To counteract its declining revenues, the U.S. Postal Service is rolling out incentives to certain organizations that increase the number of items they mail.
Postal officials are reportedly working on a "Summer Sale" program to encourage businesses and non-profit groups to send more direct mail, catalogs, and other Standard-class mail this summer. Sources say it would offer rebates of 20% to 30% for mailers that increase their Standard mail during July, August, and September of this year.
The Postal Service will reportedly file the Summer Sale proposal with the Postal Regulatory Commission this month. The PRC would then have up to 45 days to rule on the proposal.
The program reportedly grew out of discussions between Postmaster General Jack Potter and CEOs of printing and paper companies about how to increase USPS's volumes during the off-peak summer months. It would apparently be more politically acceptable than Potter's other idea for countering low summer volumes -- temporarily reducing deliveries to five days a week.
Details of another volume-based discount, the Saturation Mail Incentive Program, were released by the Postal Service this week. That will provide a rebate of 2.2 to 4.0 cents per piece only on incremental business during the 12-month period beginning May 11, 2009. Intelisent's Postal Affairs Blog has posted a fact sheet with the details. (Don't bother trying to find this same information via usps.com.)
Some will question how the Postal Service can offer discounts when it is losing money. But that line of thinking overlooks the fact that much of the Postal Service's costs do not vary much with volume. For example, a letter carrier doesn't take nine times longer to deliver nine pieces to an address than to deliver a single piece.
USPS's incremental costs for additional catalogs or presorted letters is much lower than the postage on those catalogs, especially during the slow summer months. Shelling out rebates for incremental off-peak business is somewhat akin to money-losing airlines offering last-minute discounts to fill empty seats.
Don't expect any special discounts for Periodicals-class postage, which is used to mail most magazines and newspapers, because of complaints that the class is not covering its costs. But some publishers would be able to receive rebates on such Standard-class mailings as subscription solicitations and free newspapers.