MEMO TO MAILERS
UNITED STATES POSTAL SERVICE
VOLUME 39 NUMBER 1
JANUARY 2004

WHAT'S INSIDE
USPS AND eBAY
NONPROFIT MAILERS
INDUSTRY TASK FORCE
KEEPING POSTED
POSTAL NEWS BRIEFS

THE POST OFFICE THAT NEVER SLEEPS
You can buy stamps online. You can print shipping labels, with postage. You can send cards and letters, put your mail on hold, track and confirm, learn about direct mail, and much more - all from your home or office computer. The Postal Service keeps making it easier for customers to do business at the Post Office that never closes - www.usps.com.

The Postal Service's presence on the Internet has skyrocketed since it first opened in 1997, when about 6,000 customers visited the site daily. Compare that to current daily visits - nearly a half million.

Click-N-Ship has become a driving force in online customer convenience since its introduction in the spring of 2002. This online shipping solution gives you the option of buying postage for mailing packages at home. Just print out postage-paid shipping labels from your PC.

Click-N-Ship allows you to store up to 500 addresses in your own domestic and international address book, and you can send an e-mail notifying a recipient to expect a package.

"The last step is even easier," says Chief Operating Officer Pat Donahoe. "Just hand packages to our letter carriers." With Click-N-Ship, your packages are ready to mail. In addition, the Postal Service is testing a program that lets you notify your Post Office that you have packages to be picked up by your carrier the next delivery day. It's called Carrier Pickup. It's being piloted in select Post Offices in Arizona, California and New York.

There's good reason that business is booming at USPS.com - it offers ease and convenience - anytime, anywhere. The Wall Street Journal recently called NetPost CardStore at USPS.com "the biggest time-saver of all" in its comparison of five companies offering computer-generated, customized greeting cards. It cited the Postal Service's "quick delivery and easy-to-use website."

How's this for easy? Customers can:

Pick favorite designs or upload personal photos or artwork.

Choose fonts, colors and even the stamp.

Design personalized cards for any occasion - weddings, holidays, invitations and more.

Upload mailing lists.

More than ever before, the Postal Service offers ease and convenience. Just click your mouse and we're there for you - bringing the Post Office to you.

VIRTUAL POST OFFICE + VIRTUAL MARKETPLACE = EASY SHIPPING
Easy to sell. Easy to buy. Easy to ship. That's the key to successful online commerce. And that's why the Postal Service and eBay have teamed up to offer one-stop shipping for sellers who ply their wares through the world's largest online marketplace.
By next month, USPS shipping solutions will be fully integrated into eBay's website, meaning "buyers will be able to select an item, pay for an item, pay for postage, print a label and arrange for pickup - all from eBay's website," says USPS Chief Marketing Office Anita Bizzotto. "Now, that's easy!"

This one-stop shipping solution will be particularly convenient for the growing number of small businesses that operate solely through eBay. "We have about 150,000 people who make their living selling full-time on eBay, and they ship lots and lots of packages," says eBay CEO/President Meg Whitman. "A small office or home office could be shipping anywhere from 50 to a thousand packages a day to build their eBay business. I would say it really is the home of small business."

The Postal Service was a natural choice to be featured on eBay, says Whitman. "You're in every community in America and have real touch points with our customers," she says. USPS is "a great brand name and trusted by our customers."

Think of it as a marriage between a virtual marketplace and a virtual Post Office. "We want to expand access to our products and services where customers live, work and shop. eBay is a natural place for us to be," says Bizzotto.

BUSH GUIDES CONGRESS ON POSTAL REFORM
President Bush has urged Congress to enact postal reform legislation based on five principles:

Implement Best Practices: Ensure that the Postal Service's governing body is equipped to meet the responsibilities and objectives of an enterprise of its size and scope.

Transparency: Ensure that important factual information on the Postal Service's product costs and performance is accurately measured and made available to the public in a timely manner.

Flexibility: Ensure that the Postal Service's governing body and management have the authority to reduce costs, set rates and adjust key aspects of the business in order to meet its obligations to customers in a dynamic marketplace.

Accountability: Ensure that a Postal Service operating with greater flexibility has appropriate independent oversight to protect consumer welfare and universal mail service.

Self-financing: Ensure that a Postal Service operating with greater flexibility is financially self-sufficient, covering all of its obligations.

The president's principles for postal reform follow a report issued last July by the President's Commission on the U.S. Postal Service, which recommended steps to ensure the long-term viability of the Postal Service.

NEW STANDARDS FOR NONPROFIT MAILERS
If you're a nonprofit organization that uses the mail for fund raising, a change in Postal Service rules could affect the way you solicit donations. Nonprofits have new options for contracting with professional fund-raising organizations to conduct these mailings at nonprofit postage rates.

Organizations that are authorized to mail at Nonprofit Standard Mail rates are entitled to mail at significantly lower rates than postal customers who use commercial Standard Mail rates. In order to prevent abuse of these privileges, there are certain eligibility restrictions on the use of Nonprofit rates. The oldest restriction is commonly known as the cooperative mail rule.

The rule is based on the principle that only nonprofits should benefit from Nonprofit rates. Under limited types of financial arrangements, they could get outside help to prepare mailings entered at Nonprofit rates. But, until recently, they couldn't share risk, profits or management control with a for-profit company and use Nonprofit rates.
As a practical matter, these standards limited the ability of some nonprofit organizations to retain the services of professional fund-raising organizations. This was particularly detrimental to the fund-raising efforts of newer and smaller groups that could benefit from using professional fund-raising organizations instead of conducting campaigns in-house. Accordingly, in recent years, members of Congress raised concerns that application of the cooperative mail rule was having a serious effect on the ability of some nonprofits to solicit donations.

This prompted a change, effective Nov. 13, to eliminate the application of the cooperative mail rule on mailings by authorized nonprofit organizations seeking monetary donations.
As a result of the change, mailings that solicit financial donations will not be ineligible for Nonprofit rates merely because the nonprofit engages a professional fund-raising organization under an arrangement in which risk is shared.

The new rule requires that, when nonprofits turn to professional fund-raisers, the nonprofit organizations must be given a list containing the names of all donors, contact information and the amount of their donations, unless the nonprofit waives receipt of that information in writing.

As a caution, nonprofit organizations should remain aware that other restrictions on the use of Nonprofit rates remain in place. Mailings that include solicitations for products or services, whether through sale, lease or other arrangements, will not be exempt from application of the cooperative mail rule. If there's a cooperative arrangement involving such goods or services, the mailpieces will not be eligible for Nonprofit Standard Mail rate. And if the mailpiece violates any of the other standards for Nonprofit mail, it will also be precluded from using Nonprofit rates.

The Postal Service cannot provide advice to nonprofit organizations on whether they should utilize the services of professional fund-raising organizations or, if they choose to do so, what they should consider in entering such arrangements. However, nonprofit organizations can obtain guidance on the use of professional fund-raisers from the Direct Marketing Association (DMA), the DMA Nonprofit Federation and PostCom. Go to www.nonprofitfederation.org or www.the-dma.org/cgi/dispnewsstand?article=1650 for this information.

"Our goal is to educate nonprofit organizations about the issues involved when they engage the services of outside fund-raising professionals," says Senny Boone, executive director of the DMA Nonprofit Federation. "This rule change is an opportunity for many nonprofits to reach new donors. But it also shines the light on the need for nonprofits to be aware of the key issues - such as control over address lists and assets - that arise when entering into contracts with professional fund-raisers."

Additionally, due to the concerns expressed by some that unscrupulous firms will attempt to utilize the rule to take advantage of unsophisticated nonprofits, the Postal Service, through its Consumer Advocate, will monitor implementation of the new rule to determine if abuses are occurring. If such abuses or other unintended consequences do occur, the Postal Service will consider a further rulemaking or other administrative actions.

The DMA Nonprofit Federation, PostCom and the Direct Marketing Association offer these suggestions to nonprofit groups:

Do not waive your right to know who gave and how much he/she gave.

Be sure to negotiate the arrangement at "arms length."

Set out every arrangement with an outside fund-raiser in a written contract.

Deposit donations received from the public in a bank account under the exclusive control of your nonprofit organization.

Insist that the list of contributors is the exclusive property of your nonprofit group.

Take steps to ensure that your nonprofit organization's master list of donors is not misused.

Before accepting financing from a fund-raiser, get the details in writing and make sure the offer does not lock you into continued employment of the fund-raiser.

Retain all ownership rights to any intellectual property in the fund-raising package developed at the nonprofit organization's expense.

Work with the professional fund-raiser to develop a reliable system to report each campaign's costs and results.

PRIORITY MAIL: PREPAID AND READY TO MAIL
Need to get that important document in the mail quickly? Just reach for a prepaid Priority Mail flat rate envelope. The postage is already printed on the envelope, saving you time and a trip to the Post Office. No home or office should be without a supply of this new product from the United States Postal Service.

Priority Mail offers delivery in two to three days to every address in the United States, including Post Office boxes and military addresses. The flat rate envelope offers one low rate of $3.85 for any amount of material that can easily fit inside. Now you have a choice - apply the postage yourself or get the prepaid version.

The new prepaid flat rate envelope features the $3.85 Jefferson Memorial stamp image printed directly on the envelope along with standard Priority Mail graphics. It's now available online from The Postal Store at www.usps.com/shop or by telephone at 800-STAMP-24.

Stock up! And reach for that Priority Mail envelope - postage included. It's convenience at your fingertips.

FYI
Holiday helper, indeed! Desktop computers were as busy as elves this past holiday season printing labels through the Postal Service's Click-N-Ship service. A one-day total of 96,116 labels printed - both with and without postage - topped all previous Click-N-Ship milestones. The busiest online day - Dec. 15 - coincided with the busiest "in-line" day at Post Offices. At one point, nearly 200 labels were being printed in one minute by customers across America, proving USPS delivers ease and convenience when you need it most. Go to www.usps.com/clicknship.

MAILING INDUSTRY TASK FORCE 2004 GOALS: REVENUE GROWTH, MAIL EFFECTIVENESS
The Mailing Industry Task Force will focus its efforts this year on two broad strategic objectives: stimulating mail channel revenue growth and making mail more effective, its leaders announced.

It also will launch an "incubation" process for innovative ideas to expand use of the mail by businesses and consumers.

"Our shift in direction marks the beginning of the second phase of the work of this task force," says task force co-chairman Michael Critelli, chairman and CEO of Pitney Bowes. "The current business environment, with rate stability for the next few years and public debate on the Postal Service business model reenergized by the work of the President's Commission, provides us with an opportunity to continue to serve as a catalyst for positive postal transformation."

The task force will restructure its industry/postal working groups to reinforce its new emphasis.

"The task force continues to focus on strategic objectives consistent with those of the United States Postal Service," says Deputy Postmaster General John Nolan, also co-chairman. "This alignment will support and strengthen the collaborative process that has been the hallmark of this unique public/private partnership."

Two postal employee unions - the National Association of Letter Carriers and the National Rural Letter Carrier Association - also will participate in the task force's activities.

Three new working groups will conduct the task force's work in the coming year. Their focus will be Intelligent Mail/Address Quality, Pricing/Payment and New Products/Services.

The innovative "incubator" initiative will be led by Nolan and David Sable, vice chairman and president of Wunderman, a New York-based direct marketing and advertising agency. The initiative, says Sable, "is one of the most transformational concepts we've developed. We hope to collect and share new ideas for mail growth that require nurturing but which hold great promise."

The Mailing Industry Task Force was formed in 2001 at the request of Postmaster General John E. Potter. The task force has called on the mailing industry and the Postal Service to bring about change by better responding to customer needs, by making mail a more competitive communications channel, and by unifying the industry.
For more information, go to www.usps.com/strategicdirection/mitf.htm

KEEPING POSTED
NEWS FROM AND FOR THE POSTAL CUSTOMER COUNCILS
USPS CUSTOMER AND INDUSTRY MARKETING TO LAUNCH PCC NATIONAL IMPROVEMENT PLAN
Customer and Industry Marketing is in the early stages of developing a Postal Customer Council (PCC) National Improvement Plan. The plan, when implemented, will reinforce and revitalize the PCC network.

"As vital communication links, PCCs can serve as the catalyst to reach out to new customers," according to Marty Emery, manager of Customer and Industry Marketing.
An initial step of the plan will be the assessment of the current PCC situation. A comprehensive survey will go to postal and industry leadership of every PCC.
"PCCs can expect to be hearing a lot from my office during 2004, first with questions, then with answers, useful tools and solutions," adds Emery.

For more information, contact Gary Infante of Customer and Industry Marketing via e-mail at ginfante@usps.com.

RAVE REVIEWS FOR PCC-SPONSORED MAIL MANAGEMENT COURSE
The first PCC-sponsored Executive Mail Center Manager (EMCM) course, conducted in Chicago, was "phenomenal," say participants. Twenty-seven mailing industry professionals graduated from the program, which offers training in key areas of interest to the mailing community such as marketing, mailpiece design, mail center operations, postal products and services, mail center safety and more.

"The class was phenomenal," says Janice Johnson, mail center manager for Mack and Parker, Inc. "The course was well-organized, and I'm glad I took it." Arthur Cervantes, office services manager for the Tribune Company, said, "It helped me a lot in my job and to understand the mail center activities. It will be of much value in the future."

The graduates were recognized at a ceremony Dec. 3 at the Cardiss Collins Processing and Distribution Center in Chicago. The course was the first conducted outside of the Postal Service's Business Mail Academy at the National Center for Employee Development in Norman, OK, which offers a five-day residency program. The Postal Service this year began offering the option of delivering the EMCM course on site through PCC sponsorship. The Baltimore, Cincinnati and Columbus PCCs also have signed on to offer the course to local mailing industry professionals.

"When I discovered that the EMCM course was going to be offered locally, including flexible class modules that worked around my busy schedule, I knew it was time to enroll," said David Ouimet, senior manager of Office Services, Blue Cross Blue Shield of Illinois, a graduate of the Chicago PCC-sponsored course. "For each of us, it's important to continue professional self-development that assures we are keeping up with the ever-changing mailing technologies, products and services. From someone who believes that we must look for a better way every day, this well-designed, well-delivered EMCM course greatly contributes to this goal for me, and for the others who could not have attended otherwise."

Marty Emery, manager, USPS Customer and Industry Marketing, said, "This epitomizes how relationships between the Postal Service, the mailing industry and our customers can result in win-win-win situations. Taking programs like this with a proven track record on the road makes good sense for us and our customers."

For more information about the EMCM program, contact Heidi Cherry of Customer and Industry Marketing via e-mail at hcherry@usps.com.

MTAC WORKGROUP PROVIDES RECOMMENDATIONS FOR DESIGNING FLAT-SIZE MAIL
A team of Postal Service and industry representatives, working under the auspices of the Mailers' Technical Advisory Committee (MTAC), has developed recommendations for designing flat-size mail, and plans to make a brochure and video available to mailers soon.

The mission of the MTAC Work Group for the Designing of Flat-Size Mail was to help guide USPS plans to improve the processing of magazines, catalogs and other flat mail to provide customers with the best possible service at reasonable rates. The team was led by George Hurst, USPS product manager for flats, and Joyce McGarvy, distribution director for Crain Communications Inc., and MTAC representative for Red Tag News Publications, Inc. Val Scansaroli, MTAC Steering Committee member for Periodicals, provided industry sponsorship for this initiative.

The Postal Service has sought input from its customers on its plans to automate the delivery of flat-size mail. The workgroup's main concern was not to create additional mailing requirements but rather to help the industry minimize potential mail damage and identify key factors which can cause problems in processing on the AFSM 100 flat-sorting machines.

Flat mail represents about 25 percent of total mail volume and generates about $16.1 billion annually in revenues.

POSTAL NEWS BRIEFS
USPS HOLDING RATES STEADY, REDUCING DEBT
The Postal Service exceeded its financial plan for Fiscal Year 2003 by $300 million - despite declining mail volume and an expanding delivery network - thanks to operational efficiencies employed during the year. USPS finished the year with a total net income of $3.9 billion when the recently enacted change to retirement funding is incorporated.

Chief Financial Officer Richard Strasser said that $3.8 billion of the net income was used to pay down Postal Service debt. "These financial results are important to the American consumer and American business," said Strasser. "They reinforce our confidence that we can hold current stamp prices unchanged until 2006."

Based on the audited financial results, the Postal Service had an unprecedented fourth straight year of productivity gains.

Productivity was twice that anticipated by the financial plan.

He credited the year's success to Postmaster General John E. Potter's continued focus on implementing the strategies outlined in the Transformation Plan, the Postal Service's blueprint for the future. For more information on the Transformation Plan and a progress report on efforts so far, go to www.usps.com/strategicdirection/tpprogressreport.htm.

MARKETING HONOR FOR WARGO
The Postal Service's John Wargo, vice president of Service and Market Development, received the Silver Apple Award from the Direct Marketing Club of New York for his efforts in promoting direct mail for the past 30 years.

Among his many accomplishments, Wargo is credited with being the voice of the business customer in the Postal Service. He helped create the first USPS account management teams to work with businesses. He also promoted work-sharing discounts and was an early proponent of Postal Customer Councils.

FILTRATION SYSTEM WILL PROTECT EMPLOYEES, MAIL
Deployment of new equipment designed to improve the overall health and safety of postal employees - and to reduce their exposure to biological threats in the mail - begins this year with the installation of new ventilation and filtration systems (VFS) in mail processing and distribution centers across the country.

The equipment is designed to capture and contain potentially hazardous airborne particulates which might be released during in-bound mail processing operations.

VFS represents the second phase of a multi-tiered response to events resulting from the anthrax attacks in 2001. The first phase is nationwide deployment of biohazard detection systems.

BARCODE ACCURACY TO BE TESTED
USPS will use MERLIN to begin checking the accuracy of barcodes on high volume mailings beginning Jan.1.

MERLIN (Mail Evaluation Readability Lookup INstrument) is the equipment used to verify bulk mailings at Postal Service mail acceptance units. The equipment performs a variety of checks on samples of large mailings to make certain they meet required preparation standards. First deployed in 2001, the equipment had only been used to verify that barcodes were readable by automated sorting equipment. Now, it also will check for blatant ZIP Code errors as represented in the barcode.

By verifying that such mailings are eligible for automation rates, USPS can make certain that the high quality of mail accepted at discount postage rates is maintained.
MERLIN will begin to detect such errors as ZIP Codes with 0000 or 9999 in the ZIP+4 portion of the mailing address. It will also identify sequential strings of numbers in the last six digits of the ZIP Code, which would indicate an address programming error. Mailings with an error rate of more than 1 percent will not be eligible for automation discounts.

The analysis of barcode digit strings is the first of a phased-in strategy to improve address accuracy. MERLIN will sample all mailings of letters or oversized envelopes that total more than 10,000 pieces and about one in every six mailings less than 10,000 pieces.

CORRECTION:
Theodor Geisel, better known as Dr. Seuss, hails from Springfield, MA. In the November issue of Memo to Mailers, his hometown was listed as Springfield, VA.

ARE YOU READY?
USPS customers can now find important information about citizen preparedness at Post Offices nationwide. The Postal Service and the Department of Homeland Security are distributing 10 million "Get Ready Now" brochures to 38,000 postal facilities.

The partnership between the two federal agencies is part of Homeland Security's "Ready" campaign, a public education initiative designed to help Americans prepare for and respond to potential terrorist attacks. The goal of the campaign is to raise the basic level of preparedness across the nation.

In addition to Post Offices, "Get Ready Now" brochures are available by calling 800-BE-READY or by visiting www.ready.gov.

MEMO TO MAILERS
Volume 39 Number 1
Ilze Sella
Editorial Services

Frank Papandrea
Art Director

David Ostroff
Designer

Alan Valsi
Purchasing Specialist

John E. Potter
Postmaster General and CEO

Azeezaly S. Jaffer
Vice President, Public Affairs and Communications
MEMO TO MAILERS
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