USPS Board Accepts PRC's Decision on Discover NSA

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The Board of Governors of the U.S. Postal Service said yesterday that it has accepted the Postal Rate Commission's recommended decision for a three-year negotiated service agreement between the USPS and Discover Financial Services Inc., Redwoods, IL, a business unit of Morgan Stanley.


The PRC's decision was issued Sept. 30.


NSAs are special service and rate arrangements negotiated between the USPS and a mailer or group of mailers. Proponents say NSAs will encourage greater volume by rewarding the postal service's major customers with discounts and premium services.


Discover's NSA is based on two functional elements: address correction and a declining block rate volume discount. The company is eligible for discounts of 2.5 cents to 4.5 cents per piece if its annual First-Class bulk volume exceeds 405 million pieces. The discounts rise with volume, and they are in addition to reductions given for automated First-Class letters that are presorted by ZIP code and carrier route.


The USPS will not return undeliverable First-Class mail solicitations under the agreement. Instead, Discover would receive electronic address corrections. The fees for address corrections are waived in certain instances.


The board said the waiver of fees for address corrections begins Nov. 1. All other aspects of the agreement take effect Jan. 1, 2005.


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