Cleanup Time

Mailers are about to get socked with another postal increase. But this time the hit will depend on how accurate their lists are and how much they're willing to pay to get them that way.

In August, like it or not, the U.S. Postal Service will release CASS Cycle L, the latest version of its Coding Accuracy Support Software. It will require, among other things, that mailing lists have numbered addresses to qualify for ZIP+4 discounts, according to Bob Gillen, industry strategist at Acxiom.

CASS software standardizes addresses to meet USPS criteria. Under the current CASS Cycle K, mailing lists only need to have the correct block number for an address — say, 301-399 — to get the ZIP+4 discounts.

But now they'll have to include the full street address. And they'll need to use the USPS' Delivery Point Validation system that makes sure numbered addresses actually exist.

Why is the USPS bothering? It hopes to reduce undeliverable mail, now estimated at 9 billion pieces a year. But it also wants to make sure that more mail can be processed by machine and isn't dependent on the local letter carrier's knowledge of his route, says spokeswoman Patricia Licata.

According to estimates, undeliverable addresses now account for anywhere from 3% to 10% of an average company's list. And it will take money to correct them.

“It's going to cost all mailers more, either for having to pay higher rates or to get their files cleaned up,” says William Crotty, vice president of operations for Quebecor World Mailing List Technologies.

Case in point: A financial services giant like Capital One. Mailers on that level can send 1.5 billion pieces a year. Under CASS Cycle L, such a firm could have anywhere from from 1% to 6% of its pieces disqualified from Zip +4 discounts, the average being 3%. “Do the math: Three percent of 1.2 billion times 6 cents,” Gillen says. “It's a $2.2 million problem for a mega-mailer like that.”

For a cataloger that sends out 6 million pieces a year, that cost would be $11,000 annually, “but smaller mailers tend to have a lot more bad addresses,” he adds.

“Upgrading to CASS Cycle L can cost first class mailers 4 cents to 6 cents more per piece but standard mailers only a couple of cents,” says Kevin Conti, director of mailing solutions for Pitney Bowes Group 1 Software. “But for [a business] that mails billions of pieces, even a fraction of a percent loss of postal discounts is a huge issue.”

Another big issue is the accuracy of data on outside lists. “Rented lists don't always have good hygiene,” Crotty argues.

Vendors like Pitney Bowes and Acxiom offer products to help mailers meet the higher standards of CASS Cycle L. But that's not the only problem.

What happens when mailers see value in these seemingly useless addresses?

“Analysis may show that such records, although imperfect, still generate responses,” Gillen says. So they're going to want to mail them anyway.”

What's more, misaddressed mail often reaches recipients because local letter carriers are likely to know their exact locations.

Right now, the USPS “is well on its way to saving $300 million of the cost” of undeliverable mail, says Licata. And it wants more. Moving right through the alphabet, the USPS plans to unveil CASS Cycle M in August 2008. This version will mandate that lists of business mail recipients have the right suite numbers in office buildings to qualify for discounts, says USPS program manager Ed Wanta.

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