Game Changer: How to Make Sense of the Intelligent Mail Barcode

Nearly 60% of the 212 billion mail pieces the U.S. Postal Service processes annually is direct mail. But with countless millions of people moving each year, just try to imagine how much marketing material gets returned as undeliverable due to address changes alone.

To limit the amount of undeliverable mail, the USPS is getting creative. Two upcoming initiatives will give mailers new incentives to keep their files current.

• Beginning this month, mailers will have to verify that their address changes are up to date within 95 days of a mailing. The previous guideline was 180 days.

• And next May, the Intelligent Mail barcode is expected to replace the existing Postnet and Planet barcodes on all domestic mail. The USPS will require use of this barcode to qualify for automation discounts.

Intelligent Mail is the result of the postal service's efforts “to develop more robust codes capable of encoding more information, while minimizing the space used” on a mail piece. Less talked about is how the barcode will be a powerful tool for the USPS. More on that later.

Intelligent Mail will improve the monitoring and quality of mail service, the USPS will have more accountability, and mailers will enjoy these benefits:

• Greater overall data capacity than existing barcodes. More digits will be available for DMers' use, allowing them to identify up to 1 billion pieces per drop.

• More accurate and detailed information about mailings. Marketers will have ready access to information about anticipated delivery dates, where each mail piece is en route to its destination, and which pieces have been rerouted.

• Increased space on mail pieces thanks to the elimination of multiple barcodes.

• The ability to participate in several USPS programs with a single barcode.

In short, Intelligent Mail should help DMers keep closer tabs on their mail and on the USPS. But the new barcode will let the postal service do the same thing: It'll know if a marketer is using an updated mailing list, where in the past the USPS required written documentation to verify list accuracy.

Intelligent Mail processes that information by scanning the piece's address and determining if it's correct. If an address is flagged as changed or undeliverable, the information is stored in a USPS database along with the mailer's ID, allowing the postal service to follow up with marketers about their address-correction processing.

Fewer than 10% of direct marketers already use Intelligent Mail, most of them large financial institutions. So come next May many companies may face new obstacles created by the transition. Although the USPS will continue to grant automation discounts for Postnet barcodes through May 2010, it's widely believed that the discount for Intelligent Mail will be higher.

Two service options will be offered.

• Basic. Will not require the DMer to uniquely number all mail pieces.

• Full service. All pieces in the mailing will need a unique sequence number which will be reflected in the Intelligent Mail barcode.

The full-service option will offer deeper automation discounts and free “start the clock” data to let marketers know when the USPS receives their mailings. In return DMers will have to submit all documentation electronically. (It's too early to say what the new pricing will be.)

Intelligent Mail will be mandated on automation mail and automation discounts will be available to DMers that presort. However, those using a mailing house with Coding Accuracy Support System (CASS)-certified software that can handle the additional data requirements probably will see the best discounts.

Potential USPS penalties for noncompliance and outdated address files are bound to come into play with Intelligent Mail. Without it marketers effectively operated on the honor system. But Intelligent Mail identifies lists that aren't fully vetted. Now the postal service will be able to enforce mailers' compliance, whereas before there virtually was no way to do this. With Intelligent Mail doubling as a whistle-blower, the USPS almost certainly will take advantage of such functionality.

There's also the not-so-minor detail that everyone is aware of: The USPS has no competition for letter and postcard-size mail. And so mailers will have to follow all the rules and regulations to obtain discounted automation rates or face the consequences when — not if — the postal service learns they're not.

No question about it, the switch to Intelligent Mail will afford mailers great sorting and tracking benefits plus cost savings. But ultimately the latest technology from the postal service may cut both ways.

For its part, the postal service will have a chance to recapture revenue lost to rerouted and undeliverable mailt.

What kind of action will the USPS take to enforce compliance? We don't know, but marketers can count on one thing: It'll be more than just a slap on the wrist.

For the latest postal news, visit http://directmag.com/legal/postal/.

JOHN STEIB is DM manager at Zillner Marketing Communications, Lenexa, KS.