The United States Postal Service (USPS) has filed two proposals with the Postal Regulatory Commission (PRC). If approved, the first would offer credits for mailers sending out more than 1 million pieces during calendar year 2024. The second would establish financial incentives to individual high-volume mailers via one-off negotiated service agreements.
Mailers will be required to enroll in each program. Under both proposals, mailers would be eligible for postage credits equivalent to 30% of the amount by which their calendar 2024 volumes exceed 2023 volumes, provided total mail volume in 2024 is more than one million pieces.
If the programs are approved, enrollment will eventually be facilitated through the USPS Business Customer Gateway (https://bit.ly/3OVVjH7). Enrollment would be expected to start in November 2023. At deadline, the Postal Regulatory Commission (https://www.prc.gov/) had not yet posted a schedule for any part of the approval process, including a question and comment period.
First Class Mail and Marketing Mail Growth Incentives would be more readily accessible to all mailers. The USPS would use its 2023 fiscal year, which runs between October 1, 2022 and September 30, 2023, to establish a mailer’s baseline volume of First Class Mail and/or Marketing Mail. If the baseline volume is less than 1 million pieces, the baseline would be set at 1 million pieces.
During the calendar year 2024 (January 1, 2024 through December 31, 2024), mailers would track their total volumes. Each mail class would be evaluated independently. Mailers could not combine the two in an effort to exceed the one million piece baseline.
Eligible Marketing Mail pieces would include Marketing Mail letters, flats and parcels. Eligible First Class mail pieces would include commercial First Class Mail letters and flats. First Class Mail Parcels and single-piece First Class mail items would not be part of the volume calculations, according to an update from the Alliance of Nonprofit Mailers in Washington, D.C.
Once baseline mail volumes are established, mailers would then receive a 30% credit for the amount in excess of their established baseline during calendar year 2024. Mailers would have until December 31, 2025 to use their credits, provided their mailing volume during calendar year 2025 exceeds that of 2024. The USPS would check mail volumes during 2024 at the six-, nine- and 12-month marks, and grant credits when the fiscal year 2023 volume had been surpassed.
Alliance of Nonprofit Mailers Executive Director Stephen Kearney did not have an estimate as to how many nonprofits might be eligible for the program. But he nonetheless gave tentative approval to the proposal’s goal of retaining or increasing mail volume, which he noted had dropped from 15 billion pieces annually a few years ago to around 12 or 13 billion recently.
“[I]t would be a much better approach simply not to raise the list prices as much as they have been every six months,” Kearney told The NonProfit Times.
The second proposal involves a Negotiated Service Agreement (NSA) with mailer Publisher’s Clearing House (PCH). Under that proposal, PCH will be allowed to mail 1 million pieces of USPS Marketing Mail rate letters at cost, but only to dormant prospecting customer addresses.
The USPS would benefit from this arrangement as a result of “multiplier effect” volume, in which an additional two million pieces of responses, billing and other communication at non-discounted rates would be generated by the initial mailing. If the multiplier effect results are deemed acceptable, the agreement authorizes a second prospect mailing at the same rates as the first, six months after the initial mailing.
According to Kearney, PCH would be required to make an additional payment to the USPS if the multiplier effect mail volumes do not reach acceptable levels.
If the PCH program is approved, the USPS would be required to make similar programs available for other mailers. “For a nonprofit, the initial mailing might be Marketing Mail, or it could be First Class Mail,” Kearney said. “The multiplier effect [mail volume could include] a donation coming back through First Class Mail or a subscription to a magazine that’s mailed to them every month for the next year.”
The proposal submitted to the PRC is available here: https://bit.ly/3sdxtOk Further information on the requirements for the First-Class Mail and Marketing Growth Incentives will eventually be available on PostalPro, the USPS’s commercial information site (https://postalpro.usps.com/).
