USPS Tests Summer Postage Discount For High-Volume Mailers

The United States Postal Service will likely implement temporary postage discounts for high-volume mailers who schedule drops between June 15 and Sept. 15. While the details of the program are still being worked out, discounts are expected to be between 20% and 30%.

If the program is implemented, discount levels will be based on mailers’ meeting individually calculated levels based on the volume of mail they sent out between June 15 and Sept. 15, 2008. Because of the manpower needed to calculate each level and discount, the sales may apply to only the 4,000 largest Standard Mail class users, according to a Direct Marketing Association (DMA) statement speculating on the discount program.

“The Postal Service is always looking for ways to use our pricing flexibility to improve business, and the current economic climate makes that more important than ever,” USPS spokesman Michael P. Woods told Direct Newsline.

Woods continued, “Promotional pricing is one possibility, an idea that would need to be reviewed by the Postal Regulatory Commission. As we move forward with specific pricing promotions, and other business incentives, we'll announce them to the industry and the media.”

“The USPS talked to quite a few mailers in trying to get things around in making a summer sale and they’d like us to get word out,” Jerry Cerasale, senior vice president of government affairs at the DMA told Direct Newsline, Cerasale added that the USPS is planning to look at what mailers mailed last summer and “if you grow the volume above what you mailed last year, all the extra volume will get a 20% to 30% discount.”

To be sure, the program is not set in stone. According to Cerasale, the idea has to go be approved by the Postal Regulatory Commission. Cerasale offered a cautionary note: Since this proposal is a essentially a rate reduction, he said, there is a chance it may fall below the rate caps and take more than 45 days to approve.

The DMA expects a detailed proposal to be submitted within the next three weeks, according to a statement.

If it does go through as currently on the table, mailers that have reduced their volume during the first two quarters of the Postal Service’s fiscal 2009 year may have their levels needed to quality for discounts reduced as well, according to the DMA. The Postal Service’s fiscal year began on Oct. 1, 2008.

“The rationale is to try to grow volume. This is a stimulus –a way to try to do stimulus. Also, this is the slow season,” Cerasale said. “[The USPS] is trying to see if it can get more volume in there. It’s a way to try and shift the peak as well.”

According to Cerasale, the Postal Service has never tried a rate reduction like this before.

“I think it’s a good innovative idea and it’s not restricted to flats-it’s open to all standard mailers, not just flat mailers [catalogers],” said Gene Del Polito, president of the Association for Postal Commerce.

Del Polito added that the program would probably bring the USPS more volume during what has traditionally been a slow period.

The DMA has further requested that the program, if approved, be repeated during summer 2010. Doing so would allow mailers a full year to plan, and would thereby give the Postal Service a chance to see the full impact of the program.