Danger: Move Update Ahead

Leo Raymond   July 31, 2017    

The Postal Service’s long road to assessing mailers who submit mail bearing outdated addresses may be finally reaching a conclusion.  According to the Postal Regulatory Commission’s latest timeline, it should be prepared to issue a decision in late August on the Postal Service’s request to charge an $0.08 penalty for every piece in a mailing with an outdated address that exceeds a 0.5% tolerance.  Following such an order, the Postal Service plans to issue final rules soon thereafter, and begin imposing the assessments six months later – meaning sometime close to mid-2018.

If the outcome of the case is in line with what was the USPS requested, this would be a major milestone in the “Move Update” saga.  For anyone unfamiliar with the term, “Move Update” is postal-ese for the requirement that the addresses used in any commercial (bulk) rate mailing must have been updated (corrected as needed) using a USPS-approved method within 95 days before that use.

The reason this has been a long road is simple: the USPS established “Move Update” standards over fifteen years ago in an effort to reduce the volume of, and expense for handling, mail that’s undeliverable as addressed and that, consequently, has to be returned, forwarded, etc.  The effort has been less than successful, however, and UAA mail remains an expensive problem.

By imposing a penalty for bad addresses exceeding a small tolerance, the Postal Service hopes at last to have the tool to force improvements in address accuracy.  However, as indicated by comments from several parties during the PRC proceeding, what the USPS sees as a solution may be less than perfect.

Commenters didn’t quibble with the need for address accuracy, for the establishment of a measure of compliance with Move Update standards, or for a penalty for noncompliance.  Rather, the major issues raised included:

*   Double jeopardy.  Parsing the Move Update standard, there are actually two components: address accuracy and the use of a USPS-approved method.  The methodology the USPS will use to monitor address accuracy – a “census” review of mailpieces in process – will determine only whether the mailing has accurate addresses within the 0.5% tolerance.  Nothing in the review process, or in the Postal Service’s pending case before the PRC, relates to whether a USPS-approved method was used.  Mail presenters attest to meeting that requirement when signing a postage statement, and the only way to verify it is to examine the address processing paperwork the mailer is supposed to retain.  The US Postal Inspection Service has had a habit of asking mailers for such evidence and, when it’s not produced, or doesn’t prove the use of a USPS-approved address update method, or doesn’t show the list was processed within 95 days of use, concludes that the entire mailing is ineligible for any presort (commercial) rate and re-rates it at the single-piece First-Class Mail rate.

Therefore, even if the “census” shows address accuracy within the 0.5% tolerance, a mail presenter can still face a steep upcharge if Inspectors cannot be shown that a USPS-approved method was used within the specified timeframe.  By separately applying the two halves of the Move Update standard, mailers believe – and protest, not without reason – that they’re exposed to a form of double jeopardy.

*   The assessment.  Simply put, mailers ask where the proposed amount to be assessed per piece came from.  Currently, the penalty is $0.07, but whether for that or the new, higher $0.08 amount, the question remains how that figure was developed.  The issue is less that there shouldn’t be a penalty – no-one really argues against that – than that the amount of the penalty has some reasonable basis.  Presumably, there’s a cost avoided, for example, or some other basis for picking one figure rather than another, but no rationale of any kind was included in the Postal Service’s request to the PRC.

Commenters on the filing also took issue with the Postal Service’s use of “deterrent” to describe the assessment, e.g., that it’s a “deterrent” to poor quality addressing.  As was pointed out, such a euphemistic choice of terms is akin to saying jail time is a deterrent to crime when, in fact, it is a penalty for doing something illicit.

*   Timing.  Some commenters advanced the argument that the 0.5% threshold being proposed by the USPS was too stringent for immediate implementation and, instead, should be phased in after periodic measurement of mailers’ achievement of address quality.

This is perhaps the weakest argument, however, not because some mail presenters may find the 0.5% tolerance challenging, but because the entire mailing industry has had over fifteen years to get address lists up to snuff.  Asking for more time now to do what should have been done long ago seems hard to endorse.

*   Responsible party.  Conversely, a more meaningful argument against the Postal Service’s proposal is one that’s been advanced throughout the Postal Service’s process of establishing Move Update assessments: the penalty is being applied to the wrong party.  As the USPS stubbornly persists in proposing, the penalty for exceeding the threshold will be imposed on the mail presenter (the mailing service provider) even though it’s the mail (list) owner who’s responsible for the quality of the addresses used in a mailing.

Apparently, the USPS believes that because the mail presenter was the last party to “touch” the list, it should have performed the necessary update and, accordingly, should be accountable for any address flaws it contains.  Maybe so, IF the mail presenter was allowed to perform Move Update on the list by its owner; if the mail (list) owner claims to have done so already, or otherwise won’t allow the mailing service provider to process the addresses for accuracy, the mailing company is left holding the bag.  Though some service providers protect themselves either by requiring list owners to let them perform Move Update processing or, alternatively, by indemnifying the mailer should penalties be assessed, that isn’t a universal practice.

Moreover, and perhaps more importantly, it’s the list owner who receives address corrections and is expected to incorporate them in its address file.  If that’s not done, the un-updated addresses will eventually be too old for the “USPS-approved” method to detect them.  Given that all postage statements identify the true “owner” of a mailing, the USPS could penalize that party if inaccurate addresses are found, but it adamantly chooses not to, instead pushing the problem onto the mailing service provider.  Apparently, the Postal Service’s interest in knowing who originated the mailing doesn’t go so far as wanting to take effective action to ensure that party provides accurate addresses.

The bottom line, therefore, is simple: barring any PRC action to remedy the issues outlined above, and assuming the commission’s and Postal Service’s timelines are realized, the mailing community will face a new challenge by the middle of next year.  In dealing with that challenge, mailing service providers will need to be more scrupulous in ensuring address lists are processed in compliance with Move Update rules and, at the same time, in insulating themselves against the neglect of irresponsible list owners.

The preceding blog post was based on a recent article in Mailers Hub News, a biweekly publication distributed to Mailers Hub subscribers.  For more information, go to MailersHub.com.