Fact Check

Do Franchised Postal Centers Charge Higher Rates for Sending Mail?

Convenience is a service consumers generally should expect to pay extra for.

Published Feb 2, 2010

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Franchised postal center outlets may charge more for mailing items than official postal service rates.
What's True

Private mailbox outlets can (and typically do) charge more than prevailing postal rates.

What's False

Canada Post franchise outlets cannot charge more than Canada Post's published postal rates.

One business model that has proved quite successful over the last several decades is that of the private postal center. Through both independent stores and chain/franchise outlets (such as Mail Boxes Etc. and Postal Annex), these businesses, although not affiliated with the United States Postal Service (USPS), provide many of the same services as U.S. post offices: they rent mailboxes (similar to post office boxes), sell postage stamps, vend mailing supplies, and package and ship items via U.S. Mail.

These businesses appeal to customers with a variety of needs: those who want the safety and security of receiving mail at sites other than their residence addresses, those who need someone to accept delivery of parcels and signature-required items on their behalf during hours when they would not be home to do so themselves, those who travel and move around frequently and need mail services at multiple locations, and those who live in areas where the local U.S. post office is not conveniently located for them.

These businesses also typically provide a variety of services not generally offered at U.S. post offices, such as the shipment of items via other delivery services (e.g., UPS, FedEx), fax services, copy/print services, passport photos, money transfers, key cutting, and notary services. (The United Parcel Service offers many of these same services at its own branded UPS Stores, which are franchised by the Mail Boxes Etc. chain, a subsidiary of UPS.)

All of this convenience comes with a price, however. Customers who buy postage stamps at private postal outlets will typically pay a mark-up over the face value, and those who use such outlets to ship items via USPS, UPS, or FedEx generally pay a premium over what they would be charged if they dealt with those entities directly. Most regular customers consider those additional fees to be worthwhile trade-offs for the convenience factor, but many folks who only occasionally use such services have been surprised (and disgruntled) to learn that they have been paying surcharges above the standard shipping rates. As a December 2009 New York Times article on the subject observed:

Shipping at Christmas is a hectic thing, enough to give Santa migraines.

So it is no surprise that many people avoid lines at the post office for the one-stop convenience of a U.P.S. Store, where one can send things by United States mail as well as by parcel post.

At some U.P.S. Store franchises, however, clerks do not always tell customers that they may be paying a Grinch-like surcharge when they send something by the United States mail.

Posing as customers, reporters for The New York Times visited several U.P.S. stores looking to mail an item by Priority Mail — one of the postal service's signature offerings. In nearly every instance, they were quoted prices well above the government postal rate, and only one of them was told they were paying a premium for the convenience of using a U.P.S. Store.

One store on the Upper East Side said it would cost $21 to send an eight-pound package by Priority Mail to Old Greenwich, Conn. The clerk suggested using U.P.S. Ground instead for $19.90. At the post office across the street, the same package cost $8.80 to ship. Each arrived in two days.

The article also noted that:

No rules govern how much a U.P.S. Store can charge for postal services, or mandate that it tell customers that it is adding a surcharge.

The only notice the reporters found was a notation on the receipt that reads "U.S. Postal Rates Are Subject to Surcharge," though with no indication of what the markup is.

Several consumer advocates said they did not know of the U.P.S. practice. "I think there's a natural assumption on the part of the consumer that if you're sending something through the U.S. Postal Service, even when it's from another store, you're not paying more, and if you are paying more, it's just a pittance," said Tod Marks, a senior editor at Consumer Reports.

Dave Lewin, a post office spokesman, said U.P.S. store owners were within their rights to charge "whatever the market will bear." But, he said, "customers should be told upfront about any service charges a retailer might add to the postage for Postal Service products and services."

The situation is somewhat more complicated in Canada, where customers can choose between outlets of private postal chains such as PostNet, MBE or UPS Stores, and official Canada Post franchise outlets. One viral message circulated online purportedly recounts the experience of a disgruntled customer who utilized one of the latter, a Canada Post franchise location (in a drug store), and was not only charged over 50% more than the cost of mailing an identical package at a Canada Post post office but was also supposedly told by a Canada Post representative that Canada Post franchises "may charge extra fees as a convenience to their customers" at their discretion:

I learned something over Christmas that I feel compelled to share with you. This won't change your life dramatically or help you survive the apocalypse but it will save you some $$$.

I recently mailed two identical packages via Canada Post one week apart. One would think that the postage should be exactly the same... well, let me tell you...

Pkg # 1 was mailed from an actual Canada Post Office. Postage came to $11.74. Since I knew a second identical package would be mailed in about a week's time, I bought sufficient postage for the second pkg while I was there.

When it came time to mail Pkg #2, I went to the post office in Shopper's Drug Mart. I handed the pkg to the clerk to be put in the outbound mail bag, I was informed that I did not have sufficient postage attached. The clerk proceeded to inform me that I needed to purchase an additional $6 worth of stamps. After explaining how I knew exactly what the postage should be, the clerk offered some lame excuse that Canada Post is unionized and they can say and do anything with impunity and if I wished to mail that pkg from Shopper's then I needed to purchase more stamps.

I told the clerk to stuff it and took back my package and headed to the "real" Canada Post Office, where I would raise hell...

Much to my surprise, the Canadian Postal Clerk took my package, weighed it and tossed it in the mail bag, and it was it's way... When I asked if the amount of Postage I had put on the parcel was right she shook her head and said "yup, no problem"...

The Truth comes out:

Canada Post Offices charge postage for packages at the published Canada Post rates.

Franchise locations such as Shoppers Drug Mart can charge whatever they like.

So remember if you regularly mail packages at franchise locations (ie Shoppers Drug Mart,) you are probably paying too much. Franchise locations are found in shopping malls, drug stores and private businesses everywhere. From now on, all of my mailing will be done from a real Canada Post location.

Still perplexed by what I was told by the girl in Shoppers, I fired off an email to Canada Post for clarification. This is the reply I got from them:

Thank you for your message to Canada Post.

A postal outlet is not a federal government agency and is not owned or managed by Canada Post. For example if the postal outlet is within grocery store or pharmacy it would follow the stores working hours, therefore if the store must be closed, so will the postal outlet inside.

Only Canada Post Depots and Corporate Post Offices are obligated to follow the price of stamps and postal products that are legislated by Canada Post. Any commercial and private establishment may charge extra fees as a convenience to their customers. It is at their discretion to apply additional service fees to products that they sell. We suggest visiting a Corporate Post Office in order to avoid paying additional service charges that corner stores or other establishment may implement on their products.

Veronika Strofski
Customer Service

The substance of this complaint seems to be inaccurate: the packages mailed by the customer (although they may have contained similar items) apparently were not identical; the second one was packaged in a way that made it slightly bulkier than the first, and it therefore did not fit through the smaller mail slot that would have qualified it for a lower postage rate.

Canada Post's initial response to this matter acknowledged that inaccurate information was provided by a Canada Post representative to the customer in question but affirmed that Canada Post franchise outlets are not authorized to charge customers more than the published Canada Post rates:

Over the holidays, a customer contacted us by email to ask us why private sector partners would be allowed to charge more for the same service provided by corporate offices. The reply they received contained misinformation and we would like our customers to know the facts — rates are the same at all Canada Post establishments both corporate and private sector partner locations.

It is very important to us that the customer experience is the same no matter where you choose to shop.

In fact, the agreement that Canada Post has with its private sector partners specifies that the maximum postal rates that they can charge are the Canada Post published rates. If a postal outlet charges prices that are over the Canada Post published rates, they are in violation of their contract. You should also know that the equipment used by private sector postal outlets is programmed with Canada Post's published rates. Therefore, the rates should be the same no matter where you choose to get postal services.

We are very disappointed to hear of this experience and we are investigating the matter.

Canada Post later disclaimed the purported reply as a hoax, claiming that they had no employee named "Veronika Strofski."


Adami, Hugh.   "Canada Post on Defensive Over Anonymous E-Mail."     The Ottawa Citizen.   7 February 2010.

Rivera, Ray.   "Sending U.S. Mail from U.P.S. Stores, and Often Paying Extra."     The New York Times.   21 December 2009   (p. A24).

David Mikkelson founded the site now known as snopes.com back in 1994.