GrayHair recently interviewed Adam Collinson, a widely recognized postal industry expert and Director of Address Intelligence at GrayHair. The discussion focused on the USPS’ plan to eliminate the option for Full Service mailers to request Manual Address Corrections, a topic of significant importance to mailers who emphasize their address hygiene. Collinson provided a detailed explanation, outlining its potential impact and offering advice on best navigating the situation.
Before that Q&A, let’s review Manual Address Corrections. The USPS offers several Address Correction Services to help mailers get mail delivered and maintain contact with the mail recipients. Generally, when a person moves, the USPS will forward their mail for a given amount of time (varies by mail class, type, and endorsement used). If only forwarded, the mailer will not become aware of the Change of Address unless the recipient contacts the mailer. Using one of the USPS’s Address Correction Services, mailers can choose to allow the piece to be forwarded and for a separate notice to be generated by the USPS and sent back to the mailer with the address correction information. One of these services is Manual Address Correction Notices, where the separate notice is a physical piece sent back to the mailer – known as Form 3547 (Form 3579 for periodicals). The other Address Correction Services result in electronic notifications.
So, the original piece gets forwarded to the recipient’s new address, and the mailer is notified of this and the new address. The mailer knows the original piece took a little longer to get delivered and has the new address to use in the future to avoid delays in delivery, no delivery, and/or delivery to an unintended recipient.
What is happening?
Per a Federal Register Notice, The USPS is eliminating the Service Type IDs (STIDs) for Full Service requesting Manual Address Corrections. This change will happen as of July 2023. The STIDs being eliminated are First-Class (036, 041), Marketing (037, 043), Periodicals (264, 274), Bound Printed Material (352, 466), Ballot First-Class (721), and Ballot Marketing (742).
Instead of generating a Manual Address Correction Form (3547s), the USPS will now generate Full Service ACS records. The impacted STIDs are First-Class (260, 270), Marketing (261, 271), and Bound Printed Materials (265, 351).
Why do you think the USPS is making these changes?
Some will jump right to the cost – which is a significant driver. Even with charging fees for these notices, the USPS loses money on every notice they generate. There is even evidence that some mailers are not processing these notices promptly, if at all.
I prefer to think of this another way. Manual Address Corrections are the least valuable option for mailers. They have the highest fees and the information takes longer to get back to the mailer than other options. Additionally, the mail will need to ensure they correctly capture the data from these notices before they begin processing their next mailing.
With every rate case, the fees for these notices have increased (from $0.57 in 2014 to the current $074 to the proposed $0.78 for July 2023, an average 3.5% annual increase). I see that as years of the “carrot” effort to increase the value of mailers to make the change to less costly electronic notifications. Now, this Federal Register notice-driven change is the “stick.”
Can you expand on the differences in the ACS Notice fees?
As I mentioned, the current Manual Address Correction notices have a fee of $0.74. If a mailer switches to Automated Address Change Service (ACS) notices, the fees vary by class of mail and whether the notice is one of the first two notices or an additional notice beyond the first two. These fees range from $0.12 to $0.35. But that should not be the target. Only Full-Service STIDs are impacted, meaning the mailings affected qualify for Full Service – which means the mailing qualifies to use Full Service ACS, for which the ACS notices fees are $0.00 (FREE). That’s right, a potential 100% reduction in ACS fees.
Besides a reduction in the notice fees, what are some other benefits for mailers to make the change?
Speed, accuracy, usability. Speed – Manual Notifications must be printed and transported back to the mailer through the USPS. ACS notifications are transmitted electronically. So, the information arrives in a short, predictable timeframe that is not impacted by factors like weather conditions. Accuracy: Because the information comes in an electronic format, there is no need for data entry efforts and the risk of errors. Usability: This means the data is already in a usable format – ready to be fed into additional analysis and processes to either make corrections or direct the information to the correct department or person to start taking corrective actions.
Given the benefits, why have some mailers yet to make the transition?
There are several reasons. For some, the volume of these notices is so small that the cost to do anything else simply was not justified. For others, it is a matter of having the IT resources to implement processes to receive and process the data and perform the ongoing tasks to monitor and maintain the process.
So, should all mailers currently using Manual Notifications switch to ACS?
Most, yes, but not 100%.
There is no one-size-fits-all in mail. And that is not just meaning from mailer to mailer, but also within one mailer’s operations from one mail campaign to another. On a mailer by mailer – mail job by mail job basis, a mailer should evaluate the options that can be considered and the related costs, benefits, and risks.
Do you switch to an electronic ACS? No Address Correction or Return Service Requested?
There are risks and benefits to each; these vary based on the nature of the mailing. Let’s consider First-Class letters:
With No Address Correction, the piece will be forwarded for a time, but with no notice from the USPS going back to the mailer. So, worst case, after the forwarding time has expired, the mailer gets the pieces returned – potentially without new address information (depending on the timing). And the mailer must make extra efforts to try to reestablish contact with the recipient.
With Return Service Requested, even pieces that the USPS could have / would have forwarded are returned to the mailer. To get the information to the recipient, the mailer would need to generate a new piece to the new address with new postage (more costs and a more significant delay in the piece getting to the recipient).
But, for the majority of First-Class mail jobs, not only do I recommend switching to Full-Service ACS for the reasons already mentioned (speed, accuracy, and usability), but also to use Secure Destruction.
Secure Destruction – why do you recommend that?
Because of additional benefits and savings opportunities, in the past, when a First-Class piece could not be delivered nor forwarded, the mailer wanted the physical piece returned – mainly when it contained sensitive information. That way, in addition to knowing why the piece was not deliverable, the mailer could ensure the piece was securely disposed of. But, again, that came with additional time, cost, and risk impacts. Returning these pieces to the mailer also costs the USPS the most in additional handling costs.
With Secure Destruction, ACS is required, so the mailer is already getting the information on these Undeliverable As Addressed (UAA) pieces faster and electronically. And, instead of pieces traveling back to the mailer, the pieces are directed to Secure Destruction operations within the USPS’s facilities, thus, reducing the mailer’s need (costs and risks) for secure handling and Destruction of such pieces within their own operations. And, because the cost to do this Secure Destruction is so much less than the cost to return the pieces to the mailer, the USPS does not charge for this Secure Destruction service.
So, should all First-Class mail switch to using ACS with SD?
Nothing is 100% when it comes to the mail. And that is true here as well. So, in general, I say all First-Class mailers, yes.
This process sounds complicated – where can a mailer get help?
The USPS has documentation on all these services available online. In addition, USPS personnel are available to help answer questions about the services.
There are associations and industry events where you can connect with other mailers to learn how they use these services. If you are using a Mail Service Provider (MSP), they can provide a lot of guidance, as they likely have helped other clients with this. And, of course, mailers can reach out to other Service Providers and Subject Matter Experts whose focus is on providing these types of services to their clients.