Order Authorizing Postage Summer Sale Hints At Debate Areas
The Postal Regulatory Commission ( PRC) has issued its final order authorizing temporary postage discounts for increased incremental standard mail volume during the summer. While individual discounts vary, high-volume mailers can expect a 30% rebate for excess volume mailed during the summer, provided they don’t simply move fall mailings into the sale period.
In addition to outlining the discount structure, the order – officially titled “Order Approving Standard Mail Volume Incentive Pricing Program” – hints at some of the controversy and concerns interested parties brought to the PRC.
For instance, the document covers a Chairman’s Information Request regarding cost analyses and assurances that the temporary pricing structure won’t result in mailers switching first-class mailings to standard class, among other concerns.
But the document also gives insight into the PRC’s decision to approve the test. High among its concerns was an acknowledgement of unused capacity, and the Postal Service’s “inability to rapidly adjust work hours and building capacity”.
According to the PRC, the program will cost $977,000, a figure that includes paying up to six full-time employees for four months at $300,000, up to 10 part-time employees for four months at $250,000 and up to four contract analysts for four months at $400,000. It also allocates $7,000 for Web development and $20,000 for invitation letters to eligible customers.
The PRC’s order addressed concerns from smaller-volume mailers about their exclusion from the program. According to the PRC, the administrative costs of including mailers who would send out less than 1 million pieces during the sale period would be approximately $20 million, and would exceed the expected $17.2 million in revenue.
The PRC also noted that it excluded first-class advertising mail from the program due to its inability to distinguish first-class advertising mail from other first-class mail.
The initial proposal generated 23 formal comments, the PRC said, including thoughts from the Direct Marketing Association, the Mail Order Association of America, the American Catalog Mailers Association, Quad Graphics, Bank of America, Valpak Direct Marketing Systems, Pitney Bowes and others. The PRC also received nearly 300 letters, including several urging the Postal Service to lower the participation threshold.
The full order is available on the Postal Regulatory Commission’s Web site (http://www.prc.gov).
