… Whopping 30% Discount On Additional Mail Entered vs. 2023

WASHINGTON, DC — The USPS plan filed with the Postal Regulatory Commission would give mailers a 30% discount on additional First-Class and Marketing Mail volumes.

As part of the conditions of the program, credits from the First-Class Mail Growth Incentive can only be used for future mailings of qualifying First-Class Mail pieces. Credits from the Marketing Mail Growth Incentive can only be used for future mailings of qualifying Marketing Mail pieces.

From the PRC Filing:

Under both incentives, for every qualifying piece mailed in calendar year 2024 after the first million pieces, mailers receive a credit equal to 30 percent of the average per-piece price paid for mailing all qualifying pieces, unless the volume of qualifying pieces the mailer sent in the preceding fiscal year exceeded 1,000,000 pieces. In that case, credits accrue only after the mailer surpasses its fiscal year 2023 volume of qualifying pieces.

For example, for either incentive, if a mailer sent 900,000 qualifying pieces in fiscal year 2023, the mailer earns credits for pieces mailed in calendar year 2024 beginning with piece 1,000,001. But if a mailer sent 2 million qualifying pieces in fiscal 2023, then this mailer earns credits for pieces mailed in calendar year 2024 beginning with piece 2,000,001.

The use of calendar year 2024 for the incentive period and fiscal year 2023 for the comparison period is intentional. Doing so allows the Postal Service time to complete the administrative setup of the incentives before the incentive period begins.

Calculating the credits earned is somewhat complex. There is more than one qualifying product for each incentive, and within any given product, pieces of different weights, sortation levels, and dropship locations have different prices.

Accordingly, for each incentive, the credits earned are equal to the average actual per-piece price paid for all qualifying volume, after other incentives and promotions, i.e., the total actual price paid for all qualifying pieces (not including any special services that might be added to and paid for with these pieces), divided by the total volume of qualifying pieces. This average is then applied to the total volume of pieces eligible for credits.
For example, assume a mailer sends 5 million qualifying pieces in calendar year 2024 and sent 4.5 million qualifying pieces in fiscal year 2023. Table 1 shows how those 5 million pieces were distributed across three products and the prices the hypothetical mailer paid. The example uses generic product names because it illustrates both incentives.

table 1

Given that the mailer paid $3,194,000 for 5 milllion qualifying pieces, the average per-piece price is $3,194,000 / 5,000,000 = $0.639.

The mailer’s fiscal year 2023 qualifying volume was 4.5 million pieces, so it earns credits only on the last 500,000 pieces of the 5 million it mailed.

Thirty percent of the average, per-piece price paid of $0.639 for 500,000 qualifying pieces equals a credit of:
500,000 * 0.639 * 0.30 = $95,850.

Distributed across the total mailing of 5 million pieces that generated $3.2 million, the actual, per-piece credit is a much lower 3 percent.

Credits will be issued in July and October 2024 and in January or February 2025. Once issued, a mailer may use credits any time before the end of calendar year 2025.

Click for USPS Incentive Filing

Click for Incentives FAQ

Click for First-Class Mail Incentive Projections XLS

Click for Marketing Mail Incentive Projections XLS