unmailed envelopes, 
wrappers, or labels would increase administrative burdens on both the 
Postal Service and users. Both commenters requested an extension of 
this time period to 90 days.
    The Postal Service carefully considered this requirement and agrees 
to extend the time period to 60 days for unused indicia printed by all 
types of postage evidencing systems, except for PC Postage (TM) 
systems. The time limit for PC Postage systems will remain 30 days.
    2. Damaged postage evidencing systems. One commenter noted that 
although the procedures for reconstructing the register values for a 
refund or transfer of unused postage appear to be limited to systems 
damaged by fire, there are many other ways in which a system could 
become damaged.
    The Postal Service agrees with the commenter and changed the 
regulation in response to this comment. The Postal Service also 
clarified that the unused postage value remaining in a postage 
evidencing system checked out and withdrawn from service may be 
refunded only in certain circumstances and only with the proper 
supporting documentation, as described in the revised regulation.
    3. Refund of unused postage value remaining in a postage evidencing

[[Page 56433]]

system. Two commenters asked that an option be added to allow the 
transfer of the unused postage to the appropriate postage payment 
account for withdrawn postage evidencing systems.
    The Postal Service agrees with the commenters and changed the 
regulation by adding this option to reflect current practice.
    4. Examinations.
    (a) One commenter asked that the required examination of a postage 
evidencing system to verify the refund amount for unused postage value 
remaining in a postage evidencing system be waived if there is no 
question of system accuracy.
    The Postal Service requires examination of all postage evidencing 
systems to verify the amount before any remaining funds are cleared 
from the meter. Either a refund or credit is initiated for unused 
postage value remaining in a postage evidencing system or additional 
money is collected to pay for postage value used, based on what is 
found. The Postal Service made no change to the regulation in response 
to this comment.
    (b) One commenter asked that the Postal Service specify 
alternatives on how to perform the required examinations to verify the 
refund amount for unused postage value remaining in a postage 
evidencing system.
    The Domestic Mail Manual (DMM) regulates customer use of postal 
services. Regulations affecting providers of postage evidencing systems 
are found in Title 39, Code of Federal Regulations (CFR) part 501, 
Authorization to Manufacture and Distribute Postage Meters. The Postal 
Service will publish proposed revisions to this part to include 
policies and regulations pertaining to more secure postage evidencing 
systems, such as those that use a PSD, those that generate IBI, and PC 
Postage systems, in a future issue of the Federal Register.
    5. Refund indicia. One commenter asked that instead of requiring 
the user to print a refund indicia, the provider should be allowed to 
calculate the refund due for a PC Postage system if the provider has a 
Postal Service-approved method for doing so.
    The Postal Service carefully considered the request and makes no 
change to the regulation at this time.

List of Subjects in 39 CFR Part 111

    Administrative practice and procedure, Postal Service.

    For reasons stated in the preamble, the Postal Service is amending 
39 CFR part 111 as follows:

PART 111--[AMENDED]

    1. The authority citation for 39 CFR part 111 continues to read as 
follows:

    Authority: 5 U.S.C. 552(a); 39 U.S.C. 101, 401, 403, 404, 3001-
3011, 3201-3219, 3403-3406, 3621, 3626, 5001.


    2. Revise the Domestic Mail Manual (DMM) as follows:

Domestic Mail Manual (DMM)

* * * * *

P  Postage and Payment Methods

P000  Basic Information

P010  General Standards

* * * * *

P014  Refunds and Exchanges

* * * * *
1.0  STAMP EXCHANGES
* * * * *

1.7  Stamps Converted to Other Postage Forms

    [Revise 1.7 to read as follows:]
    A customer may submit postage stamps for conversion to an advance 
deposit for permit imprint mailings, subject to these conditions:
    a. Only full panes of postage stamps (or coils of stamps in the 
original sealed wrappers) are accepted for conversion. Accepted stamps 
include commemorative stamps issued no more than 1 year before the 
requested conversion date or regular stamp issues not officially 
withdrawn from sale.
    b. A request for stamp conversions must be made in writing to the 
district manager of Customer Service and Sales in the district where 
the customer's post office is located. The customer's request must 
include:
    (1) Name, denomination, quantity, and value of stamps for which 
conversion is requested.
* * * * *
    c. The amount of postage applied to a permit imprint advance 
deposit account through conversion is the full face value of the 
stamps.
* * * * *
    e. No part of any amount applied to a permit imprint advance 
deposit account from the conversion of postage stamps is later 
refundable in cash or by any other means.
* * * * *
2.0  POSTAGE AND FEES REFUNDS

2.1  Refund Standards

* * * * *
    [Revise item b to read as follows:]
    b. 3.0  for refund requests for postage evidencing systems and 
metered postage. Metered postage is printed by a postage evidencing 
system (P030). Refunds may be requested for unused indicia, unused 
postage value remaining in a postage evidencing system, and the unused 
balance in a postage payment account.
* * * * *
    [Revise heading and text of 2.5 to read as follows:]

2.5  Refunds for Metered Postage

    A refund for complete, legible, and valid, unused indicia printed 
on unmailed envelopes, wrappers, or labels is made under 3.2 when they 
are submitted by the licensee within 60 days from the dates shown on 
the indicia except for indicia produced by PC Postage (TM) systems. For 
PC Postage systems, the unused indicia must be submitted within 30 days 
from the dates shown in the indicia. For all indicia, except those 
produced by a PC Postage system, the licensee submits the indicia to 
the licensing post office and the USPS processes the refund. USPS 
charges 10% of the face value of the indicia if the total is $250 or 
less. If the total face value is more than $250, the charge is $10 per 
hour for the actual hours to process the refund; the minimum charge is 
$25. The licensee submits indicia produced by a PC Postage system to 
the system provider for refund processing. The provider may charge for 
processing refund requests.
* * * * *

2.8  Applying for Refund

    [Revise 2.8 to read as follows:]
    Except for refunds for metered postage under 2.5, the customer must 
apply for a refund on Form 3533; submit it to the postmaster; and 
provide the envelope, wrapper, or a part of it showing the names and 
addresses of the sender and addressee, canceled postage and postal 
markings, or other evidence of postage and fees paid for which the 
refund is requested.

2.9  Ruling on Refund Request

    [Revise 2.9 to read as follows:]
    Refunds are decided as follows:
    a. Metered postage, except for PC Postage systems. The postmaster 
at the licensing post office grants or denies requests for refunds for 
metered postage under 3.2.a. The licensee may appeal adverse decisions 
through the manager of Postage Technology Management, USPS Headquarters 
(G043).
    b. PC Postage systems. The system provider grants or denies 
requests for refunds for indicia printed by PC Postage systems under 
3.2.b, using established USPS criteria. The licensee may appeal adverse 
decisions through

[[Page 56434]]

the manager of Postage Technology Management, USPS Headquarters.
    c. Optional Procedure (OP) mailing. A mailer's request for a refund 
for an Optional Procedure (OP) mailing must be submitted to the RCSC 
manager.
    d. All other postage. The local postmaster grants or denies all 
other requests for refunds under 2.0. The customer may appeal adverse 
decisions through the postmaster to the RCSC.
* * * * *
    [Revise headings and text of 3.0 to read as follows:]
3.0  REFUND REQUEST FOR POSTAGE EVIDENCING SYSTEMS AND METERED POSTAGE

3.1  Unused Postage Value in Postage Evidencing Systems

    The unused postage value remaining in a postage evidencing system 
checked out and withdrawn from service may be refunded depending upon 
the circumstance and USPS ability to make a responsible determination 
of the actual or approximate amount of the unused postage value. If the 
postage evidencing system is withdrawn for faulty operation that is not 
the fault of the licensee, a final postage adjustment or refund will be 
withheld pending the system provider's report of the cause to the USPS 
and the USPS determination of whether or not a refund is appropriate, 
and if so, the amount of the refund. If the postage evidencing system 
is damaged by fire, flood, etc. postage may be refunded or transferred 
only if the registers are legible or the register values can be 
reconstructed by the system provider based on adequate supporting 
documentation, there is proof of denial of the licensee's insurance 
claim in cases where the loss was insured against, and the licensee 
provides a statement on the cause of the damage. Refunds for specific 
postage evidencing systems are handled as follows:
    a. For a manually reset meter being checked out and withdrawn from 
service, unused postage value may be transferred to another of the 
licensee's meters licensed at the same post office, or the licensee may 
request a refund. The USPS must examine a manually reset meter and 
verify the amount before any remaining funds are cleared from the meter 
and a refund or credit is initiated for unused postage value, or 
additional money is collected to pay for postage value used, based on 
what is found. The provider may check out and withdraw a specifically 
designated manually reset meter model from service without USPS 
participation when the provider uses a USPS-approved process to 
transfer the postage remaining on the meter directly to a remotely 
reset meter. Licensees may also submit their own transaction records, 
if any, or a system-generated register as supporting documentation.
    b. For a remote reset postage evidencing system being checked out 
and withdrawn from service, the unused postage value remaining on the 
system may be transferred by the USPS to another of the licensee's 
postage evidencing systems licensed at the same post office, or to the 
licensee's postage payment account, or the licensee may request a 
refund. The USPS must examine the meter and verify the amount before a 
refund or credit is initiated for the unused postage value or 
additional postage is collected, based on what is found, unless the 
provider has a USPS-approved system for automated transfer of funds 
from one meter to another. In this instance, the provider must examine 
the meter before a refund can be issued for the remaining postage 
balance. The licensee may also submit transaction records or a system-
generated register as supporting documentation.
    c. For a PSD Meter or IBI Meter being checked out and withdrawn 
from service, an amount equivalent to the postage value remaining on 
the system will be refunded to the licensed user along with any unused 
balance in the licensee's postage payment account. The provider must 
examine a PSD Meter or IBI Meter and verify the amount before a refund 
or credit is initiated for the unused postage value or additional 
postage is collected, based on what is found. The licensee may also 
submit transaction records, if any, or a system-generated register as 
supporting documentation.
    d. For a PC Postage system that is checked out and withdrawn from 
service, the USPS refunds the entire unused postage value remaining on 
the PSD for the user's system. The refund is issued through the 
licensee's provider. The licensee must notify the provider of the 
intent to withdraw the system. To determine the remaining postage value 
on the PC Postage system, the licensee has the PC Postage system 
generate a refund request indicium for transmittal to the provider for 
verification. A refund can be issued only when the system PSD is in the 
provider's possession.

3.2  Unused Postage Evidencing System Indicia on Mailpieces or 
Labels

    All refund requests for unused postage evidencing system indicia 
must include proof that the person or entity requesting the refund is 
the licensee for the postage evidencing system that printed the 
indicia. Refunds are considered as follows:
    a. Unused postage evidencing system indicia, except for those 
printed by a PC Postage system, are considered for refund only if 
complete, legible, and valid. They must be submitted by the licensed 
user to the postmaster at the licensing post office with Form 3533 
within 60 days of the date in the indicia. The refund request must be 
submitted with the part of the envelope or wrapper showing the 
addressee's name and address (including the window on a window 
envelope). Indicia printed on labels or tapes not stuck to wrappers or 
envelopes must be submitted loose. If a part of the indicia is printed 
on one envelope or card and the remaining part on another, the two must 
be fastened together to show that they represent one indicium. Refunds 
are allowable for indicia on metered reply envelopes only when it is 
obvious that an incorrect amount of postage was printed on them. 
Envelopes or address parts of wrappers on mail returned to sender from 
the mailing office, marked to show no effort was made to deliver (e.g., 
``received without contents''), must be submitted separately with an 
explanation.
    b. Unused indicia printed by a PC Postage system are considered for 
refund only if they are complete, legible, and valid and are submitted 
to the authorized provider for verification within 30 days of the date 
of mailing shown in the indicia, with the required documentation. In 
support of the refund request, indicia printed on an envelope or 
wrapper are submitted with the part of the envelope or wrapper showing 
the addressee's name and address (including the window in a window 
envelope). For indicia printed on a label that is not affixed to an 
envelope or wrapper, the complete label is submitted loose.

3.3  Ineligible Metered Postage Items

    The following metered postage items are ineligible for refunds:
    a. Reply envelopes or cards paid at the proper postage rate.
    b. Indicia printed on labels or tape removed from wrappers or 
envelopes.
    c. Indicia lacking a date, identification of the licensing post 
office or other necessary information that may be required.
    d. Indicia printed on mail dispatched and returned to sender as 
undeliverable as addressed, including mail marked ``no such post 
office'' and mail addressed for local delivery and returned after 
directory service was given or delivery was attempted.

[[Page 56435]]

3.4  Rounding

    Any fraction of a cent in the total to be refunded is rounded down 
to the whole cent (e.g., $4.187 is rounded to $4.18).
4.0  Refund Request for Excess Postage (Value Added Refund)--at Time of 
Mailing
* * * * *

4.10  Form 8096 Required

    [Revise 4.10 to read as follows:]
    The presenter must provide the USPS with an original Form 8096 
completed and signed by each of the presenter's customers who meter any 
pieces in the mailing for which a VAR is requested, and a list of those 
customers. If postage is affixed to the pieces using a postage 
evidencing system by an intermediate agent (not the presenter of the 
mailing) for the owner of the pieces, a signed Form 8096 must be on 
file from the agent whose postage evidencing systems were used to affix 
the postage. Refund requests are denied if all required Forms 8096 are 
not provided.

4.11  Form 8096 Not Required

    Form 8096 is not required for a customer whose mail is metered by 
the presenter with the presenter's own postage evidencing system. In 
such cases, the presenter must provide the post office where it submits 
refund requests with a list, in ascending numeric order, of its own 
postage evidencing system serial numbers and those of any intermediate 
agent used for affixing postage to the pieces included in the mailing.
* * * * *
    An appropriate amendment to 39 CFR part 111 to reflect these 
changes will be published to include this final rule.

Stanley F. Mires,
Chief Counsel, Legislative.
[FR Doc. 01-28010 Filed 11-7-01; 8:45 am]
BILLING CODE 7710-12-P