Stamps.com, Zazzle lodge complaints against proposed USPS rules for computer-generated stamps

By Bill McAllister, Washington Correspondent

Two of the largest makers of computer-generated postage have told the United States Postal Service that proposed rules for what images can be allowed on their products are a mistake and could harm their sales.

Both Stamps.com and Zazzle Inc. offered their written reservations in response to the USPS’s Jan. 5 notice in the Federal Register calling for additional rules on a product initially approved in 2004.

The draft rules would prohibit any reference to what USPS calls “customized postage products as ‘stamps’ or make any other representations tending to imply that customized postage products are related in any way to official U.S. postage stamps or to any aspect of  the Postal Service philatelic program.”

If adopted, Stamps.com said a new provision to separate what the Postal Service calls “customized postage products” from its postage stamps could force it to change the company’s name.

“Our company name, legally called Stamps.com, would be impermissible” under the regulation, it said.

So would their legally trademarked “Photo Stamps,” added the El Segundo, Calif., company.

Zazzle, based in Redwood City, Calif., said it feared the proposal “will create broad restrictions on content, will be onerous to comply with and could have unintended consequences.”

It urged the USPS to put the issue “on hold” until the makers of such postage and the Postal Service can “meet in person” over the issue.

Actually, the Trump White House might have already done just that.

A Jan. 20 order by the new president’s chief of staff has placed a hold on all proposed federal rule making, a postal lawyer said.

That means there is no set time for when the Postal Service will be able to act on the proposal.

In their comments, both companies offered examples of the images the new rules might prohibit.

Stamps.com said the rules would have stopped the USPS from issuing its 1976 sheet of State Flags stamps because the Oklahoma state flag shows an Indian peace pipe.

Tobacco images are to be banned under the new rules, as are weapons.

The weapon ban would bar the Wounded Warrior Project from using its logo on postage because it shows a solider carrying a rifle.

A ban on “any depiction” of political or religious content “is too broad a restriction,” Stamps.com said.

“Such a standard would rule out the Postal Service’s own religious-themed Christmas, [Hanukkah] and Eid stamps,” it said.

A postage design with a political theme is at the heart of a lawsuit pending in Washington, D.C., against the USPS.

Zazzle rejected the design by an artist hoping to use the computer-generated stamps to promote an art show, a dispute that a federal judge has said can proceed in the courts.

Zazzle did not mention that lawsuit in its comments, but Stamps.com said the proposed regulations “would weaken the Postal Service’s legal argument” in the case.

“The Postal Service has defended against such actions based on the principle that Customized Postage products are stamp products and thus constitute ‘government speech,’ not private speech,” it said.

If rules separating the computer-generated stamps from the Postal Service’s stamps are made part of the rules, then the USPS will “undercut its own defense” in court challenges, it said.

Both Stamps.com and Zazzle also argue that their products should be eligible to become forever stamps, good for the first-class rate regardless of future price increases.

They also say that the proposed regulations are inconsistent with other regulations governing analogous postal products, such as picture permit imprints and personalized stamped envelopes.

Zazzle and Stamps.com were the only makers of computer-generated postage to comment on the regulations.

The only other organization to comment on the rules was the Alliance of Nonprofit Mailers. It complained that nonprofit mailers were not allowed to use such postage and argued their membership could be a major growth area for the computer-stamp firms.

_________________________________________________

This story was updated Feb. 22, 2017.