Hidden costs of franking machines

A franking machine is supposed to save your business money. Then the invoices start arriving.

Alongside the machine rental and postage, you may find charges for topping up the account, changing postal rates, maintaining the equipment or simply not using it enough.

The exact fees and names vary between suppliers and contracts, so not every charge below will apply to every business. The important bit is knowing what to look for before you sign.

Here are 12 hidden franking machine costs worth checking.

1. The meter reset fee

Some providers charge a fee when you add postage credit to the machine. Paying to add money to an account may sound backwards, but it can appear as a meter reset or postage refill charge.

2. The dormant account fee

If you do not use the account for a set period, your contract may include a dormant or inactivity fee.

This can be particularly relevant for businesses with seasonal or unpredictable mailing volumes.

3. The postage advance fee

Some suppliers offer credit or an account facility that lets you use postage before paying the full balance.

Check whether there is an administration, advance or account fee attached to that arrangement. It may be bundled into another part of the invoice rather than shown as a separate service.

4. The electronic payment fee

Your agreement may include a charge for processing an electronic funds transfer or automatic payment.

It is worth checking how often the fee applies and whether another payment method avoids it.

5. The insufficient funds fee

If there is not enough money available when a supplier tries to collect a payment, you may be charged an insufficient funds fee.

Your bank may also apply its own charge, which can make one missed payment twice as irritating.

6. The meter postage overage fee

Some franking agreements are based on an estimated mailing volume.

If your business sends more than expected, the contract may include an overage fee. Growth is good. Being charged extra because of it is less fun.

7. The credit overlimit fee

Going over the agreed credit limit may lead to another charge.

Check the limit, how it is calculated and whether your supplier alerts you before you reach it.

8. The postage rate change fee

Postal prices change over time, and the rates stored on a franking machine need to be updated.

Some contracts may include charges for downloading new rates, updating software or maintaining access to the correct pricing.

9. The mailsort or collection fee

A bulk mailing may qualify for a different postage rate, but there can still be additional collection, preparation or processing charges.

Ask for the complete cost before assuming a bulk discount will automatically make the mailing cheaper.

10. The cost of consumables

Consumables may not be listed as a fee, but they still belong in the calculation.

Franking machines require specialist ink to print the postage mark. Depending on your agreement, using a third-party cartridge may affect the machine’s warranty or support cover.

You may also need franking labels, cleaning products and other supplier-approved items.

11. The cost of finance

Many businesses rent or lease their franking machine rather than buying it outright.

A lease spreads the cost, but finance charges can make the total amount paid much higher than the machine’s purchase price. Depending on the contract, you may not own the equipment when the agreement ends.

Before signing, check the full contract value rather than focusing on the monthly payment.

12. The service contract fee

A service agreement may cost as much as, or more than, the equipment rental itself.

Check exactly what the contract covers. Some agreements include preventative maintenance, while others mainly provide support if the machine develops a fault.

You should also confirm whether parts, engineer visits and replacement equipment are included.

Some of these charges sound like they were invented during a particularly creative invoicing meeting. Unfortunately, that does not make them any less real when they appear on the bill.

The advertised rental and postage rates only show part of what a franking machine costs.

To get a more useful comparison, include the machine, contract fees, ink, maintenance, envelopes and the staff time spent printing, folding and preparing each letter.

Add your current mailing costs below to compare them with sending letters through Postworks.

That is a lot of possible fees for a machine that was meant to make postage simpler.

With Postworks Send, your team uploads letters online and Postworks handles the printing, folding, enclosing and postage.

There is no franking machine to rent, no specialist ink to order and no equipment waiting for somebody to service it.

Take a look at our guide to franking machine alternatives or use the calculator above to compare the full costs.

For more information, email success@postworks.co.uk.