Reply Devices Account For At Least $400M In First Class Postage

November 23, 2011       Mark Hrywna      

Mail sent by only a handful of some of the largest charities generates almost $400 million in First Class postage revenue for the United States Postal Service (USPS), according to a survey by the Direct Marketing Association Nonprofit Federation (DMANF).

In response to federal legislation that would phase out nonprofit postal discounts, DMANF surveyed members on the impact that nonprofit mail has on First Class mail volume. The 18 respondents to the survey sent 325 million pieces of nonprofit mail, which in turn generates 8.7 million pieces of First Class reply pieces that provide approximately $390 million in First Class postage to USPS.

About half of the reply pieces are returned via Courtesy Reply (CR) envelopes provided by nonprofits, which are even more profitable for the Postal Service because they eliminate certain processing requirements, according to DMANF.

Members of the DMA and DMA Nonprofit Federation visited Capitol Hill for Postal Hill Day on Nov. 17 to talk about The Postal Reform Act (H.R. 2309), the measure that, if approved, eventually would eliminate the nonprofit postal rate.

The bill is sponsored by Darrell Issa (R-Calif.), chairman of the powerful House Government Oversight Committee, and includes language that would phase out the nonprofit postal rate over a decade, as well as other reforms to try to save the USPS. The committee last month amended and passed H.R. 2309, which calls for a rate increase three years after it’s passed followed by rate hikes each year until the nonprofit rate is at 80 percent, as opposed to the current 60 percent. The nonprofit postal rate can be a discount of anywhere from 26 to 35 percent, depending on the category and how it’s mailed.

“With the exception of Chairman Issa’s office, our position received positive feedback and reflected a solid appreciation for nonprofits and charities and the damage that would be wrought by losing the nonprofit postal rate preference,” DMA Senior Vice President Xenia “Senny” Boone said in an email to members.

The DMA has come out against Issa’s bill, instead endorsing the 21st Century Postal Reform Act (S. 1789), which was introduced early this month in the Senate by four key members.

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