We are excited to report that on Friday August 11th, the U.S. Postal Service filed with the Postal Regulatory Commission (PRC) a request to create a new incentive for Marketing Mail (MM) and First-Class (FC) Mail. If approved, here’s how it will work and potentially impact your catalog mailings:
- The incentive will use a mail owner Fiscal Year 2023 (Oct 1st, 2022 – Sept 30th, 2023) volume to determine a base line.
- A minimum of 1 million pieces within each category of MM, or FC will be required to qualify for a MM or FC incentive.
- For mailers who exceed 1 million in 2024, but did not mail 1 million in 2023, they will have their incremental volume start at 1 million pieces, not their FY 2023 volume.
- The incentive amount is proposed at 30% of the average postage rate paid on qualifying pieces mailing in calendar year 2024 that exceed the FY23 baseline of each MM and FC. (See link to charts for more details.)
The mailer’s pay out will come in the form of three credits that can be used on future mailings beginning in July 2024 and must be used by the end of calendar year 2025. Distributions are expected in July 2024, October 2024 and either January or February of 2025. All credits may only be used for postage spend on mailings of the same class of mail in which the credits were earned.
- Mailers will be able to register their Customer Registration Identifiers (CRID) beginning in November 2023, registration will remain open until June 2024.
Eligible Marketing Mail
All commercial (including Nonprofit) flats, letters Carrier Route Flats, and Marketing Mail Packages. Retail Every Door Direct Mail (EDDM) is not included.
Eligible First Class Mail
All commercial letters, postcards and flats, but excludes single piece First-Class and First-Class Parcels.
ACMA Postal Committee Chair Deborah Damore of Enru has been kind enough to add some more pertinent details:
How the Credits Work
The credits earned are equal to the average actual per-piece price paid for all qualifying volumes, after other incentives and promotions, i.e., the total actual price paid for all qualifying pieces divided by the total volume of qualifying pieces.
Consider this example:
- Assume a mailer sends 5 million qualifying pieces in calendar year 2024 and sent 4.5 million qualifying pieces in fiscal year 2023.
- In the chart below, assume product 1 is letters, product 2 is flats, and product 3 is Marketing Mail parcels. Total 5mm pieces at an average postage rate of $.639 after all promotions and incentives had been removed. This particular mailer mailed 4.5 mm in 2023, so it would receive credit for 30% of the average postage on 500,000 pieces. (500,000 x 0.639 x 0.30 = $95,850)
- Credits will be issued in July and October of 2024 and in January or February of 2025.
- Credits can be used immediately once they are received but must be used by end of calendar 2025.
The Postal Service is estimating that approximately 17% of Marketing Mail volume will earn credits during the incentive period, and projects that the incentive will spur between $544 and $907 million in growth revenue at a cost of $163 to $272 million in credits and create a net contribution of $17 to $28 million.
Watch for future updates with technical requirements on the USPS’s PostalPro website. Deborah and the ACMA will keep members posted on other developments impacting your business.