USPS mailers may have to anti-up with an extra penny in 1998 if the recently proposed postage increase goes through. The proposed increase would be less than 1/3 the rate of inflation and would be the first stamp cost increase in over 3 years. If approved, the proposed increase should enable rates to then be held into the year 2,000 without further increase.

With some of the various classes of U.S. Mail and service costs being affected more than others, the proposal would increase USPS domestic postage rates by approximately 4.5% across the board.

The price of a "1 ounce", First Class Stamp would go up one cent to $.33 (thirty three cents). The cost to mail Commercial Magazines would go up an average of $.013 (one point three cents). The Priority Mail Flat Rate for up to 2 (two) pounds would increase $.20 (twenty cents) to $3.20.

However, the Priority Mail's rate increase would be easily justified with a new, additional benefit taking yet another stab at the USPS' "package and parcel competitors". For included in the proposal the USPS proudly introduces "Delivery Confirmation" for Parcels and Priority Mail.

The Delivery Confirmation Service will be FREE for mailers who "apply their own barcodes and access Postal Information Systems for electronic confirmation". Mailers who are still not yet capable of such electronic or internet services will be able to take advantage of a manual confirmation service for $.35 (thirty five cents) a shot.

To further rub some salt into the wounds of UPS, Fed-Ex, Airborne and all of the other private carriers, also included in the USPS proposal are several discounts and work sharing plans for Standard Mail (formerly called Third and Fourth Class Mail), as well as Periodicals (formerly called Second Class Mail).

The most intriguing item contained within the proposal made by the Governors of the Postal Service is the fact that they are requesting a special $.30 (thirty cent) pre-paid postage option for the payment of bills, the placing of orders and other general mailings used for conducting business via the U.S. Mail.

The proposed plans would work as follows; Participating companies would work closely with the USPS to develop a special format for their 30 cent pre-paid envelopes and then distribute them customers accordingly.

Customers of the companies would then be able to use the special envelopes as designated and enclose the necessary checks and/or documents to pay their bills, place orders, etc.

The USPS wants everyone to use their services to send as much mail as possible. The more U.S. mail sent, the more revenue earned. Similar to "stamp collecting", the pre-paid system would allow the usps to raep additional profits for all of the pre-paid envelopes which are sold with the intentions of later having absorbed delivery costs which would be avoided if the envelopes are never actually used and mailed. In addition, participating companies could also benefit several ways if the proposal goes through. They would get their money in the form of bill payments sooner, enabling them to keep moneys flowing faster and earning more interest. Depending on the service/interest charges and transactions, some customers may also save money and receive better service by getting their items received sooner.

Mail sent in the special pre-paid envelopes will most likely move faster for two reasons. First of all, the envelopes will undoubtedly have to be extremely automated and automation compatible as far as machinability, address and barcode information, etc., which will allow high-speed sorting & processing. Secondly, many of the envelopes will likely be put into the mail stream sooner by the pre-paid envelope eliminating the sender's need to acquire a stamp before sending the items.

Our team of Certified Consultants as well as most other Direct Mail Marketing Professionals will surely agree that pre-paid envelopes can in fact substantially improve response, speed delivery and improve deliverability by avoiding hand-written or incorrect addresses as well as preventing other common addressing flaws.

Quite often you see, with all good intentions, residents and consumers set items to be mailed in regular (NOT pre-paid) envelopes on their kitchen tables, stick them up on their refrigerators, leave them by their doors, etc. as if "staging" them until they finally remember (or get a chance) to get Postage stamps for mailing them. By providing a pre-paid envelope, customers or prospects can often act more quickly and drop the items in the mail right away.

The trick to the USPS successfully pulling off this new service will be strongly dependent upon designing and maintaining control. During a rate case a few years ago the USPS considered launching a somewhat similar product/rate for businesses and consumers to use. The plan at that time was to implement a special discounted rate for customers to pay their bills via U.S. Mail, except the previous plans were written for the mailer to use a special pre-barcoded "Courtesy Reply Envelope" (or CRE). A CRE is an envelope which (out of "courtesy") provides the recipient with a reply envelope without postage attached or included. It is kind of an in-between service. CRE envelopes could be claimed to send the message "We appreciate your reply enough to provide you with an envelope, but not enough to pay the postage too". Similar to the new proposal, the delivery point barcode on the lower right corner of each CRE represented the address of the company who initially provided the envelope (utility company, catalog/retailer, etc.) If approved, the customer would have been able to apply the reduced Business CRE Postage Rate via postage stamp or meter impression. The problem feared was that the population would often abuse or not understand when they could, versus when they couldn't use/apply the reduced rates.

If residential customers had to remember that the postage amount when paying their bills was different than the rate they used to send personal letters and cards, there would be great chaos, confusion and tons of mail submitted each day with the incorrect postage applied. In addition, it was unfortunate, yet rightfully expected that substantial numbers of people would have constantly been looking for ways to cheat and abuse the system.

The reason that I bring this up is because the previous plan failed to get approved for some of the same reasons which could in fact become obstacles for the newly proposed pre-paid business mail discount rate to overcome too.

In order for this newly proposed discount rate to work, The USPS will need to design, print and market the pre-paid envelopes in such a way that it is extremely clear that the envelopes may ONLY be used to mail back to the company who initially provided the envelopes as was designed.

In order to work well, the plan must have built in controls, markings, endorsements and penalties which prevent people from using the envelopes for purposes other than what they are truly intended for. People must be prevented from using the envelopes for other purposes by covering the alpha-numeric address on the pre-paid envelope with address labels containing a different address. Otherwise, many people could attempt to wrongly mail the envelopes to relatives, friends, even other companies. Needless to say, this could cause economic and logistical disasters to the USPS, the companies buying and providing the envelopes and the customers.

Part of what will cause this is the fact that even though someone may cover an address with another, they would rarely know enough to cover up the barcode on the bottom of the envelope. When this happens, the high-speed equipment sorting and routing the mail through the USPS P&D (Processing & Distribution) Facilities disregard the alpha-numeric addresses on envelopes which contain postnet barcodes and they send/route the pieces to the addresses represented within the barcode. So if someone applies an address label over the correctly intended address without changing/covering the barcode, guess what... The letter to their aunt in New Jersey may go to their local utility company instead (thanks to the utility companies barcode being on the piece)!

This is primarily driven and aggrevated by the fact that the high majority of the general public don't have a clue about mail and how it works. Many people can't even begin to imagine how much work, planning, automation and computer services are involved in the daily delivery and distribution processes of mail. They assume that mail delivery & distribution is "automatic". It is almost as though people feel that there is a magic wand that someone in the postal service waives and "poof" the mail is delivered. With such widespread and incredible lack of understanding and respect for the Postal System and it's proper rules, it is hard to expect the rules to be followed by the public. Our team of Certified Consultants has often found this serious lack of education to be a major roadblock for companies who desire to save money and improve the delivery of their mail. We are continually shooting Postal Operations training videos and conducting custom postal facility tours and educational seminars to help mailers to see, understand and more efficiently utilize their postal service. You can't play by the rules and maximize your effectiveness of the mail delivery system if you don't understand it.

With this in mind, it will be very interesting to see if this proposed item flies. Existing systems with a few adjustments surely make it technologically possible. We have given the process some detailed thought and their are actually many ways which the USPS could use in order to make it a working reality. In short, this is a perfect application for the Electric Stamp/Electric Postmark, Electronic Manifesting Systems, etc.

It would be very rewarding and interesting to be part of the team that designs the actual automated mailpiece format and templates as well as the marketing and training materials which would be necessary to make this a success.

While Mr. Runyon (Marvin Runyon, Postmaster General) and the USPS aggressively continues it's on-going challenge to become more like a private business, win greater market share, increase revenues and offer even more customer-friendly services, this small example offers them an excellent opportunity to truly show the world their vision, planning and capabilities.