39 C.F.R. § 501.16

Current through September 30, 2024
Section 501.16 - PC postage payment methodology
(a) The PC Postage customer is permitted to make payments for postage in one of two ways: Automated clearinghouse (ACH) transfer or credit card.
(b) The provider must make payments on behalf of the customer to the Postal Service in accordance with contractual and/or regulatory responsibilities.
(c) The Postal Service requires that the provider publicize to all PC Postage customers the following payment options (listed in order of preference):
(1) Automated clearinghouse (ACH) debits/credits.
(2) Credit cards.
(d) The provider must reimburse the Postal Service for returned payments promptly, comply with NACHA rules, and maintain customer ACH agreements.
(1)Financial responsibility for returned payments. The provider must reimburse the Postal Service upon request for any returned payments. The provider must, upon first becoming aware of a returned payment, immediately lock the customer account to prevent resetting the account until the provider receives confirmation of payment for the returned payment. If a fee, penalty or fine is assessed against the Postal Service for returned payments from a provider's customer, the Postal Service may request reimbursement for such fee, penalty or fine from the provider. The provider is required to remit the amount of the returned payment plus the amount of the reimbursement request, to the extent applicable, to the Postal Service within ten (10) banking days. Invoices will be created monthly for returns and/or applicable penalties or fines incurred for the previous month. The ten (10) banking days will start once the invoice is mailed. The provider has discretion to decide whether to charge its customer for any such reimbursement costs (of fees, penalties or fines) the provider pays to the Postal Service in connection with the customer's returned payment.
(2)Responsibility to comply with NACHA rules. The provider is required to comply with the most recent edition of the NACHA rules, published annually by the North American Clearing House Association. Failure to comply may result in revocation of access to applicable Postal Service ACH programs.
(3)Responsibility to maintain customer ACH agreements. The provider must obtain and store an agreement with each and every customer utilizing ACH debit as a payment method. The customer agreement must authorize the provider to debit the designated bank account identified to pay for postage through the Postal Service account of its choice. The agreement must have at least the following elements: Company Name (if applicable), Name and Title and Address of the person entering into the agreement, Contact Information (Phone Number, Fax Number and eMail Address as applicable), Date and Signature (or appropriate electronic signature evidence) of Agreement, Customer's Bank Name, Bank Routing Number, Account Number and Account Type (Checking or Savings, Business or Personal) being agreed to transact upon, an Attestation that the person submitting the form is authorized to act on behalf of the account, and Termination Date of the Agreement (if applicable). A revision period until August 31, 2024, will be provided to update agreement forms to include the minimum data elements listed. The agreement must be stored for at least two years after termination of the agreement, must be easily reproducible, and must be provided electronically to the Postal Service within three business days of electronic written request by the Postal Service in a format that can be easily and readily used for all NACHA and ACH related purposes including, without limitation, audit and defense of claims. The Postal Service will provide specific written guidance separately if requested. Failure to comply may result in revocation of access to applicable Postal Service ACH programs.
(4)Credit cards. Unless otherwise established in a written agreement between the Postal Service and the provider, the provider is fully responsible for its own credit card compliance.
(e)Refunds. The provider issues a refund to a customer for any unused postage in a Postage Evidencing System. After verification by the Postal Service, the provider will be reimbursed by the Postal Service for the individual refunds provided to customers by the provider.
(f)Security and revenue protection. To receive Postal Service approval to continue to operate PC Postage systems, the provider must submit to a periodic examination and provide a SOC 1 Type II Report of its PC Postage system and any other applications and technology infrastructure that may have a material impact on Postal Service revenues, as determined by the Postal Service. Additionally, provider must submit to a periodic examination and provide a SOC 2 Type II Report of its meter system data security, accuracy, processing integrity and data integrity for any applications, reports, and technology infrastructure that may have a material impact on the provider's reports, which the Postal Service relies upon. The examination shall be performed by a qualified, independent audit firm and shall be conducted in accordance with the Statements on Standards for Attestation Engagements (SSAEs) No. 18, Service Organizations, developed by the American Institute of Certified Public Accountants (AICPA), as amended or superseded. Expenses associated with such examination shall be incurred by the provider. The examination shall include testing of the operating effectiveness of relevant provider internal controls (SOC 1 Type II SSAE 18 Report). If the service organization uses another service organization (sub-service provider), the provider should consider the nature and materiality of the transactions processed by the sub-service organization and the contribution of the sub-service organization's processes and controls in the achievement of the Postal Service's control objectives. The control objectives to be covered by the SOC 1 Type II SSAE 18 report are subject to Postal Service review and approval, and are to be provided to the Postal Service 30 days prior to the initiation of each examination period. Resetting companies are expected to submit any request for changes to control objectives by December 31 of each year, which will be taken under consideration by the Postal Service for review and approval. The Postal Service will provide common control objectives to be covered by the SOC 1 Type II SSAE 18 by January 31 each year. As a result of the examination, the service auditor shall provide the provider and the Postal Service with an opinion on the design and operating effectiveness of the provider's internal controls related to the meter system, and any other applications and technology infrastructure considered material to the services provided to the Postal Service by the RC. SOC 1 and SOC 2 examinations are to be conducted on no less than an annual basis, and are to be as of and for the 12 months ended June 30 of each year (except for new contracts for which the examination period will be no less than the period from the contract date to the following June 30, unless otherwise agreed to by the Postal Service). The SOC 1 and SOC 2 examination reports are to be provided to the Postal Service by August 15 of each year. To the extent that internal control weaknesses are identified in a SOC 1 Type II SSAE 18 report, the Postal Service requires prompt communication and remediation of such weaknesses and will review working papers and engage in discussions about the work performed with the service auditor. The Postal Service requires that all remediation efforts (if applicable) are completed and reported by the provider to the Postal Service's fiscal year end (September 30). In addition, the provider will be responsible evaluating its internal control environment related to the meter system and any other applications and technology infrastructure considered material to the services provided to the Postal Service by the provider, in particular, disclosing changes to internal controls for the period of July 1 to September 30. This evaluation should be documented and submitted to the Postal Service by October 15 each year. The provider will be responsible for all costs related to the examinations conducted by the service auditor and the RC.
(g)Inspection of records and facilities. The provider must make its facilities, which handle the operation of the PC Postage system and all records about the operation of the system, available for inspection by representatives of the Postal Service at all reasonable times.
(h) To the extent that the customer maintains funds on deposit for the payment of postage, the provider is required to incorporate the following language into its agreements with PC Postage customers:

Acknowledgment of Deposit Requirement-PC Postage

By signing this agreement with the provider, you represent that you have read the Acknowledgment of Deposit Requirement-PC Postage and are familiar with its terms. You agree that, upon execution of this agreement with the provider, you will also be bound by all terms and conditions of the Acknowledgment of Deposit Requirement-PC Postage, as it may be amended from time to time.

(i)Revenue assurance.
(1) The PC Postage provider must support business practices to assure Postal Service revenue and accurate payment from customers. For purposes of this paragraph, PC Postage provider shall mean: providers who offer PC Postage products (as such terms are defined in § 501.1 ); Click-N-Ship® service; and postage resellers when such resellers transmit postage revenue to the Postal Service in any manner other than through a PC Postage provider. With respect to the reseller transactions described above, the resellers, and not the PC Postage providers who provide the labels, are responsible for complying with this paragraph. For the purpose of this paragraph, a reseller is an entity that obtains postage through a PC Postage provider and is authorized to resell such postage to its customers pursuant to an agreement with the Postal Service. For example, an entity that sells postage to its customers, but uses a PC Postage provider to enable its customers to print postage labels, is a reseller hereunder. If that entity collects postage revenue from its customers and transmits it to the Postal Service directly (instead of through the PC Postage provider) that entity shall be deemed a PC Postage provider hereunder. For the purpose of this paragraph, a customer is the person or entity that deposits the mail piece into the mail system. PC Postage providers must comply with these revenue assurance requirements regardless of whether they have a direct relationship with the customer or sell postage to the customer through one or more resellers.
(2)
(i) For the purposes of this paragraph, a postage adjustment is defined as the difference between the postage or fee actually paid to the Postal Service for a specific service, and the actual postage due to the Postal Service under the published or negotiated rate for that service, as applicable, which shall be calculated as of the time the mail piece is entered into the mailstream.
(ii) When the collection of a postage adjustment or the provision of a refund is appropriate because a customer has underpaid or overpaid the amount of postage that should have been paid, and such postage adjustment exceeds a threshold amount to be set by the Postal Service from time to time in its discretion, the PC Postage provider must, upon receiving notice from the Postal Service, pay, attempt to collect, or refund, as applicable, the postage adjustment in accordance with paragraph (i)(2)(iii) of this section. The Postal Service will supply the PC Postage provider with the details necessary to explain the correction and the amount of the postage adjustment to be used in the adjustment process. As part of this process, the PC Postage provider shall enable customers to submit disputes concerning the postage adjustment to the Postal Service, in a method approved by the Postal Service, including via phone call to the customer care center or API in the PC Postage provider's user interface of postage collections. In addition, the PC Postage provider must convey the Postal Service's dispute decision to the customer. If the Postal Service determines the customer's dispute was valid, and the customer had already paid the postage adjustment, the PC Postage provider must return the postage adjustment to the customer when notified by the Postal Service according to the rules set forth in paragraph (i)(2)(iii)(B) of this section.
(iii)
(A) In the case of an underpayment that exceeds the threshold amount, within 14 business days of receiving notice of the underpayment from the Postal Service the PC Postage provider must pay the postage adjustment directly to the Postal Service, or seek to collect the postage adjustment from the customer in accordance with this paragraph. If the PC Postage provider opts to pursue collection activity, it must notify the customer of the details of the postage adjustment (including the dispute process), retain evidence that such notice was actually received by the customer, and attempt to collect the postage adjustment by adjusting the funds available to the customer in the Postage Evidencing System, or if funds are not available, facilitating customer payment by invoicing the customer or by pursuing other methods available to collect against the customer or access funds of the customer. If the customer has a Postage Evidencing System account, the PC Postage provider must process any refunds due to the customer under paragraph (i)(2)(iii)(B) of this section before processing any collections due to the Postal Service hereunder. If the PC Postage provider opts to pursue collection activity, it shall continue to make affirmative efforts to collect the postage adjustment from the customer until the postage adjustment is satisfied in whole or the collection period (as defined in paragraph (i)(2)(iii)(C) of this section) expires. Immediately upon receiving or securing access to funds of the customer, the PC Postage provider shall remit to the Postal Service any and all available funds from the customer's account from the Postage Evidencing System or that are otherwise recovered by the PC Postage provider to the extent necessary to satisfy the postage adjustment. The postage adjustment must be paid in full; no partial payments will be accepted by the Postal Service, except for payments made under paragraph paragraph (i)(2)(iii)(C) of this section.
(B) In the case of an overpayment that exceeds the threshold amount, the Postal Service shall within 14 business days of identifying the overpayment, provide notice of the postage adjustment to the PC Postage provider and instruct the PC Postage provider to give the customer a credit and adjust the funds available to the customer in the Postage Evidencing System. If the Postage Evidencing System account has been closed or for customers who do not have individual Postage Evidencing System accounts, the Postal Service shall instruct the PC Postage provider to issue a refund to the customer and the Postal Service shall either refund the postage adjustment to the PC Postage provider or permit the PC Postage provider to submit a reconciliation to the Postal Service. The PC Postage provider must immediately upon receiving notice of the overpayment from the Postal Service, notify the customer and, consistent with the Postal Service's instructions, adjust the funds available to the customer in the Postage Evidencing System, refund the postage adjustment to the customer, or provide a credit to the customer. If the PC Postage provider is unable to comply with the above requirements within 2 business days, the PC Postage provider must immediately notify the Postal Service.
(C) The collection period is a time period to be set by the Postal Service not to exceed 60 calendar days after initial notification by the Postal Service, subject to any applicable notification periods and dispute mechanisms that may be available to customers for these corrections. If an underpayment has not been satisfied within this collection period, the PC Postage provider shall adjust any funds available to the customer in the Postage Evidencing System to satisfy the postage adjustment to the greatest extent possible, and assist the Postal Service in its efforts to pursue any remedies that may be available in law or equity, including seeking payment directly from the customer.
(iv)
(A) In the case of an underpayment that exceeds the threshold amount, immediately upon receiving notice of the underpayment from the Postal Service the PC Postage provider shall prohibit the customer from printing additional postage labels until the postage adjustment is satisfied in accordance with paragraph (i)(2)(iii)(A) of this section, or the customer disputes the adjustment and prevails. The Postal Service may, in its discretion, waive or delay this prohibition in specific instances.
(B) Separately, without regard to any threshold, in certain cases (such as where a customer is suspected of having intentionally or repeatedly underpaid postage) the Postal Service may, in its discretion, instruct the PC Postage provider to shut down temporarily or permanently a customer's ability to print PC Postage, and the PC Postage provider shall promptly comply with such instruction.
(C) In no event shall the Postal Service be liable to any PC Postage provider, customer or other party for any direct, indirect, exemplary, special, consequential, or punitive damages (including without limitation damages relating to loss of profit or business interruption) arising from or related to any customer's permanent or temporary inability to print postage labels in accordance with this paragraph (i)(2)(iv) or as a result of funds offset in accordance with this paragraph.
(v) The Postal Service, in its discretion, may adopt and modify from time to time, and the PC Postage providers shall comply with, business rules setting forth processes (including time constraints) for payments, refunds, account suspensions, collections, notifications, dispute resolutions and other activities to be performed hereunder. Such business rules will be published in the FEDERAL REGISTER.
(3)
(i) Without regard to any threshold, if the PC Postage provider incorrectly programmed postage rates, delayed programming postage rate changes, or otherwise provided systems or software which caused customers to pay incorrect postage amounts, then within two calendar weeks of the PC Postage provider being made aware of such error, the PC Postage provider shall:
(A) Correct the programming error;
(B) Provide the Postal Service with a detailed breakdown of how the error affected the PC Postage provider's collection of revenue; and
(C) Pay the Postal Service for the postage deficiency caused by the programming error, except in instances where the error was caused by the Postal Service or as a direct result of incorrect specifications provided by the Postal Service.
(4) The PC Postage provider is responsible for ensuring that:
(i) All customers pay (and the Postal Service receives) the current published prices that are available to customers who purchase postage through an approved PC Postage provider, or negotiated contracted prices where applicable in accordance with this paragraph; and
(ii) All payments to the Postal Service (or the log files necessary for the Postal Service to collect payments directly from customers) are complete and accurate and are initiated or transmitted, as applicable, to the Postal Service each day.
(5) Each PC Postage provider shall:
(i) Before each customer's first transaction following the implementation date of August 1, 2017, provide notice to such customer of the terms, conditions and processes described in this paragraph-including, without limitation, that the customer may be charged for deficient payments and prevented from printing additional postage labels while a postage adjustment remains unpaid-and obtain a certification from each customer that the customer has read, understands and agrees to such terms, conditions and processes, as they may be amended or supplemented from time to time;
(ii) Ensure that each customer certifies that it:
(A) Will comply with all laws and regulations applicable to Postal Service services, including, without limitation, the provisions of the Domestic Mail Manual and the International Mail Manual,
(B) Does not owe any money to the Postal Service and is not a controlling member or officer of an entity that owes money to the Postal Service, and
(C) Authorizes the PC Postage provider to disclose the customer's personal information to the Postal Service, and such other information retained by the PC Postage provider that may enable the Postal Service to collect debts owed to it, and has the proper authority to disclose such information;
(iii) Maintain a complete and accurate record for each customer, which includes such customer's current name and a valid U.S. address that is sufficient for service of process under the law, as well as a copy of all terms agreed to by the customer and the date of such agreements;
(iv) Comply with applicable laws, rules, regulations and guidelines and ensure that its Postage Evidencing Systems, software, interfaces, communications and other properties that are used to sell or market Postal Service products accurately describe such products;
(v) Cover any costs or damages that the Postal Service may incur as a result of such PC Postage provider or its employees, contractors, or representatives failing to comply with the terms of this section, or any applicable law, regulation, rule, or government policy; and
(vi) In performing its obligations hereunder, comply with the business rules that shall be published in the FEDERAL REGISTER from time to time and provide all agreed-upon interface documentation (as updated from time to time).
(6) In the event that the Postal Service fails to exercise or delays exercising any right, remedy, or privilege under this paragraph, such failure or delay shall not operate as a waiver thereof or of any other provision hereof, nor shall any single or partial exercise of any right, remedy, or privilege preclude any further exercise of the same. The rights and remedies available to the Postal Service under this paragraph are cumulative and in addition to, and do not diminish, any rights or remedies otherwise available to the Postal Service.

39 C.F.R. §501.16

72 FR 33163, June 15, 2007, as amended at 75 FR 56472, Sept. 16, 2010; 79 FR 10995, Feb. 27, 2014; 80 FR 42392, July 17, 2015; 82 FR 15465, Mar. 29, 2017; 85 FR 12873, Mar. 5, 2020
82 FR 15465, 8/1/2017; 85 FR 12873, 3/5/2020; 89 FR 13981, 3/27/2024