USPS Publishes Final Rule on First-Class Versus Standard

The U.S. Postal Service published a final rule in the Federal Register yesterday that clarifies the circumstances in which mail containing personal information may be eligible for Standard mail, rather than First-Class rates.

The published rule is part of a three-part strategy by the postal service “to deal with the issue of consistency in the way we apply our mailing standards,” said Steve Kearney, vice president of pricing and classification at the USPS. The strategy involves redesigning the postal service's Pricing and Classification unit, clarifying mailing standards (including the rule in the Federal Register) and communicating its plan to customers.

The rule, which takes effect June 1, 2005, modifies a proposed rule that appeared in the Federal Register in April. In general, that proposal called for an exclusive-purpose test in which personal information would be permitted at Standard mail rates only when advertising or solicitation is the exclusive purpose of the piece and personal information is included solely to increase the effectiveness of the ad or solicitation.

Kearney said the postal service received 402 written comments in response to the proposed rule, including 350 nonprofit organizations as well as private individuals, voting and election officials, financial industry representatives, those concerned with privacy issues and one congressional comment. The top concern was that a literal application of the proposed rule might disqualify nonprofit mail consisting of program-related content as well as a solicitation for donation.

The USPS said it agreed with these concerns and modified the final rule to say following: “The exclusive reason for inclusion of all the personal information is to support the advertising or solicitation in the mail piece.”

“Nonprofit groups should be more comfortable now that we've answered their major concern, and some for-profit mailers also raised this issue,” Kearney said.

Neal Denton, executive director of the Alliance of Nonprofit Mailers, said the new language addresses his constituency's concerns “in a substantial way, but there are still a lot of questions to be to answered.”

Kearney said the postal service doesn't “expect significant change for mailers who have been mailing Standard mail for a long time.”

The USPS said the objectives of the new rule generally are to:

* Clarify when the inclusion of personal information may be a part of Standard mail.

* Clearly describe content and service features of First-Class mail and Standard.

* Make it easier for customers and employees to consistently interpret and apply the standards.

“We think personalizing and customizing Standard mail is a great thing, and that's why we have been encouraging it since the early 1980s,” Kearney said, adding that while the USPS made rulings on a case-by-case basis, officials thought it was time to “reflect in our basic standards that describe First-Class mail and Standard mail these distinctions that have built up over the years.”

While Kearney said the rule's purpose is not to change the practice of personalizing Standard mail, the USPS does want it discourage the practice of traditional First-Class mail moving into Standard mail.

Also regarding the issue of standards, the USPS proposed a rule in the Federal Register yesterday that would require mailers to put an endorsement requesting forwarding or return on certain mail pieces containing checks sent at Standard rates. In addition, Kearney said the USPS will introduce a new version of the USPS' Domestic Mail Manual next year in which standards will be organized by shape and mail class.

As for redesigning the Pricing and Classification unit, Kearney said the USPS will establish a new facility to be known as the Pricing and Classification Service Center. It will consolidate in one location the functions performed by the Rates and Classification Service Centers and the Non-Profit Service Center and provide additional services not currently offered at those facilities. The facility will open on Nov. 27.

Kearney said the new business model will allow for pre-production/pre-mailing rulings on mail pieces and single points of contact.

The PCSC will be in New York City. Numerous customers in the New York area, particularly publishers, meet regularly with RCSC personnel, Kearney said, and placing it in New York allows that practice to continue.

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