Advertising mail aids suffering United States Postal Service

TEMP ORARY October 21, 2011 0

The Sept. 30 deadline that the United States Postal Service (USPS) had been issued to pay its financial obligations has passed. What’s the verdict? It appears that students will still receive letters from friends, birthday cards from their grandparents and care packages from their parents.

What has been the saving grace, the answer that the USPS has been looking to find? According to the Wall Street Journal, advertising mail, more commonly known as junk mail, was the answer. How is it that junk mail could save the USPS? In 2010, the USPS delivered more than 82.5 billion pieces of it. Granted, that is about 20 percent less than in 2007 but about 30 percent more than in 1990.

The USPS has eased the rules that businesses have to follow in order to issue advertising mail. For example, businesses can now bring up to 5,000 pieces of advertising mail to the post office to be delivered to homes on route without specific addresses on the envelope. This has resulted in both major savings to the businesses using advertising mail, and 501 million pieces of new advertising mail (from March to late Sept.).

These businesses receive major discounts for using advertising mail, 14.2 cents per piece of advertising mail compared to 44 cents that households have to pay for a normal first class letter. However, the volume of mail that the post office receives makes up the cost. Could the post office make more revenue by increasing the price? Certainly. Do they plan to? Potentially.

How many consumers made a purchase or acted as a result of receiving advertising mail? Only about 1.4 percent in 2010. That figure appears to be low and raises the question of whether advertising mail is worth the cost when email is so readily accessible to a large percentage of target audiences. However, the response rate for advertising mail is more than 125 percent higher than the response rate for emails.

Although increasing the volume of advertising mail will raise revenues, it is not enough. The USPS, according to the Wall Street Journal, is seriously considering selling 252 of its 487 mail-processing centers to save as much as $3 billion. It will also most likely be closing 3,200 post offices to save money.
“Over the past two weeks, the College has sent out over 4,000 pieces of mail,” Susan Darling, manager of Mail Services, said. “It is very unlikely that there will be any noticeable changes in the hours or number of employees that [Mail Services] offers.”

Joshua Horchler, a junior international business major, shared, “I would rather see an increase in the price of stamps than to see the United States Postal Service shut its doors forever. The impact that it would have on the economy would be far worse than what we could imagine.” So is it unreasonable to ask someone to pay more than 44 cents to send a letter from Pennsylvania to Sitka, Alaska? Horchler responded, “Absolutely not. Do you even know how far away Sitka is from here? The Postal Service needs to cover their costs in order to break-even, let alone make a profit.”

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