High-volume mailers have long acknowledged two factors that affect their mailstream budgets: the planned scheduled rate increases resulting from rate cases and the regulatory changes designed to qualify mail receiving U.S. Postal Service work-sharing discounts.
Delivery point validation (DPV), a regulatory change implemented Aug. 1, can affect the amount of mail that is eligible for work-sharing discounts and as a result, affect their total postage spend. In fact, many in the postal industry are calling DPV the second rate increase for 2007.
So, what is DPV, how is it affecting mailers, and what can they do to keep their mailstream costs down?
DPV is a database compiled by the USPS with every single known mail delivery point in the U.S. (There are more than 165 million delivery points in the country.) The USPS makes DPV available through licensed coding accuracy support system/machine accuracy support system (CASS/MASS) vendors and service providers.
DPV matches CASS/MASS cleansed addresses to a file of every known delivery point for an exact match. It is a stricter matching logic than CASS/MASS certified software.
Prior to Aug. 1, to qualify for USPS automation pre-sort rates, mailers used CASS/MASS certified zip+4 software, which assigned a zip+4 barcode based on matching a street address range to the USPS address file. It did not, however, verify that an actual address is one recognized by the USPS as an actual delivery point. So an address could match a valid street number range without being an actual USPS deliverable address.
For example: take 123 Wisteria Lane. 123 is the primary address. When this number is submitted to CASS ZIP+4, it matches the USPS record that has a primary number range of 121-129, and is assigned a 4+zip code associated with this range. But CASS/MASS does not validate if 123 Wisteria Lane actually exists.
With DPV, it will take the CASS-approved address and validate if 123 is an actual deliverable address for the USPS.
The DPV Regulation Change
As a way to decrease undeliverable as addressed (UAA) mail by 50% by 2010, the USPS has changed its requirements for all automation-based presorted mail. This applies to all classes of mail. As of Aug. 1, automation presort discounted mail must be processed through CASS/MASS certified zip+4 software that includes DPV primary number (street number) confirmation as a standard process.
With this new DPV requirement, if the primary number (e.g. 123 Wisteria Lane) actually exists, it will retain the ZIP+4 code and an 11-digit barcode will be applied to the mail piece by the software or sorter.
If the new CASS/MASS software with DPV does not validate the primary street number, only a 5-digit zip barcode is applied to the piece, and the best presort rate category that this mail piece can qualify for is a non-automation rate.
How does this affect postal costs
Industry experts estimate that 1% to 3% of the mail that currently qualifies for automation presort discounts will not longer qualify under the new DPV requirement (results will vary from mailer to mailer based on how clean their lists are.) This can result in increases to a business’ total postage costs from .5% to 1%.
- a First Class letter originally qualified for the 3-digit automation rate ($0.334). Yet, because the house number does not match DPV data, this letter now is posted at the non-automation rate of $0.373. The impact of DPV is an increase of $0.039 for this mail piece.
- An in-country periodical qualifies for the 5-digit automation letter rate of $0.044. But the house number does not match DPV data and as such, the cost of mailing the publication is $0.098, the non-automation rate. The impact of DPV is an increase of $0.054 for this mail piece.
For high-volume mailers, these increases can add up to millions more in postage costs each year.
But mailers can avoid paying more for postage by taking control of their address data. By cleansing addresses now, mailers can avoid postage increases related to DPV while improving communications with their customers and mitigating any potential future budget increases caused by stricter USPS addressing rules.
Some best practices for mitigating the financial impact of DPV include:
- Cleansing addresses to the delivery point during data entry. This is the best way of getting a correct address. Verify the address while there still are other means of communicating with the customer. CASS and DPV software can be deployed interactively so that addresses can be validated before they even enter the system.
- Process addresses through multiple CASS engines. Different vendors have different matching logic in their CASS engines. Take advantage of the strengths of many vendors instead of just one. Process non-matches from one vendor’s CASS engine through another in order to uplift addresses.
- Reviewing your CASS reports in detail. CASS reports identify what is in accurate about an address so that it can be corrected. Use analytical data available to you to find the causes of incorrect addresses.
- Use Third Party Data . Third party data providers use information from items such as warranty cards and magazine subscriptions to generate addresses for company names.
- Hire a consultant. There are industry experts who use proven methodologies to determine the root causes of address problems.
Taking a proactive approach to enterprise address management will save time and money. There are many solutions available today that cleanse and maintain address databases to mitigate future problems. The difference in how a business deploys and uses these solutions can make a huge difference in keeping postage costs down, now and in the future.
Jeff Stangle is director of solutions development for Pitney Bowes Management Services.