Summer Postage Sale – well, sort of a sale, no, more like a small rebate

To those that are excited about the impending summer postage sale, there are a few details you need to know, first, did you receive a letter from the USPS recently?
Here is what it looks like: summer-sale-electronic-letter

Here are the details:
The USPS has made it official (almost) that they are going forward with the proposed ‘Summer Sale’ event. The PRC must still weigh in with their decision, which is expected in late May, to make this program official. This program would provide a 30% postage credit on mailings submitted between July 1, 2009 and September 30, 2009. This incentive program is designed to increase mailing activity during the usually dormant summer months, when the USPS has their most excess capacity available.

Unlike most sales however, there are a multitude of qualifiers that apply to the Summer Sale.

Who and what qualifies?
For the most part, the USPS has already determined what mailers qualify. Letters were sent out on 5/7/09 to approximately 3,200 mailers whom they determined will be eligible for this program by utilizing the mail volume data that exists within their internal system.

1. This program only applies to Presorted Standard letters and flats.
2. The next qualifier is that you must have mailed a minimum of 1,000,000 pieces during the time period of October 1, 2007 and March 31, 2008. Total volume is calculated by mailer, so even if you utilize multiple permits, your total volume will be calculated across all permits that are associated to your organization. This also applies to “Ghost Numbers”, which are created if your mail is sent through a Mail Service Provider. If you feel you are eligible, but have not received a letter, then you can request a contact by emailing your information to summersale@usps.gov.

If you have met the criteria above, you are ready to begin to calculate the ‘Sale’ portion of the program. The 30% postage credit will be given only on the number of mail pieces that exceed your mailing threshold for the time period of July 1, 2009 to September 30, 2009. The caveat to this all is that your mail volume in October must not fall below your mailing threshold for that month. If this occurs; the total credit accrued from mailings between 7/1/09 to 9/30/09 will be deducted by the amount of pieces that fell below the threshold in October and that will be the final credit. The credit will be issued at some point in December of 2009 once the USPS has completed the above calculations.

How to calculate your potential savings:
Below is an example of how to calculate the savings that you as a mailer may receive through this program. Listed in this example is the all important Threshold, which will be the key to planning your mailings to take advantage of this program.

1. Base volume (7/1/08 – 9/30/08): 500,000 pieces

2. Trend:

a. Volume 10/1/08 – 3/31/09 = 1,800,000 pieces

b. Volume 10/1/07 – 3/31/08 = 2,000,000 pieces

c. a/b = (1,800,000 / 2,000,000) = .90 or 90%

3. Base x trend = Threshold:
500,000 x .90 = 450,000

4. Rebate = (Actual volume – threshold) x (actual postage cost / actual volume) x 30%

a. Actual volume for 7/1/09 – 9/30/09 – threshold =
475,000 – 450,000 = 25,000 pieces

b. Actual postage cost / actual volume =
$103,075 / 475,000 = $0.217

c. Rebate =
25,000 x $0.217 x .3 = $1627.50

The October Effect:
It is important to keep your mailing volume for October in mind when factoring the potential savings. If your volume falls below the calculated threshold, then your overall credit will be impacted. Below is an example of how to calculate this effect.

a. October 2008 volume x trend (in #2 above) = October threshold:
300,000 x .90 = 270,000 pieces

b. If October 2009 (260,000 pieces) < October threshold:
Threshold – actual = adjustment
270,000 – 260,000 = 10,000

Rebate adjustment

a. Actual volume – summer sale threshold – rebate adjustment:
475,000 – 450,000 – 10,000 = 15,000

b. New rebate:
15,000 x $.217 x .3 = $976.50

For those of you that have received a letter; be sure to certify the volume that the USPS has provided to you since this will be a binding once you have agreed to enroll in the program. Also be sure to have your response in by August 1st, 2009.
This program is a great way to potentially reach more customers at a lower cost and therefore enhance your business’ ROI. The system is not perfect, but it is a step in the right direction for the USPS to utilize their new found pricing freedom to help mailers.

From the Federal Register today:
Federal Register Notices

DATE: Pending publication in the Federal Register.

Standard Mail Volume Incentive Program (aka Summer Sale)

AGENCY: Postal Serviceâ„¢.

ACTION: Final rule.

SUMMARY:
The Postal Service is revising Mailing Standards of the United States Postal Service, Domestic Mail Manual (DMM®), to add section 709.2 which introduces new standards for a special volume incentive program for mailers of Standard Mail® letters and flats with mail volume exceeding their individual USPS™-determined threshold levels. The program period will be from July 1, 2009 through September 30, 2009.

EFFECTIVE DATE: July 1, 2009.

FOR FURTHER INFORMATION CONTACT: Kevin Gunther at 202-268-7208.

SUPPLEMENTARY INFORMATION:
The Postal Service is implementing a volume incentive program for qualified high-volume mailers of commercial or Nonprofit Standard Mail letters and flats, for volume mailed between July 1, 2009 and September 30, 2009, above their USPS-determined threshold level. This program encourages mailers to provide new volume and to take advantage of our current excess capacity to process and deliver additional volume.

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USPS Summer Sale – Save 30%!!!!

May 1, 2009
DMM Advisory
Pricing and Classification — keeping you informed about the prices and mailing standards of the United States Postal Service

Summer Sale
Today we filed a notice with the Postal Regulatory Commission for a Summer Sale. The Sale will provide a 30 percent reduction in postage for qualifying Standard Mail customers mailing letters and flats. The Summer Sale will run from July 1 through September 30, 2009.

The Summer Sale offer is subject to review by the Commission for up to 45 days following May 1.

The Domestic Mail Manual (DMM) is available on Postal Explorer (pe.usps.com). To subscribe to the DMM Advisory, send an e-mail to dmmadvisory@usps.com. Simply indicate “subscribe” in the subject line

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