DMA, Postcom Fight Rate Increase for Stickies

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Three mailer groups are urging the Postal Rate Commission to dismiss a proposed rate increase for the use of repositionable notes, the Association for Postal Commerce (Postcom) said this week.


The Association for Postal Commerce, the Direct Marketing Association and the Mailing & Fulfillment Service Association filed a joint motion arguing that the U.S. Postal Service's proposal to raise rates based on the effectiveness of repositionable notes -- and not because they cost more to process -- is illegal.


Repositionable notes are commonly known as "stickies" and are referred to in postal circles as RPNs. While they often serve as useful reminders and memo notes in offices, direct mailers attach them to the outside of envelopes to try to increase response.


In the filing, the mailer groups stated that "the notion that the Postal Service should share in the perceived expected value of a higher response rate" is "unsound as a policy principle on which to establish postal rates."


Because the USPS has failed to prove it incurs additional cost with RPNs, its proposal violates provisions of the Postal Reorganization Act and decades of established USPS practice, the groups said. Also, there is no statutory justification for increasing rates based on the perceived value of a type of mail.


Mailers take risks in conducting mail campaigns, absorbing paper and printing costs in addition to postal costs, the mailer groups said. The USPS absorbs none of those risks.


"Yet it now seeks to share in the potential return," the groups stated. "On this theory, mailers should be entitled to a refund if the mail piece did not perform as expected."


Even without a rate increase, the USPS would enjoy residual benefits from higher response rates because they tend to prompt increased mail volume, the groups said.


However, the USPS countered last week with a motion of its own. It argued that postal regulations allow "the relative value to the people" of different kinds of mail to be considered when deciding on postal classifications.


For example, printed matter that is primarily editorial in nature is in a cheaper classification than advertising mail, the USPS said. In its filing, the postal service described the arguments made by the mailer groups about costs as "sheer bluster."


"The proposal is quite sound on policy grounds," the USPS said. "No mailers are required to use RPNs. Mailers who do not expect to derive value from RPNs will not apply them."


In July, the postal service asked the PRC for permission to conduct a one-year test of increased rates for RPNs. It argued that mailers have expressed willingness to pay more for RPNs.


The USPS would charge an extra 0.5 cents per piece bearing RPNs for three categories of First-Class mail including presorted, automation letters and automation flats. It would charge an extra 1.5 cents per piece bearing RPNs for Standard mail, including regular and nonprofit presorted, automation and enhanced carrier route mail.


In-county and regular periodicals also would see an added 1.5 cents per piece for RPNs.


Currently, RPNs are free but allowed only on automation-rate letter-size mail.


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