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USPS, Discover First-of-its-Kind Contract Moves Forward

April 1, 2011
WASHINGTON, DC—April 1, 2011—In a first-of-its-kind contract, the U.S. Postal Service and Discover Financial Services have entered into an agreement that will help to retain First-Class Mail and grow Standard Mail volume. On March 15, the Postal Regulatory Commission notified the Postal Service that the agreement could be implemented. This is the first such agreement for domestic market dominant products under the Postal Accountability and Enhancement Act (PAEA).
 
“This ruling benefits both Discover Financial Services and the Postal Service,” said Paul Vogel, president and chief marketing/sales officer. “It is important in its approach as the first multi-class agreement that is designed to add new vitality to billing and statement mail.”

The agreement provides incentives to slow the diversion of First-Class Mail to electronic channels while spurring a corresponding increase in Standard Mail.

The agreement with Discover provides a rebate for a portion of the postage paid for First-Class Mail and Standard Mail as a result of future price increases. To qualify for the rebates, Discover’s postage revenues must meet or exceed an established dollar threshold. The full-service Intelligent Mail barcode (IMb) would also be required for all qualifying mail volume under this program.

The basic agreement includes five components:

• revenue threshold,
• revenue threshold adjustment,
• postage commitment,
• rebates on First-Class Mail, and
• rebates on Standard Mail.

About the U.S. Postal Service

A self-supporting government enterprise, the U.S. Postal Service is the only delivery service that reaches every address in the nation, 150 million residences, businesses and Post Office Boxes. The Postal Service receives no tax dollars for operating expenses, and relies on the sale of postage, products and services to fund its operations. With 32,000 retail locations and the most frequently visited website in the federal government, usps.com, the Postal Service has annual revenue of more than $67 billion and delivers nearly 40 percent of the world’s mail. If it were a private sector company, the U.S. Postal Service would rank 29th in the 2010 Fortune 500. Black Enterprise and Hispanic Business magazines ranked the Postal Service as a leader in workforce diversity. The Postal Service has been named the Most Trusted Government Agency six consecutive years and the sixth Most Trusted Business in the nation by the Ponemon Institute.

Source: release.
 

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