We’ve used a franking machine for the past 8 years and whilst it has suited us some of the time there are some wild claims out there especially from some suppliers who claim it is cheaper than using stamps. Once you add in all the hidden charges it is, in our experience, often more expensive than using stamps.
So what are the costs missing from the headline rates you see advertised:
- Rental Costs
- Maintenance Fees.
- Software Assurance.
- Recharge Fees.
- Ink Cartridge costs.
- Weighing Scale Fees.
- The Hassle factor.
1. Rental costs you think cold be minimised with the the purchase of a machine, unfortunately you cannot use a franking machine in the UK without a support contract authorised by Royal Mail which in turn means support companies own the market and will not take on an user-owned machine. Subsequently the Franking Machine Market appears to be dominated by companies with poor customer service practices and a penchant to overcharge at every opportunity.
2. Rental companies initially offer what appears to be reasonable maintenance fee however given they will try to lock you into a long contract, by offering the longer ones with cheaper rental, once signed up they will increase the support costs year on year by a good amount. The support contract will state lots of good reasons why you need the contract such as calibration of the weighing scales however during our contract we never had a visit from the company check or carry out any preventative maintenance on the machine including calibration.
3. Software Assurance, all modern franking machines have a software element which controls the pricing and record what you’re sending so the companies can account for VAT inclusive services such as Saturday delivery or Next Day 9.00am delivery. When Royal Mail change their fees (which they do at least once a year) you have to update the software to take account of the new prices, the Franking Machine company will charge you to update the software as it is not included in the Support Contract. You get a choice of paying annually for the service or paying as and when it gets updated.
4. Recharge fees; every time you add money to the franking machine you’ll get charged a recharge fee, typically this is a fee per recharge so the more you recharge in one go the cheaper it is.
5. Ink Cartridge Costs: the maintenance contract will state only authorised cartridges can be used in the machine otherwise the contract is deemed broken, these cartridges are typically 2-3 times the cost of 3rd party supplier cartridges which again are inflated due to the small market size.
6. Weighing scale fees. Franking Machine companies will separate the franking machine from the weighing scales, this means they can charge for an additional contract for the weighing scales.
7. In our experience we’ve found the franking market to be poorly regulated, this will probably get worse with the privatisation of Royal Mail, we’ve been duped into longer contracts than initially promised, had our contract traded onto another company without agreement and generally ripped off at every opportunity.
So why use a Franking Machine; frankly (pun intended, sorry) nowadays there is no need to, at the lower volume it would be more cost effective to use stamps (which can be purchased and printed online) and at the higher level it is cheaper to contract direct and use something like Royal Mail’s Online Business Account with a Pre-Paid Impression licence.