June 21, 2001 12:00 PM PDT

Stamps.com sticks to price increase

Stamps.com is doubling its fees starting next month, saying the company is just another e-tailer that can't afford to bankroll any more "free rides."

Customers that opened accounts with Stamps.com prior to last December have paid $1.99 to download postage via the company's Web site, but starting in July, the fee rises to $4.49 per month, said Dave Dryer, Stamps.com director of marketing.

Stamps.com began charging new customers the $4.49 fee in December. Dryer said the economic times have forced the company to charge all its customers the higher rate.

"We had to look at the value of the service and we concluded that this was a fair price," Dryer said. "The Internet is changing. Companies are finding that you can't give away products anymore or at below cost."

The Net was once ballyhooed for its bargains and merchants that dangled freebies or cut-rate deals in hopes of drawing visitors to their Web stores. But with the downturn, many companies have started to charge new fees, such as BlueLight.com, AuctionWatch.com and FreeEdgar.

Stamps.com provides customers software that allows them to download postage over the Net and then print it out on their home printers. Santa Monica, Calif.-based Stamps.com says its service is much less expensive and more convenient than a postage meter and zeroes in on attracting small-business owners.

The rate increase, however, has angered some of Stamps.com's customers who use the service for nonbusiness use. Marshal Perlman, of Minneapolis, Minn., said that the rate hike will discourage customers who spend less than $50 a month on postage.

Death of the free Web "As little as I use the service, the price increase means it's not worth using anymore," Perlman told CNET News.com on Thursday. "I like the service. It's convenient but not at $5 a month."

Dryer said that he expects some customers to be disappointed by the price Increase, but he points to the fact that times are forcing companies to focus on profits.


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