Catalogers Upbeat on USPS Mail Sale Proposal

The U.S. Postal Service on April 21 announced details of its upcoming “Summer Sale” for Standard Mailers. The plans are tentative, since the Board of Governors and Postal Regulatory Commission must approve them.

• The sale will run from July 1, 2009 through Sept. 30, 2009.

• Mailers who mailed more than1 million Standard letters and/or flats from Oct. 1, 2007 through March 31, 2008 are eligible to participate in the sale. (About 3,250 mailers account for 75% of Standard Mail volume)

• Mailers will receive a rebate of 30% on any mail volume in that period which is over the past threshold. • Mailers’ rebates will be adjusted if their October 2009 volume is less than their October 2008 mail volume.

Here’s how the USPS will determine the rebates: Oct. 1, 2008 through March 31, 2009 volume divided by Oct. 1, 2007 through March 31, 2008 volume = trend.

Trend x July 1, 2008 through Sept. 30, 2008 volume = threshold.

July 1, 2009 through Sept. 30, 2009 postage divided by July 1, 2009 through Sept. 30, 2009 volume = average postage. July 1, 2009 through Sept. 30, 2009 volume – threshold x average postage x 0.30 = unadjusted rebate.

October 2008 volume x trend minus October 2009 volume = October adjustment.

Unadjusted rebate – October adjustment x 0.30 = final rebate.

Mailers will pay full postage during the summer. After Oct. 31, 2009, the USPS will determine the rebate each mailer is due. Rebates will be credited to the mailer’s permit account before Dec. 31, 2009.

What do mailers make of the proposed mail sale? Most are upbeat, says Hamilton Davison, the executive director of the American Catalog Mailers Association.

“Some of the catalogers I have talked to that were initially concerned they could not react in time have now had the chance to speak with suppliers to better define the art of the possible right now,” Davison says. “Given the economy, the availability of supplies may not be as great an issue as originally feared.”

The proposed summer mail sale is “great progress,” says Stan Krangel, president/CEO for gifts cataloger Miles Kimball. “We can certainly take advantage of this sale to mail more than we would have otherwise.”

As an industry, “we are in a survival mode, and desperately need help to drive our business back,” Krangel says. “I am excited that the Postal Service is moving forward to find ways to grow catalogs.”

Neil Sexton, president of industrial supplies mailer Northern Safety Co., agrees: “This program is something that I am very hot on. Love it. We will be chomping at the bit to know more. We would definitely increase our summertime mailing if this option were available to us.”

Davison says some catalogers he’s talked to say even if they can’t order additional merchandise to cover deeper house file mailings, they’d use the summer sale opportunity to do more aggressive prospecting because of lower costs to build house files.

“The industry needs to get behind these efforts and support the USPS as they try new things,” he adds. “The Postal Service needs the incentive “to continue to find ways to grow our mutual business as they evolve their business model in the future.”

The USPS will by May 4 send eligible mailers letters that will provide the threshold as determined by USPS data systems. Mailers may enroll in the program on the Web on or before July 1, 2009, after they receive their eligibility letter.

The Postal Service will submit the plan to the BOG this week. The PRC is expected to receive the plan in early May and make a decision in mid-June.

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