The information contained herein is the published property of Mail Systems Management Association (MSMA). The MDC Study Guide includes basic

Transcription

1 The information contained herein is the published property of Mail Systems Management Association (MSMA). The MDC Study Guide includes basic information and is to be used as a basic reference tool, only. For specific USPS regulations, requirements, and restrictions, sign up to receive electronic federal register notice updates, maintain a professional network thru MSMA and add the online Domestic Mail Manual as a My Favorite' to your Internet Browser.

2 Acknowledgement The content within this study guide has been tailored to assist individuals with their study preparation to the Mailpiece Design Consultant exam. Information used within this study guide has been collected from various public resources and condensed for your convenience. This 2014 revision of the study guide was a collaborative effort of a team of individuals who gave their time and expertise to make sure the information was accurate and up to date. Kathy Battin, CMDSM, MQC, MDC, MDP Vice President Postal Affairs & Project Management, Postal Source, Davenport, Iowa Linda S. Ferrell, CMDSM, MDC, MCOM, MDP, MA Retired, Houston, TX Mark Hale, CMDSM, CMDSS, EMCM, MDC, MDP Account Executive, Onsite Management Group (OMG, LLC), Cincinnati OH Darlene Handy, LSSGB, CMDSM, MDC Director, Intake Center Operations & Claims Fulfillment, Universal American, Houston, TX Paul Kovlakas, MDC Director, Postal Relations, Pitney Bowes Inc., Washington DC Chris Kula, CMDSM, CMM, EMCM, MDC, MDP Manager, Mail Center Operations & Direct Mail Development, RuffaloCODY, Cedar Rapids, IA Shawn Martin, CMDSM, MDC Service Delivery Manager, Novitex Enterprise Solutions, Cleveland, OH Betsy Shortell, CMDSM, EMCM, MDP, MDC Director Harvard University Mail and Distribution Services, Boston, MA Jud Thurman, CMDSM, CMDSS, MDC, MDP Business Manager, Gospel Minutes Publications, Fort Worth, TX Thad Weikal, CMDSM, EMCM, MDC, MDP Mail Center Supervisor, Kenneth Copeland Ministries, Fort Worth, TX Janet Lockhart-Jones, M.S., Ed.D., SCPM, MDC Curriculum Manager, Pitney Bowes Enterprise Learning I would like to extend a special thank you to Barbara Fahy, MSMA National President, for her diligence in overseeing this project and keeping it on schedule. Cordially, Jane Patton, CMDSM, MDC, MDP VP of Education, Mail Systems Management Association Manager Distribution Center Services, Texas Guaranteed

3 Table of Contents 1 Postal Processing Overview... 1 Shaped-Based Initiative... 1 Postal Operations... 2 Classes of Mail... 3 Priority Mail Express Service... 4 First-Class Mail Service Periodicals Standard Mail Service Package Services USPS Incentive Programs Processing Methods & Categories... 1 Manual and Automated Processing Methods... 1 Physical Standards for Commercial Letters and Postcards... 3 Automation Letters and Cards... 5 Mailpiece Materials, Construction and Sealing... 5 Incompatible Materials and Sealing Methods... 7 Physical Standards for Commercial Flats... 8 Retail and Nonautomation Flats... 8 Automation Flats... 9 First-Class Mail Automation Letters, Postcards and Standard Mail Automation Letters Work Share Incentives... 1 Mailing Services... 1 Retail Mailing Services... 1 Discount Mailing Services... 1 Online Mailing Services... 1 Mail Service Providers... 1 Work Share Incentives... 2 Move Update... 3 Alternative Methods... 4

4 Certificate of Compliance... 4 Address Change Service... 4 Ancillary Service Endorsements... 4 National Change of Address Linkage System... 5 National Change of Address Linkage System Mail Processing Equipment... 5 Outsourcing... 6 Selecting an Outsourcing Partner... 6 Comparing Costs: In-House vs. Outsourcing... 6 Mail Service Providers... 7 Planning a Discount Mailing Addressing and Automation... 1 Addressing Guidelines... 1 Address Management Software Products & Services... 1 Delivery Point Validation... 1 Locatable Address Conversion System... 2 Address Element Correction... 2 International Addressing Requirements... 4 Window Envelopes and Inserts... 5 Barcode/Window Clearance... 5 Barcode/Label Clearance... 7 Address Labels... 7 Mailpiece Clear Zones and Free Space... 8 Printing Guidelines... 9 Address Block Skew Barcodes Intelligent Mail barcode Decoding the Intelligent Mail Barcode Extra Services... 1 Certificate of Mailing... 1

5 Certified Mail... 1 Collect on Delivery... 2 Restricted Delivery... 2 HOLD FOR PICKUP... 3 USPS Tracking... 3 Insurance... 4 Registered Mail... 4 Adult Signature... 5 Return Receipt... 5 Signature Confirmation... 7 Special Handling Ancillary Endorsements Remittance Mail... 1 Business Reply Mail... 1 Business Reply Mail Formats and Design Standards... 2 BRM Labels... 3 Facing Identification Marks... 4 Obtaining FIMs and Barcodes... 4 Printing Standards for Reply Mail... 4 Qualified Business Reply Mail (QBRM)... 5 International Business Reply Service... 7 Courtesy Reply Mail... 8 Meter Reply Mail Postage Methods... 1 Postage Stamps... 1 Forever Stamps... 1 Precanceled Stamps... 1 Postage Meters & PC Postage Products... 4 Date and Postage Corrections... 7 Mailing Date Accuracy and Mailing Periods... 8

6 Permit Imprint (Indicia)... 9 Use of Permit Imprint... 9 Stealth Postage Private Express Statutes... 1 What is a Letter?... 2 Suspensions of the PES... 2 Criteria for Extremely Urgent Letter Suspension of PES... 2 Material Not Considered Letters... 2 PES Resource Information History of The Postal Service... 1 The Postal Service Begins... 1 The Pony Express... 2 ZIP Code... 2 Postal Reorganization Act... 3 The Postal Service Board of Governors... 4 Transformation Plan... 5 The Postal Accountability and Enhancement Act of Guiding Principles for Implementation of the New Law... 7 Challenges Facing the USPS... 7 Significant Years in U.S. Postal History... 8 Mailing Industry Resource Publications Postal Knowledge Review... 1

7 1 Postal Processing Overview Shaped-Based Initiative The shape of the mailpiece plays a major role in the processing method used by the Postal Service, which is reflected in the realignment of classes of mail and update of pricing structure that went into effect on May 14, Today s pricing structure recognizes that each mail class has different processing costs and variable delivery options, making it easier for mailers to determine which class or sub-class of mail would benefit them and/or their customer base the most for the moneys spent. Another change relative to shape-based pricing was a reduction in the additional ounce rate for Presorted First-Class Mail. As shape remains important in determining the price, less emphasis is placed on weight. If the contents intended for a large envelope can be folded and placed into a letter-size envelope, the mailer can reduce postage costs. On the other hand, a mailer may determine that using a large envelope will enhance the perceived value of the enclosed message to the addressee and choose to pay the higher price. Likewise, some items traditionally prepared and mailed as a package may be reconfigured and placed in a large (expansion) envelope, saving the mailer on the first ounce. When mailers choose to mail more efficient shapes, the Postal Service costs are lower and the savings can be passed on to the mailers through lower prices, as illustrated below: $$$$ Parcel vs. $$$ Flat (max wt 13 oz) $$$ Flat vs. $$ Letter (max wt 3.5 oz) $$ Letter vs. $ Post Card (max size 3.5x5 ) Letter-size mailpieces that weigh 3.5 ounces or less that do not meet aspect ratio standards, or have any other nonmachinable characteristics, are subject to the nonmachinable surcharge for First-Class Mail or nonmachinable letter-size pricing for Standard Mail. Letters that weigh more than 3.5 ounces or exceed any of the maximum letter dimensions, regardless of weight, are subject to flat-rate pricing. Similarly, mailpieces that exceed any of the dimensions for a flat are subject parcel-rate pricing. The maximum weight limit for First-Class Mail flat is 13 ounces, except for First-Class Mail commercial plus parcels. First-Class Mail weighing more than 13 ounces that is not entered at commercial plus prices is automatically re-classed as Priority Mail. The maximum weight limit for Standard Mail flats and parcels is ounces. MDC STUDY GUIDE PAGE 1 CHAPTER 1 POSTAL PROCESSING OVERVIEW

8 The mailer has a choice (subject to content restrictions for some classes of mail), as to the value of the shape of the mailpiece, versus the cost of preparing and mailing it. Machinable letters are automation-compatible letters not barcoded by the mailer but easily processed and bar-coded on postal processing equipment. To ensure efficient processing of commercial flat-size mail, all flats must be rectangular in shape, which includes four square corners or with finished corners that do not exceed a radius of 1/8 inch, uniform in thickness, flexible and meet deflection criteria. Mailpieces that do not meet these criteria are subject to the parcel-rate pricing. (Note: the physical standards for automation flats are based on the Automated Flat Sorting Machine-AFSM 100.) Postal Operations First-Class Mail from collection boxes and carrier pickup is processed through the Advanced Facer Canceller System (AFCS). This is a process where mail is separated by sizes, sorted and oriented to face the same direction so it can be processed on postal automation equipment. It is then processed through different channels based on mail classification and size. A Facing Identification Mark (FIM) used on reply mail helps separate the mail by type. Certified Mail is located and culled from the primary mail stream by the special taggent (color) on the Certified Mail label. The article number is then scanned and recorded by postal personnel Stamped or metered mail has phosphorus and fluorescence in the stamp and ink of the meter impression that help to face the mail on the equipment. Stamped mail needs to be completely cancelled, so the stamp cannot be reused and the date of entry into the mail stream shows on the mailpiece. Metered Mail is sometimes sprayed to indicate the date of entry into the mail stream although it is not required since the mailer is supposed to print the actual date the mail is entered into the mail stream. This varies from Post Office to Post Office. MLOCRs (Multi Line Optical Carrier Reader) read the address on the mail piece and spray an Intelligent Mail Barcode (IMb) in the barcode clear zone. If it can't read it, it sprays an orange barcode on the reverse and sends the information off to a remote encoding station where human operators read the mail and key in the correct destination information. This is then tied to that orange barcode so the next piece of equipment to read it will spray the correct IMb in the barcode clear zone. If the barcode clear zone is not available to have the IMb sprayed then it goes to a machine that applies a white opaque label and then sprays the IMb on the label. From there the mail is put through a number of passes on a barcode sorter, arranging the mail in increasingly finer sortation levels with each pass until the mail is in carrier route delivery sequence. In between these passes, it is transported to various processing centers and commingled with other mail on similar journeys. Automation-rate First-Class Mail and Standard Mail skips most of the steps since it is entered thru the Business Mail Entry Unit (BMEU). The mail is already separated by size and processing MDC STUDY GUIDE PAGE 2 CHAPTER 1 POSTAL PROCESSING OVERVIEW

9 category and does not need to be cancelled. It is 100% DPBC and is put directly on the barcode sorters. Nonautomation mail may require extra steps in order to process and that is why it costs more to send. Letters and flats are processed on different types of machines. It costs the Postal Service less to process letter mail because the equipment is significantly faster and takes up much less floor space. The barcodes allow postal equipment to track and process each mailpiece to Carrier Route Walk Sequence thus saving time and allowing the carrier to spend his entire day delivering mail instead of manually casing it. Flat Processing machines were updated to eliminate the need for manual keying of the destination ZIP Code, and the roll-out of the Flat Sequence Sorter (FSS) will further automate this process by sorting flats into carrier sequence. Small parcels have also been automated with saving incentives for the mailers who presort and barcode them. There are several primary factors that determine the rates that apply to a specific mailing: Classification of the mail Physical size, shape and weight of the mailpieces Contents of the mailpieces The postal equipment the mailpiece is processed on Distance Each of these factors is interdependent of the other and plays a role in determining the rates that will be applied to the mailing or individual mailpiece. Classes of Mail On May 14, 2007, the Postal Service implemented a new pricing system, which reshaped the future of mail. Now that mailing costs are primarily based on the shape of mail, not just weight, has instilled a better understanding to the fact that the shape of a mailpiece plays a major role in postage pricing. That said the current price structure recognizes that each of these mail shapes require different resources to be processed resulting in substantially different processing costs. This realignment has provided greater opportunities by creating a more flexible rate system for mailers to obtain lower rates. Mailers who continue to find ways to reconfigure their mail into shapes that reduce handing costs for the Postal Service help keep rates affordable for everyone. The Postal Service divides mail into different classes and sub-classes, which are defined by different standards, service levels, features, pricing and requirements. Determination of which class of mail you have to choose from is dependent on the contents, size, weight, speed of delivery and price you are willing to pay. With a maximum weight of 70 pounds for any single article, almost anything can be mailed, however, as previously stated what you gain in the speed of delivery, will have a direct effect on your cost per piece. MDC STUDY GUIDE PAGE 3 CHAPTER 1 POSTAL PROCESSING OVERVIEW

10 Priority Mail Express Service Priority Mail Express is the Postal Service s premium service that provides reliable expedited mail delivery and offers online tracking at up to $100 insurance against loss, damage, or rifling is included at no extra cost (additional merchandise insurance may be available up to $5000, depending on the value and nature of the item), is delivered 365 days a year to most destinations and is the only overnight service that will deliver to a postal mailbox and/or PO Box. Note: A premium fee may be charged for Sunday or holiday delivery. Mailers may call or visit for delivery information between specific ZIP Codes. Hold for pickup is a Post Office-to-Post Office option. The sender must notify addressee for pickup. Domestic Priority Mail Express services are backed with a money back guarantee and include: Next Day Service This service provides delivery or notification to the addressee or attempted delivery on the following day by a specific time. Second Day Service Locations not eligible for next day service or mailpieces received after the designated drop-off time may use the Second Day Service option. This service provides delivery or notification to the addressee of attempted delivery by noon or 3pm on the second delivery day. Priority Mail Express Military Service is available between the United States and designated APOs and FPOs. Shipments are delivered in 2 to 3 days to more than 300 locations in Europe, Asia, and Panama. Priority Mail Express International Service is available between the United States and more than 190 foreign countries. Damage and/or money back refund claims must be made within 30 days from the date of the mailing. Refunds do not apply if: An incorrect ZIP Code or address was written in the delivery address block. Delivery was attempted but not accomplished within the specific time. Forwarding or return service was provided after article was made available for claim. A delay caused by non-usps strikes or work stoppages. The piece was detained for the purpose of law enforcement. For mailers' convenience, Priority Mail Express envelopes and boxes are available at no cost from local Post Offices and at Customized preprinted labels are also available by contacting your local Post Office. Matter mailed in USPS-provided Priority Mail Express packaging is subject to Priority Mail Express rates regardless of how the packaging is reconfigured or how markings may be obliterated. MDC STUDY GUIDE PAGE 4 CHAPTER 1 POSTAL PROCESSING OVERVIEW

11 Rates and Fees Except when using a Priority Mail Express Flat Rate envelope or box, Priority Mail Express prices are based on weight and zone. Items are charged the half-pound price for weights up to one-half pound. Items over a half pound are rounded up to the next whole pound. Pickup on demand service is available for a flat fee regardless of the number of pieces. Service and information is available by calling or at There is only one fee for all Priority Mail Express, Priority Mail, or Standard Post pick up at same time. Postage Payment and Documentation Retail Priority Mail Express may be paid by adhesive stamps or with postage meters. Commercial based mailers have multiple options to pay postage which include: Priority Mail Express USPS Corporate Account Click-N-Ship Registered and approved PC Postage products Approved IBI meters Meter imprint markings must be appropriate and the data is electronically transmitted to the USPS with an approved Priority Mail Express shipping label. Permit imprint through Electronic Verification Systems (EVS). Content Standards First-Class Mail (including Priority Mail or Priority Mail Express) is required for personal correspondence, handwritten or typewritten material, and bills or statements of account. It may also be used for any mailable item. Deposit Priority Mail Express Next Day and Second Day items may be mailed at any Post Office location, including stations and branches; dropped into Priority Mail Express collection boxes; handed to carriers; or picked up by the USPS. Acceptance and collection information may be obtained by calling or contacting your local postmaster. Priority Mail Express that weighs more than 13 ounces bearing only postage stamps may not be deposited into a collection box or other unattended location, but must be presented at a Post Office retail counter. Extra Services Return receipt service and Collect on Delivery (COD) are available. MDC STUDY GUIDE PAGE 5 CHAPTER 1 POSTAL PROCESSING OVERVIEW

12 Waiver of Signature Mailers may instruct the USPS to deliver Priority Mail Express packages without obtaining the addressee's signature by signing the waiver on the Priority Mail Express label. A waiver signature cannot be used for Priority Mail Express Custom Designed Service, Priority Mail Express COD, or Priority Mail Express with additional insurance. The USPS Priority Mail is an expedited service that includes expedited handling and transportation with the USPS. However, it does not include a guarantee delivery within a specified time. Priority delivery service standards are reported as 1-day, 2-day or 3-day service, which is based on where the piece is coming from and where it is going to (i.e. the origin ZIP and the destination ZIP). This expected delivery time is printed directly on shipping labels when they are used to pay for the service. Priority Mail Express is a subclass of Priority Mail. The USPS is now including insurance coverage when you ship with Priority Mail. The first $50 of coverage is provided free of charge, and comes automatically when you ship with Priority Mail. For shippers that qualify for Commercial Plus Pricing, $100 coverage is included. Rates and Fees Except for Priority Mail Flat Rate envelopes and boxes, postage is determined by weight, zone and sometimes even size. Balloon pricing may apply to packages destined to zones 1-4 that weigh less than 20 lbs and measure greater than 84 inches in combined length and girth. Parcels addressed for delivery to zones 5-8 that exceed 1 cubic foot (1,728 cubic inches) are charged postage based on the actual weight or the "dimensional weight" whichever is greater. Commercial Base Priority Mail Prices are available for: Click-n-Ship customers. Registered end-users of USPS-approved PC Postage products when using a qualifying shipping label managed by the PC Postage system used. Customers using permit imprint Priority Mail Open and Distribute customers using permit imprint. Customers using USPS-approved IBI postage meters that print the IBI with the appropriate price marking ("Commercial Base Price," "Commercial Base Pricing," or "ComBasPrice") and electronically transmit transactional data to the USPS. Permit holders using Merchandise Return Service (MRS) for Priority Mail mailpieces when all MRS requirements are met. The Postal Service offers an optional "no fee" electronic Delivery Confirmation service, available through Click-N-Ship, PC Postage products, some vendor-provided mailing systems and for manifest mailing systems (MMS) mailers. Think shape and size for the best value; here s an easy way to look at it: For the lowest postage rate possible, use the smallest envelope or box possible. For Envelopes: As an example, a letter mailed in a 6" x 9" envelope costs less than a 9 x 12 envelope and is considered the preferred envelope when converting from a large envelope to smaller one. MDC STUDY GUIDE PAGE 6 CHAPTER 1 POSTAL PROCESSING OVERVIEW

13 For Boxes: Don t ship small, lightweight items in large boxes practice right-size shipping. This helps you avoid possible surcharges for oversized packaging. Or you can simply use Postal Service packaging that comes in a range of sizes to meet your shipping needs. Dimensional-weight pricing does not apply to Priority Mail Open and Distribute (formerly Priority Mail Drop Shipment) mailings of other classes of mail when enclosed in USPS-supplied containers. Priority Mail containers, including the Priority Mail Flat Rate Boxes, available at Post Offices and USPS.com are not based on weight and zone but are charged a flat rate regardless of actual weight (up to 70 pounds) of the mailpiece and domestic destination. First-Class Mail that weighs over 13 ounces is Priority Mail. It can weigh up to 70 pounds and have a combined length and girth that does not exceed 108 inches (exception Balloon Pricing). There is no minimum weight for Priority Mail if the mailpeice is marked Priority Mail. For retail mail Priority Mail postage may be applied using adhesive stamps or postage meter imprint. Available for purchase using a credit card through is Priority Mail Forever Prepaid Flat Rate packaging. If the mailer wants to purchase additional services they must be purchased at a retail Post Office location using postage stamps, Postage Validation Imprint (PVI) or postage meters. As with Priority Mail Express there are Commercial base prices available when postage is paid using Click-N-Ship or PC Postage options. Priority Mail can be deposited at USPS collection boxes, handed to carriers or presented at Post Offices. Remember that packages with adhesive stamps that weigh more than 13 ounces must be presented at a Post Office retail counter and packages with meters or PC Postage can be deposited in collection boxes or at acceptance points assigned by the USPS. Open & Distribute Service The USPS Open and Distribute Service is a premium service that enables mailers to ship to destination mailing facilities or delivery units at the speed of Priority Mail Express or Priority Mail services. Standards The Priority Mail Express or Priority Mail shipment and the enclosed mail must meet all corresponding eligibility and preparation standards. The mail enclosed in a Priority Mail Express or Priority Mail pouch must consist either entirely of single-piece rate matter or entirely of presorted matter that is part of the same mailing, unless an exception is granted by the Pricing and Classification Service Center (PCSC). Authorization Except under DMM , Zoned Rate Matter, no authorization is required for Priority Mail Express or Priority Mail Open & Distribute Service, but the mailer must obtain necessary permits, licenses, or authorizations for the enclosed mail or postage payment method used and must pay any annual mailing fee applicable to the enclosed mail at the Post Office where the Priority Mail Express or Priority Mail Open & Distribute Service is mailed. MDC STUDY GUIDE PAGE 7 CHAPTER 1 POSTAL PROCESSING OVERVIEW

14 Basis of Rate Priority Mail Express or Priority Mail postage must be paid on the weight of the entire contents of the Priority Mail Express pouch or Priority Mail sack. The tare weight of the pouch or sack is not included in this weight. Zone Rates Zone rates for Priority Mail are computed from the accepting Post Office to the destination Post Office for the Open & Distribute Service (not the destination Post Office for the enclosed mail). Calculating Payment for Enclosed Mail Postage and fees for the mail enclosed must be prepaid under the applicable standards. When the enclosed mail is zone-rated, the zone is computed from the postal facility where the Priority Mail Express or Priority Mail Open & Distribute Service is destined. Discounts otherwise available to the enclosed mail may be claimed if the applicable standards (e.g., volume and preparation) are met. Payment Method Postage on the enclosed mail may be paid with any method permitted for that mail class. Priority Mail Express postage may be paid with adhesive stamps or meter stamps. Priority Mail postage may be paid with adhesive stamps or meter stamps affixed to Tag 159. Priority Mail may also be paid with a permit imprint through a manifest mailing system, optional procedure mailing system, or alternate mailing system. If a permit imprint is used for Priority Mail postage, the permit imprint must be affixed to or hand-stamped on the tag. There are commercial based prices available to mailers when the postage is paid using a Click-N-Ship service or by registered end-users of PC Postage produces when using a qualified label managed PC Postage system. Open & Distribute Service Priority Mail Express Priority Mail Express Open & Distribute Service (Priority Mail Express Custom Designed Service, Priority Mail Express Next Day Service, or Priority Mail Express Second Day Service) expedites movement of any other class of mail between domestic postal facilities. The open & distribute service receives the Priority Mail Express service selected from the origin Post Office to the destination Post Office of the shipment, where the enclosed mail is processed and provided the appropriate service from that Post Office to its destination. Service Objectives The service guarantee for a Priority Mail Express shipment using Open & Distribute Service procedures ends on receipt at the postal facility where the shipment is destined and does not apply to the delivery of the enclosed mail to the address. Preparation A Priority Mail Express Open & Distribute Service must be contained in a blue and orange Priority Mail Express pouch, except that Customized Market Mail (CMM) pieces under DMM may be contained in USPS-provided Priority Mail Express envelopes and cartons or in any properly labeled container supplied by the mailer. The mailer must present matter prepared using the proper mailing label that must be placed in an EP-13 envelope and attached to each Priority Mail Express pouch. Blue Tag257 is used for Priority Mail Express Open and Distribute sacks or trays going to DDUs and contains an address label with a service barcode. MDC STUDY GUIDE PAGE 8 CHAPTER 1 POSTAL PROCESSING OVERVIEW

15 Blue Label 257S is used on Priority Mail Express Open and Distribute flat rate envelopes going to DDUs and an address label with a service barcode is affixed to the flat rate envelope. Yellow Tag 267 is used on Priority Mail Express Open and Distribute sacks or tray boxes going to all mail processing facilities and contains an address label with a service barcode. Open and Distributed shipments to a DDU may contain a USPS-provided Priority Mail Express Flat Rate Envelope using Label 257S under DMM c. In addition to the tags listed above, USPS-supplied cartons and envelopes and mailer-supplied containers must be addressed "POSTMASTER OPEN AND DISTRIBUTE"; followed by street address (mailing address) of the facility on the next line; and city, state, and ZIP Code on the last line. Deposit Site A Priority Mail Express Open & Distribute Service must be deposited at a postal facility designated by the postmaster to accept both the class of mail enclosed and Priority Mail Express. The shipment must be prepared and presented to the business mail entry unit (BMEU) of the origin Post Office. Acceptance Time A Priority Mail Express Open & Distribute Service must be presented to the BMEU with enough time for acceptance, processing, and dispatch to the Priority Mail Express unit before the cutoff time for Priority Mail Express. Extra Services No extra services can be added to the Priority Mail Express portion of the Open & Distribute Service. Payment Method Priority Mail Express postage may be paid with adhesive stamps or meter stamps. Priority Mail postage may be paid with adhesive stamps or meter stamps affixed to Tag 159. Priority Mail may also be paid with a permit imprint through a manifest mailing system, optional procedure mailing system, or alternate mailing system. If a permit imprint is used for Priority Mail postage, the permit imprint must be affixed to or hand-stamped on the tag. Open & Distribute Service Priority Mail Priority Mail Open & Distribute Service expedites movement of any other class or subclass of mail (except Priority Mail Express) between domestic postal facilities. The Open & Distribute Service receives Priority Mail service from the origin Post Office to the destination Post Office of the shipment, where the enclosed mail is processed and provided the appropriate service from that Post Office to its destination. This service reduces transportation time and expedites delivery of enclosed mail. Preparation A Priority Mail Open & Distribute Service must be contained in either an orange Priority Mail sack or a letter-size tray, except that Customized Market Mail pieces under DMM may be contained in USPS-provided Priority Mail envelopes and cartons or in any properly labeled container supplied by the mailer. MDC STUDY GUIDE PAGE 9 CHAPTER 1 POSTAL PROCESSING OVERVIEW

16 Open and Distribute shipments to a DDU may contain a USPS-provided Priority Mail Express Flat Rate Envelope using Label 257S or Priority Mail Flat Rate Envelope and boxes using Label 190S under DMM c. Deposit Site A Priority Mail Open & Distribute Service must be prepared according to Postal Service guidelines and presented to the business mail entry unit (BMEU) authorized by the postmaster to accept the class of mail enclosed. Acceptance Time A Priority Mail Open & Distribute Service must be presented to the BMEU with enough time for acceptance, processing, and dispatch before the critical dispatch time for Priority Mail. Zone Rates Zone rates for Priority Mail are computed from the accepting Post Office to the destination Post Office for the Open & Distribute Service. Extra Services No extra services can be added to the Priority Mail Open & Distribute Service. Mail enclosed may receive only the following services: First-Class Mail pieces may be sent with Certified Mail service or special handing or, for First- Class Mail parcels only, electronic option Delivery Confirmation service or electronic option Signature Confirmation service. Standard Mail pieces subject to the residual shape surcharge (except Customized Market Mail pieces) may be sent with electronic option Delivery Confirmation service. Parcel Select and Package Services mail may be sent with special handling or, for Package Services parcels only, electronic option Delivery Confirmation service or electronic option Signature Confirmation service. Enclosed Mail Classes of mail that may be included in a Priority Mail Open & Distribute Service are retail First-Class Mail, presorted First-Class Mail, Periodicals, and Standard Mail. Mail requiring cancellation may not be drop shipped. Acceptable containers for expedited transport are as follows: A Priority Mail Open & Distribute Service must be contained in either an orange Priority Mail sack or a letter-size tray, except that Customized Market Mail pieces under DMM may be contained in USPS-provided Priority Mail envelopes and cartons or in any properly labeled container supplied by the mailer. Open and Distributed shipments to a DDU may contain a USPS-provided Priority Mail Flat Rate Envelope and boxes using Label 190S under DMM c. In addition to the Priority Mail sack label, the appropriate tags and label must be attached to each Priority Mail sack to identify it as a Priority Mail Open & Distribute Service. The tag indicates the class of mail enclosed in the Priority Mail sack and provides a place to affix Priority Mail postage. This tag or an approved facsimile also must be affixed to containers used for Priority Mail Open & Distribute Service of CMM. Pink Tag 190 is used on Priority Mail Open and Distribute sacks or tray boxes going to DDUs and contains an address label with a service barcode. MDC STUDY GUIDE PAGE 10 CHAPTER 1 POSTAL PROCESSING OVERVIEW

17 Pink Label 190S is used on Priority Mail Open and Distribute flat rate envelopes and boxes going to DDUs and an address label with a service barcode is affixed to the flat rate envelope or box. Green Tag 161 is used on Priority Mail Open and Distribute sacks or tray boxes going to all Destination Mail Processing Facilities and contains an address label with a service barcode. Mailers can order tags, labels and boxes by ordering them through the USPS Expedited Package Supply Center at (800) In addition to the tags previously listed, USPS-supplied cartons and envelopes and mailer-supplied containers used for Priority Mail Open & Distribute Service must be addressed "POSTMASTER OPEN AND DISTRIBUTE"; followed by street address (mailing address) of the facility on the next line; and city, state, and ZIP Code on the last line. Payment Method Priority Mail postage may be paid with adhesive stamps or meter stamps, permit imprint through a manifest mailing system, optional procedure mailing system, or alternate mailing system. If a permit imprint is used for Priority Mail postage, the permit imprint must be affixed to or hand-stamped on the tag. First-Class Mail Service First-Class Mail prices are the same no matter what the domestic destination and the price also includes forwarding and return services. Postage on First-Class Mail is calculated by the ounce. The maximum weight of a First-Class letter is 3.5 ounces and the maximum weight of a First- Class large envelope/flat or package/parcel is 13 ounces. First-Class mailpieces over 13 ounces become Priority Mail. Items required to be sent as First-Class Mail or Priority Mail include: Handwritten or typewritten material Bills, statements of account or invoices, and credit cards Personal and personalized business correspondence All matter sealed or otherwise closed against inspection First-Class Mail pricing includes: Postcards Letters Large Envelopes/Flats weighing 13 ounces or less Packages/Parcels weighing 13 ounces or less First-Class Mail letter-size pieces must meet certain physical requirements or be subject to surcharges or shape based pricing. A letter-size mailpiece that is square, rigid or meets at least one nonmachinable characteristic will be subject to a surcharge and flat sized mailpieces that are rigid, non rectangular or have uneven thickness will be charged parcel rates. Many smaller and beginning mailers use First-Class Mail for letters and post cards because mailings at single piece rates do not require a special payment method, mailing permit, and the extra time to presort the mail and prepare it for acceptance at a Business Mail Entry Unit (BMEU) of the USPS. MDC STUDY GUIDE PAGE 11 CHAPTER 1 POSTAL PROCESSING OVERVIEW

18 It is simple and quick to place a stamp on the mailpiece and drop it in any collection box. Mailers also have the option to add extra services such as Registered Mail and Certified Mail for a fee. For larger mailings (500 pieces or more), the USPS offers reduced postage and work share discounts for preparing the mailing for the USPS before bringing it to the BMEU. There are various levels of discounts based on the amount of presorting and automation compatibility of the mailing. Refer to DMM section 201 to understand the physical standards and differences between machinable letters and cards, nonmachinable letters and machinable and automation letters and cards. DMM section 230 outlines First-Class Mail price and eligibility, postage payment and documentation, mail preparation and the enter and deposit requirements while DMM section 600 outlines the basic standards that are required for all mailing services. PS Notice 3-A and 3-S USPS Notice 3-S is an easy to use Shape-Based Pricing Template. The mailer can quickly identify if the mail piece does not meet minimum and maximum postcard, letter or large envelope (flat) sizes, exceeds thickness or does not meet aspect ratio requirements. Important Reminder: Only Use Current Versions of Notice 3-A and 3-S Notice 3-A, Letter-Size Mail Dimensional Standards Template, and Notice 3-S, First-Class Mail Shape-Based Pricing Template, are valuable tools for Retail Associates and customers alike to quickly and easily determine whether or not a mailpiece meets USPS physical mailing standards. Please ensure that you are using the most recent version of each Notice: the November 2011 version of Notice 3-A and the June 2010 version of Notice 3-S. Do not use earlier versions of these Notices. Postal Service employees can order Notice 3-A, Letter-Size Mail Dimensional Standards Template, stock number , and Notice 3-S, First-Class Mail Shape-Based Pricing Template, stock number , from the Material Distribution Center (MDC) through ebuy2 or by using touch tone order entry (TTOE) at Note: You must be registered to use TTOE. To register, call , Option 1, extension 2925, and follow the prompts to leave a message. Wait 48 hours after registration before placing your first order. Postal Service customers can order Notice 3-A, Letter- Size Mail Dimensional Standards Template, and Notice 3-S, First-Class Mail Shape-Based Pricing Template, from the Material Distribution Center (MDC) in Topeka, KS, by calling Customer Service at , Option 4, to get details on availability and price. Customers will then mail the MDC a check or money order along with the ticket number given to them by Customer Service. The cost to customers for 10 each of Notice 3-A and Notice 3-S, handling, and Standard Post postage is about $23; with Priority Mail, the cost is about $28. If a customer orders only one of each, the cost is approximately $10 or $15, depending on whether it is shipped by Standard Post or Priority Mail. MDC STUDY GUIDE PAGE 12 CHAPTER 1 POSTAL PROCESSING OVERVIEW

19 Periodicals The Periodicals class of mail is designed for newspapers, magazines and other periodical publications whose primary purpose if transmitting information to an established list of subscribers or requesters. To become a periodicals mailer, one must apply and become authorized to mail using these rates. For publications to quality, they must be published at regular intervals, at least four (4) times per year from a known office of publication and consist of printed sheets. There are specific standards for circulation, record keeping, and advertising limits. There are also special rates for Nonprofit, Classroom and Science-of-Agriculture types of periodicals. Periodicals have no minimum weight and can weigh no more than 70 pounds. Rates are based on pounds, pieces, advertising content, shape and containers. Periodicals mail is subject to postal inspection. Meters, stamps and permit imprints are not used to evidence postage for Periodicals. Rather, Periodicals must contain an ID statement. Refer to DMM section 707 for Periodical requirements. Standard Mail Service Standard Mail (formerly known as Standard Mail (A) and third-class mail) is mail matter that is not required to be mailed as First-Class Mail or Periodicals and must weigh less than 16 ounces. A Standard Mail mailing must have at least 200 pieces or 50 pounds within the same processing category, i.e., all letters, all flats or all parcels. Standard Mail is only for domestic mail and there are no single-piece prices. The USPS Service objective for Standard Mail is 2 9 days. The delivery time is not guaranteed and Standard Mail is not sealed against postal inspection. Personal information may not be included in a Standard Mail mailpeices unless all of the following conditions are met: The mail piece contains explicit advertising for a product or service for sale or lease or an explicit solicitation for a donation. All of the personal information is directly related to the advertising or solicitation. The exclusive reason for inclusion of all of the personal information is to support the advertising or solicitation in the mail piece. Mailers use Standard Mail to send out: Printed matter, flyers, circulars, advertising Newsletters, bulletins and catalogs Small parcels Rates and Fees Standard Mail has pricing for letters, flats and parcels. Postcards are mailed as letters or flats if sent Standard Mail. Postage for Standard Mail pieces weighing 3.3 ounces or less is determined by the piece charge. Standard Mail weighing over 3.3 ounces is subject to per pound and per piece charges. Mailers are responsible for proper postage payment and can pay MDC STUDY GUIDE PAGE 13 CHAPTER 1 POSTAL PROCESSING OVERVIEW

20 postage for Standard Mail with a meter, permit imprint or pre-cancelled stamps. Remember a permit imprint can be used for mailings contain non-identical-weight pieces but the mailer must have authorization to do so from the USPS. When postage is not affixed, documentation meeting requirements must be presented for acceptance. Refer to the USPS DMM 244, 344 and 444 for detailed Postage Payment and Documentation requirements. There are extra services that can be used with Standard Mail parcels such as electronic Delivery Confirmation, bulk insurance and Return Receipt for merchandise. Standard Mail can only be forwarded or returned if the mailpiece includes and ancillary service endorsement which may result in additional fees or postage. Undeliverable Standard Mail Undeliverable-as-addressed (UAA) mail is forwarded, returned to sender, or treated as dead mail as authorized for the particular mail class. A mailer endorsement is used to instruct the Postal Service regarding the mailpiece's appropriate disposition upon determining that it is UAA. Standard Mail with proper endorsements will allow the mailpiece to be delivered and reduce the UAA volumes. If the mailer does not receive returned mail with the endorsement Returned to Sender this indicates that the mailpiece was delivered, it maybe was delivered, it was destroyed, or it was lost in the postal system. Standard Mail Nonprofit Nonprofit mailers who qualify can mail at reduced rates. A qualified organization is not organized for profit, and none of its net income inures to the benefit of any private stockholder or individual. Only political committees, voting registration officials, and organizations that meet specific standards for qualified nonprofit organizations and that have received specific authorization from the USPS may mail eligible matter at the Nonprofit Standard Mail rates. Except for mailings deposited under the plant-verified Open & Distribute Service program, a separate authorization is required at each Post Office where nonprofit rate mailings are deposited. Pieces mailed at the Nonprofit Standard Mail rates must meet the general standards for Standard Mail for letters, for flats, for parcels and the standards specific to any other discount or rate claimed. Nonprofit mailings are the only class of mail that continues to receive congressional appropriations to subsidize postage. Types of organizations that may qualify: Religious Educational Scientific Philanthropic Agricultural Labor Veterans Fraternal MDC STUDY GUIDE PAGE 14 CHAPTER 1 POSTAL PROCESSING OVERVIEW

21 Ineligible Nonprofit Organizations: Service Social Hobby clubs Citizens' and civic improvement associations State, county, and municipal governments Eligible and Ineligible Matter Nonprofit rates are not permitted for mailing promotional material for credit cards, insurance policies, and travel arrangements. Authorized organizations may not let any other person or organization use their authorizations to mail at Nonprofit Standard Mail rates. Cooperative Mailings Cooperative mailings may be mailable at Nonprofit Standard Mail rates only if each cooperating organization is individually authorized to mail at Nonprofit Standard Mail rates where the mailing is deposited. Deposit Standard Mail is presented to the USPS where the permit or license is held and all mailing fees have been paid except when presented as: Plant-verified drop shipment (PVDS) Plant-load mailings must be deposited as specified in the plant load agreement Metered mailings may be deposited at other USPS sites as permitted under DMM 705 Nonprofit Standard Mail must be presented only at a post office where the organization producing the mailing has an approved nonprofit authorization. The USPS allows Standard Mail that meets requirements to be deposited at the correct destination postal facility. The mailer must prepare and present the appropriate documentation such as form 8125 or provide an Authorization for Network Distribution Center (NDC) acceptance where required. Mailers must transport the mail presented at destination facilities. Refer to DMM 246, 346 and 446 for detailed entry requirements. Package Services Package Services is a class of mail primarily intended for merchandise, catalogs and other printed material. It is not an expedited service. There are four subclasses of mail in Package Services: Standard Post (formerly Parcel Post) Media Mail Library Mail Bound Printed Matter Each subclass is suited for a type of mail and offers different levels of service and requirements as far as advertising and content. There is no minimum weight to be mailed using a package service and the maximum weight is 70 pounds for Standard Post, Media Mail and Library Mail service. MDC STUDY GUIDE PAGE 15 CHAPTER 1 POSTAL PROCESSING OVERVIEW

22 Standard Post is Package Services matter not mailed as Bound Printed Matter, Media Mail, or Library Mail. Standard Post is for single-piece mailings which consist of any mailable matter that is not required to be mailed as First-Class Mail. It is commonly used for gifts and merchandise. There are no bulk prices for Standard Post. Media Mail is generally used for books (at least 8 pages), film, printed music, printed test materials, sound recordings, play scripts, printed educational charts, loose leaf pages and binders consisting of media information and computer readable media. There are advertising restrictions when using Media Mail. Postage rates are based on pounds. There are potential discounts presorted mailings of 300 or more pieces. There is also a barcode discount for machinable parcel-size mailings consisting of at least 50 pieces. Library Mail can be used by qualifying institutions such as libraries, universities, zoos, research institutions and nonprofit organizations to mail educational and research materials. Postage rates are based on pounds. There are potential discounts presorted mailings of 300 or more pieces. There is also a barcode discount for machinable parcel-size mailings consisting of at least 50 pieces. The USPS does not guarantee delivery of Library mail within a specified timeframe and it is not sealed against postal inspection. A delivery and return address is required for all Library Mail. Reference DMM sections 180, 380 and 480 for detailed Library Mail requirements. Examples of items that can be mailed at Library Mail prices when sent between entities identified in DMM are as follows. Books, which consist wholly of reading matter, scholarly bibliography, or reading matter with incidental black spaces for notations and containing no advertising except for incidental announcements of books Printed music, bound or sheet form Bound volumes of academic theses, whether typewritten or duplicated form. Periodicals, whether bound or unbound Sound recordings Other library materials in printed, duplicated, or photographic form or in the form of unpublished manuscripts Museum materials, specimens, collections, teaching aids, printed matter and interpretive materials for informing and furthering the educational work and interests of museums and herbariums Bound Printed Matter has a maximum weight of 15 pounds per mailpiece. Insurance, Delivery Confirmation and other extra services can be added to Package Services mail for a fee. All subclasses of Packages Services mail are subject, or open to postal inspection. Package Services does not include free forwarding and return for undeliverable mail but these services can be added by using ancillary service endorsements. Bound Printed Matter sent without an endorsement that is refused or undeliverable will be disposed of at the local post office. The other Package Services will be returned to sender postage-due. Before mailing merchandise, compare the costs and service between Priority Mail and Packages Services. In some cases, the postage cost is nearly the same but Priority Mail is faster and includes free forward and return services for undeliverable mail. MDC STUDY GUIDE PAGE 16 CHAPTER 1 POSTAL PROCESSING OVERVIEW

23 Bound Printed Matter must: Be paid by permit imprint. Consist entirely or a combination of advertising, promotional, directory or educational material. Be bound securely by permanent fastenings such as staples, spiral binding, glue or stitching. Loose leaf binders are not considered permanent. Consist of sheets of which at least 90% are imprinted by any process other than handwriting or typewriting with words, letters, characters, figures or images or a combination. Not have nature of personal correspondence. Not be stationery, such as pads of blank printed forms. There are commercial prices, carrier route prices, and destination entry discounts available for bulk quantities of Bound Printed Matter. The Minimum quantity is 300 pieces. There is also a barcode discount available for Bound Printed Matter pieces. USPS Incentive Programs The USPS introduced a Standard Mail Saturation / High Density Incentive Program in Since then a variety of programs and incentives designed to enhance the value of mail and increase the use of physical mail have been introduced. The USPS typically announces the next year s scheduled programs before the end of the current year, to enable mailers to understand and facilitate budgeting and planning to take advantage of the promotions and incentives. For 2014, 8 promotions and 1 incentive were proposed as part of the 2014 Rate Change. As always, the promotions proposed by the USPS in such filings is subject to review and approval by the Postal Regulatory Commission (PRC). The USPS anticipates that it will continue to announce proposed promotions and incentives in this manner going forward. The programs for 2014 are described as follows, the latest information can be found on RIBBS at: Proposed USPS Promotional Calendar: HD and WSS Incentive Runs all year long (CY 2014) Rebate on volumes above CY2013 volume + 2% 20% rebate on WSS 15% rebate on HD 5% rebate for nonprofits Branded Color Mobile Technology Promotion Runs February March 2014 Similar to past mobile promotions Use QR or other mobile print technology on inside or outside of mail piece Use Color, Trademarks, etc. 2% discount on qualifying postage MDC STUDY GUIDE PAGE 17 CHAPTER 1 POSTAL PROCESSING OVERVIEW

24 EDDM Coupon Promotion Runs March December 2014 Designed for USPS Sales Team Promote use of EDDM by new small business customers $50 or $100 credit on postage for EDDM mailings Must be redeemed by January 2015 Premium Advertising Promotion Runs April June 2014 Promote use of First-Class Mail for marketing & advertising 15% discount on postage Must have mailed $6million+ in Standard Letters postage in FY 2013 Earned Value Reply Mail Promotion Runs April June 2014 Similar to 2013 Reply Mail promotion $0.02 per-piece rebate on qualifying BRM & CRM pieces $0.03 rebate if mailer participated in 2013 promotion and increased their volume of qualifying BRM/CRM pieces in Mail & Digital Personalization Promotion Runs May June 2014 Use personalized URLs to drive integrated marketing 2% upfront discount on postage Emerging Technology Featuring Near Field Communication Promotion Runs August September 2014 Standard Letter and Flats only (and nonprofit) Must use standard NFC or other emerging technology to engage a mobile device in an interactive experience. 2% upfront discount on postage Color Print in FCM Transactions Promotion Runs August December 2014 Requires color, dynamic/variable printing on contents of the transactional piece 2% upfront discount on postage Mail Drives Mobil Commerce Promotion Runs November December 2014 Builds upon 2013 Mobil Buy-it-Now promotion Utilize mobile purchasing technology 2% upfront discount on postage 1% additional rebate on postage if # of Priority Mail packages > 0.5% of pieces sent MDC STUDY GUIDE PAGE 18 CHAPTER 1 POSTAL PROCESSING OVERVIEW

25 2 Processing Methods & Categories Manual and Automated Processing Methods The Postal Service processes mail through three types of operations: Machinable (or automation compatible) operations allow non-barcoded mailpieces to be processed on machines. Nonmachinable operations require an employee to read the address on each piece of mail and then sort the mail into "pigeon holes" in a letter case. Automation mail meets machinable criteria, is IMB barcoded and received barcoded discounts. The Postal Service handles mailpieces differently according to their size. The mailpiece size determines which sorting equipment will be used to process your mail. The type of processing determines potential discounts. If your presorted mail is not compatible with Postal Service automation standards, it has to be processed manually. This is time-consuming, costly, and likely to reduce the work sharing discounts you might otherwise be entitled to on mail entered at a business mail entry unit (BMEU). USPS Processing Equipment The Postal Service uses a variety of automated equipment. The most efficient and accurate mail processing results from using automated, high-speed, computerized mail sorting and processing equipment. Automated Letter Processing Equipment The Postal Service uses two basic types of automated equipment to process letter-size mail: Multiline Optical Character Reader (MLOCR) Bar Code Sorter (BCS) The MLOCR scans the address block on each letter-size mailpiece to determine the ZIP+4 Code and the delivery point information, and verify the address information against an internal database. To locate the address, the MLOCR must be able to scan all the elements clearly. That's why a complete address and "good" print quality are so important. The MLOCR converts that information into an Intelligent Mail barcode. The MLOCR then prints the barcode in the lower right corner (barcode clear zone) of the mailpiece and performs an initial sortation. The barcode is then used for further sortation. From that point on, the mailpiece is sorted by high-speed Bar Code Sorter (BCS) that read and interpret the barcode. MLOCRs are capable of reading, barcoding, and sorting mail at a rate of 40,000 pieces per hour about 11 pieces per second. These machines are used not only by the US Postal Service, but also by large companies and collateral mailing agents like presort bureaus and letter shops. If you accurately barcode your letter-size mailpieces, they can skip the entire MLOCR process and go straight to a barcode sorter. Mail in this category can receive the maximum postage discount. The BCS "reads" Intelligent Mail barcodes on letter-size pieces and sorts the mail accordingly. This machine doesn't read addresses, so it will miss sort a piece if the customer has applied an MDC STUDY GUIDE PAGE 1 CHAPTER 2 PROCESSING METHODS & CATEGORIES

26 incorrect barcode. The BCS can read and sort 40,000 pieces per hour as well. With the advent of Wide Area Bar Code Readers (WABCRs), a BCS can find a barcode almost anywhere on the face of a letter-size mailpiece, including the address block area and the barcode clear zone. This allows mailers to apply barcodes so they can qualify for lower rates and take advantage of faster, more efficient mail processing. But, for other reasons, the barcode must always be printed within 4 inches of the bottom edge of the piece either as part of the address block or within the barcode clear zone in the lower right corner. When buying any ZIP+4 matching software, make sure that the product bears The Postal Service certification seal. The software must be Coding Accuracy Support System (CASS) certified. Postage Discounts The Postal Service offers a variety of postage discounts for correctly prepared automation-compatible mailings. You can qualify for automation rates for Intelligent Mail barcoded mailpieces prepared and submitted according to postal standards. Your local Post Office can help you or refer you to another source for information. This is an excellent way to incorporate work share incentives and save money! Mail Evaluation Readability Lookup Instrument (MERLIN) is a tool that is used by the Postal Service to assist with the acceptance of business mail. All business mailings presented for acceptance must be verified to confirm their eligibility for reduced postage rates. When entering bulk mailing at the BMEU, mailers will have their mail run through the verification process. MERLIN verifications are separated into two categories: Initial review: Business mail entry clerks inspect a mailing for fees, funds, and eligibility. In-depth review: MERLIN uses a sampling procedure to produce reports for verification. It automates the previous manual acceptance process for presorted First-Class Mail, Standard Mail and Periodicals to qualify for work share discounts. MERLIN processes letters, postcards, and flat-size pieces. MERLIN verifies First-Class Mail, Standard Mail, and Periodicals mail against the standards set in the Domestic Mail Manual (DMM) for Postage discounts, Sorting, Barcodes, and Piece counts. Barcode Specifications Barcoding your mail affects mailpiece design. Because there are no OCR readability standards, you have more latitude in selecting colors, type styles, and the location of the address if you barcode your mail. When an automation rate mailing barcoded according to postal standards is processed directly on BCSs, the mailing doesn't need to meet the standards for MLOCR readability. If you aren't able to barcode your mailpieces, they should meet all MLOCR readability standards. Meeting these standards will enable a mailing agent (such as a presort bureau or letter shop) to barcode your mail using an MLOCR and to be sure that the read rates will be high. Mailings of letter-size pieces that receive a barcode discount require the customer to barcode 100 percent of the pieces with an Intelligent Mail barcode. MDC STUDY GUIDE PAGE 2 CHAPTER 2 PROCESSING METHODS & CATEGORIES

27 Physical Standards for Commercial Letters and Postcards The Postal Service classifies letters and cards into one of three categories: Machinable Nonmachinable Automation For the purposes of determining mailability or machinability, the length for letters and cards is the dimension parallel to the address as read. Machinable Letters and Cards Letters and cards having an accurate address and that can be processed on Postal Service equipment is machinable and eligible for presort prices. Machinable mailpieces must meet specific standards, including size, shape, and weight. Machinable letters cannot have any nonmachinable characteristics. Maximum weight for First-Class Mail and Standard Mail machinable letters is 3.3 ounces and Periodicals mailed as a lettersize is 3.5 ounces Nonmachinable Letters Presorted First-Class Mail letters are subject to a nonmachinable surcharge if they have nonmachinable characteristics. (Note: nonmachinable characteristics do not apply to pieces mailed at card prices.) Standard Mail letters weighing 3.3 ounces or less and having one or more nonmachinable characteristics are subject to nonmachinable letter prices. Maximum weight for First-Class Mail and Periodicals is 3.5 ounces, and for Standard Mail 3.3 ounces MDC STUDY GUIDE PAGE 3 CHAPTER 2 PROCESSING METHODS & CATEGORIES

28 Nonmachinable Criteria A letter-size piece is nonmachinable if it has one or more of the following characteristics: Has an aspect ratio (length divided by height) of less than 1.3 or more than 2.5. Is polybagged, polywrapped, enclosed in any plastic material, or has an exterior surface made of a material that is not paper. Windows in envelopes made of paper do not make mailpieces nonmachinable. Attachments allowable under applicable eligibility standards do not make mailpieces nonmachinable. Contains clasps, strings, buttons, or similar closure devices. Contains items such as pens, pencils, keys, or coins that cause the thickness of the mailpiece to be uneven; or loose keys or coins or similar objects not affixed to the contents within the mailpiece. Loose items may cause a letter to be nonmailable when mailed in paper envelopes. Is too rigid (does not bend easily when subjected to a transport belt tension of 40 pounds around an 11-inch diameter turn). For pieces more than 4-1/4 inches high or 6 inches long, the thickness is less than inch. Has a delivery address parallel to the shorter dimension of the mailpiece. Is a self-mailer that is not prepared according to tabbing and sealing regulations. Is a booklet that is not prepared according to tabbing and sealing regulations. Pens, pencils, key rings, bottle caps, and other similar odd-shaped items are not permitted in letter-size or flat-size paper envelopes unless they are wrapped within the other contents of the envelope to streamline the shape of the mailpiece and prevent damage during postal processing. If an odd-shaped item is not properly wrapped, it could burst through the envelope and cause injury to employees and damage to USPS processing equipment. Odd-shaped items that are properly wrapped within paper envelopes and sent at letter prices may be subject to the nonmachinable surcharge. Certain types of odd-shaped items, when properly wrapped, are permitted as automation price letter-size mail. Aspect Ratio Machinable Aspect Ratio: 1.5 Nonmachinable Aspect Ratio: 1.25 MDC STUDY GUIDE PAGE 4 CHAPTER 2 PROCESSING METHODS & CATEGORIES

29 Automation Letters and Cards Letter-size mailpieces that are machinable and display the correct Intelligent Mail barcode may qualify for automation prices. A letter or card meets automation standards and qualifies for automation prices if it meets the specific addressing, barcoding, and design standards. Physical Standards: Maximum weight: 3.5 ounces (Heavy letter mail weighing over 3 ounces must be in a sealed envelope, have no stiff enclosures and bear a barcode in the address block) Rectangular. Aspect ratio (length divided by height): 1.3 to 2.5 Dimensions: Minimum: 3-1/2 inches high, 5 inches long, and either inch thick if not more than 4-1/4 inches high and 6 inches long; or inch thick if more than 4-1/4 inches high or 6 inches long, or both. Maximum for First-Class Mail card prices: 4-1/4 inches high, 6 inches long, and inch thick. Maximum for letters and other cards: 6-1/8 inches high, 11-1/2 inches long, and 1/4 inch thick. *Length is the dimension parallel to the address as read Design Standards Making your mailpieces automation-compatible is important. Automated equipment can process mail more efficiently, allowing the Postal Service to maintain lower rates for those pieces. Your automation-compatible mailpiece should: Meet the size and weight standards in this chapter. Be made of good quality white or light-colored paper. Contain no sharp or bulky items. Be sealed securely. Be readable by automation equipment. A USPS Mailpiece Design Analyst (MDA) is a primary resource for obtaining instructions to design automation-compatible mailpieces. Mailpiece Materials, Construction and Sealing The following recommendations for paper and card stock refer to the minimum basis weight of the materials. Basis weight is defined as the weight (in pounds) of a ream (500 sheets) cut to a standard size for that grade. For example, envelopes for automation-rate mailings should be constructed of paper weighing at least 16 lbs (minimum basis weight). The specific grade of 16 lb paper recommended for envelopes is defined as 500 sheets measuring 17 inches by 22 inches by 17 inches by 22 inches by 500 sheets). Recycled paper and card stock are compatible with postal automation if the materials satisfy the recommendations and the guidelines of the USPS. MDC STUDY GUIDE PAGE 5 CHAPTER 2 PROCESSING METHODS & CATEGORIES

30 Envelopes Envelopes and other letter-size containers sealed on all four edges must be made of paper with a minimum basis weight of 16 pounds. For business reply mail envelopes, the minimum basis weight is 20 pounds (DMM section S922). Cards Thickness, stiffness, and tear strength are the most important compatibility characteristics for cards. The minimum thickness is inch. The minimum required basis weight for card stock is 75 lbs or greater, with none less than lbs. The grain of cards should be oriented parallel to the long dimension of the card. Long-grain cards are less likely to jam postal automated equipment than are cards with the grain parallel to the short dimension of the card. Cards at automation rates must be inch thick if more than 4-1/4 inches high or 6 inches long, or both. When preparing postcards with perforations, it is recommended that the perf-tobridge ratio be 1:1. A typical perforation is from 0.1 inch to 0.2 inch. Vertical perforations in the center area of the card are not recommended. Sealing Letter-size mailpieces not in envelopes must be secured (tabbed) to prevent an open edge from jamming high-speed processing equipment. Standards for tabbing are based on basis weight of paper stock used and the location of the folded or bound edge. As an alternative to tabbing, the open edge of the length of the mailpiece may be continuously glued or spot glued. Tabs, wafer seals, cellophane tape, or permanent glue (continuous or spot) must not interfere with recognition of the barcode, rate marking, postage identification, or required address information. Cellophane tape is not acceptable within the barcode clear zone. Basis Weight The minimum basis weight standards vary, depending on the construction of the mailpiece. Folded Letter-Size Self-Mailers Folded edge must be on the bottom and parallel to the longest dimension (length) and the address of the mailpiece. Letter-Size Booklet-Type Mailpieces Booklets consist of bound sheets or pages. Sheets that are fastened with at least two staples in the manufacturing fold (saddle stitched), perfect bound, pressed-glued, or joined together by another binding method that produces an end where pages are attached together are considered booklets. Booklets are open on three sides before sealing, similar in design to a book. Spiral bindings are not machinable so booklets prepared with spiral bindings do not qualify for automation prices. Large booklets may be folded to letter-size for mailing if the final mailpiece remains uniform in thickness. The mailpiece must be tabbed (secured) with non perforated 1-1/2'' tabs, continuous or spot glue, or 1-1/2'' wide tape. MDC STUDY GUIDE PAGE 6 CHAPTER 2 PROCESSING METHODS & CATEGORIES

31 Postcards Require a minimum basis weight of 75 lbs or greater. Double postcards must have folded edge at the bottom. The top edge must be secured with two tabs, or spot glue one inch from both edges or by a continuous glue line. Incompatible Materials and Sealing Methods Coverings Certain materials are incompatible with postal automation because they cannot be transported at high speeds through mail processing equipment or they do not allow quality printing of a barcode on the mailpiece for optimal scanning. These materials include polywrap, shrink-wrap, spun-bonded olefin, and other plastic-like coverings. Certain types of coated papers should also be avoided if the coating is so glossy that it can prevent a postal-applied barcode from drying within 1 second. Consult a mailpiece design analyst about nonpaper coverings before you produce your mailpieces. Dark Fibers and Patterns Paper containing dark fibers or background patterns is not recommended because it can cause interference during MLOCR and BCS processing. The dark patterns can be mistaken for part of the address or barcode information. If you use such paper, make sure that the contrast ratio between the fibers (or pattern) and the background does not exceed 15 percent in the red and the green portions of the optical spectrum. Paper Types Envelope paper and paper material on other letter-size mailpieces such as folded self-mailers must have sufficient opacity (enough density) to prevent any printing on the inside of the mailpieces from showing through in the MLOCR read area or in the barcode clear zone. Avoid using textured paper paper with other than a smooth surface if the texture adversely affects print quality (that is, causes broken characters or smudged spaces). Because fluorescent paper can confuse the postage detector on postal facer-canceller machines, it's not suitable paper for automation mailings. Closures Because closures can jam equipment and damage mail during processing, don't use clasps, staples, string, buttons, or similar protrusions for closing letter-size automation pieces. And make sure that the pieces' edges are not notched, scalloped, or curved. MDC STUDY GUIDE PAGE 7 CHAPTER 2 PROCESSING METHODS & CATEGORIES

32 Physical Standards for Commercial Flats Address Font (applies to all commercial flats) Flats must have the address of the intended recipient, visible and legible, only on the side of the piece bearing postage. (Periodicals do not display postage and the address may appear on either side.) Use at least 8-point type for addresses on flats prepared without delivery point barcodes. Sans-serif font printed in all capital letters preferred. Individual characters in the address cannot overlap. Individual lines in the address cannot touch or overlap. A minimum inch clear space between lines preferred. Flats with Intelligent Mail barcode delivery point routing codes may have a minimum of 6- point type if addresses in all capital letters Barcodes must be at least 1/8 inch from any edge of the address side Retail and Nonautomation Flats Shape Must be rectangular, with four square corners, or with finished corners that do not exceed a radius of inch (1/8 inch). The length of a flat-size mailpiece is the longest dimension and height is the dimension perpendicular to the length. Maximum Weight: First-Class Mail 13 ounces Standard Mail less than 16 ounces Bound Printed Matter 15 pounds Uniform Thickness The contents must be uniformly thick so that any bumps, protrusions, or irregularities do not cause more than 1/4 inch variance in thickness (see DMM 301). You may exclude the outer edges of a mailpiece (1 inch from each edge) when the contents do not extend to the edges. Flexibility All flat-size pieces must meet flexibility criteria (see DMM 301) Mailpieces that do not meet flexibility standards or are not uniform in thickness pay: First-Class Mail Parcel Prices Standard Mail Flat-Nonmachinable or Parcel Prices Bound Printed Matter Parcel Prices MDC STUDY GUIDE PAGE 8 CHAPTER 2 PROCESSING METHODS & CATEGORIES

33 Automation Flats Automation or Commercial flats must also be uniform in thickness, and meet flexibility, deflection and polywrap criteria. Clasps, strings, buttons, or other protrusions, and also staples (unless the staples are properly used as a binding method) are prohibited. Flat-size pieces meeting the automation standards may qualify for automation or Periodicals machinable prices. Size, weight, thickness, polywrap, and flexibility and preparation standards vary by class of mail so refer to the Quick Service Guide or DMM for more information. Maximum Weight: First-Class Mail 13 ounces Periodicals 20 ounces Standard Mail 16 ounces Bound Printed Matter 20 ounces Address Placement Mailers must place the delivery address parallel or perpendicular to the top edge on the front or the back of the mailpiece and within the top half of the mailpiece. If there is a bound or folded edge, the address as read must be within the top half when the bound or folded edge is to the right. It cannot be upside down as read in relation to the top edge. First-Class Mail Automation Letters, Postcards and Standard Mail Automation Letters Maximum weight: 3.5 ounces. Heavy letter mail weighing more than 3 ounces must have a barcode in the address block and be prepared in a sealed envelope. Fee Annual presort mailing fee is required Eligibility Standards (See Chapter 1 for First-Class Mail and Standard Mail content eligibility Information.) First-Class Mail mailings of 500 or more addressed pieces Standard Mail mailings of 200 pieces or 50 pounds (Standard Mail letters that weigh more than 3.3 ounces but not more than 3.5 ounces pay piece/pound postage but receive a discount.) 100% Intelligent Mail barcoded, sorted, and marked as described below. All pieces must be automation-compatible. Pieces mailed at card prices and First-Class Mail letter prices must meet separate 500-piece minimums. All letter-size reply cards and envelopes (Business Reply Mail, Courtesy Reply Mail, and Meter Reply Mail) provided as enclosures must be automation-compatible. Each piece must also include a complete delivery address with correct ZIP Code or ZIP+4 Code. Addresses on all pieces must be updated within 95 days before mailing through a USPSapproved Move-Update method (e.g., ACS, NCOALink, or the appropriate ancillary service endorsement, except Forwarding Service Requested) MDC STUDY GUIDE PAGE 9 CHAPTER 2 PROCESSING METHODS & CATEGORIES

34 Addresses must be matched using a CASS certified process as follows: To Qualify For: You Must Verify: By This Date: Presorted 5 Digit ZIP Within 12 Months of Mailing Date Automation Complete Address Within 180 Days of Mailing Date Carrier Route Carrier Route Information Within 90 Days of Mailing Date Postage Payment and Documentation Payment Options include Precanceled Stamp, Meter Imprint, and Permit Imprint. Postage Statements: First-Class Mail PS Form 3600-R or approved facsimile Standard Mail Regular PS Form 3602-R, or approved facsimile Nonprofit PS Form 3602-N, or approved facsimile. PS Form 3553 must be retained for 1 year. Supporting Documentation is required unless correct price affixed to each piece or unless each piece is of identical weight and separated by price when presented for acceptance. Documentation must be generated by PAVE-certified software or printed in standardized format. Mail Preparation Mark each piece with First-Class Mail and AUTO in the postage area Pieces not marked AUTO must bear both the Presorted and PRSRT and First-Class Mail markings: Regular - Presorted Standard or PRSRT STD, Standard or STD Nonprofit - Nonprofit Organization or NONPROFIT ORG. or NONPROFIT For pieces bearing a delivery point Intelligent Mail barcode in the address block or on an insert visible through a window, AUTO not required. When preparing full trays, mailers must fill all possible 2-foot trays first; if there is mail remaining for the Presort destination, mailers must use a combination of 1-foot and 2-foot trays that result in the fewest total number of trays for that presort level. Barcoded tray labels are required and trays, in most cases, should be sleeved and strapped. Entry/Deposit Enter mailings at an acceptance point designated by USPS. For Standard Mail, destination discounts apply to mail prepared as prescribed by USPS and addressed for delivery within service area of destination BMC/ASF or SCF. MDC STUDY GUIDE PAGE 10 CHAPTER 2 PROCESSING METHODS & CATEGORIES

35 3 Work Share Incentives Mailing Services Depending on your needs and resources, there are four different approaches to using mail for your business. Retail Mailing Services With retail mailing services, you can easily send any quantity of mail at full postage rates without any special preparation. Address, add postage, and send it s fast and easy. Easy mail preparation Convenient drop-off options Expedited services available Discount Mailing Services With discount or bulk mailing services, you receive significant postage discounts for larger mailings by preparing and sorting your mail according to Postal Service guidelines and depositing it at designated locations. Reduced postage costs Many options available Promote your business and create a professional image Online Mailing Services From desktop to doorstep, online mailing services let you use your computer to upload or create postcards, letters and newsletters. Your mailpieces are printed, prepared, and delivered directly to your customers. No permit or mailing fees Discounted postage rates available Mail anytime from your desk Mail Service Providers Have a service provider pick up your mail. They combine it with mail from others and sort it using automation equipment to qualify for deeper discounts and share some of those savings with you. Easy way to access postage discounts Minimize the work you have to do A range of value added services are often available MDC STUDY GUIDE PAGE 1 CHAPTER 3 WORK SHARE INCENTIVES

36 Work Share Incentives Discount mail, or bulk mail, is your best option if you mail in volume. In order to claim these lower rates, you must have a minimum quantity and do some additional work to make your mail easier for the Postal Service to handle. In return for this additional work, the Postal Service shares some its savings in the form of postage discounts. By sharing some of the work the Postal Service shares some of the savings with the mailer. Hence the term work share discount. How Does It Work? Your discount depends on the mailing service you choose and the work you do. For example, if you want to mail 1,000 letter-sized flyers to everyone in your ZIP Code advertising your business's sale, if you mail the flyer as a First-Class mailpiece you will pay substantially more postage than if you mail the flyers using Standard Mail (however, First-Class delivery times are much faster than Standard Mail). Additional savings are available if you mail to everyone in your ZIP Code, add a barcode, sort them by carrier route, and deposit them at the Post Office that handles their delivery. The postage depends on the mailing service you choose and the characteristics of your mailpiece. For any discount mailing, you must do some of the work the Postal Service would otherwise do. The work you do, such as preparing, sorting, and entering your mailing, can lower your postage costs. Discounts for mail that can be processed on automation equipment tends to qualify for bigger discounts. These are referred to as Automation Rates, which are lower than Nonautomation Rates. As of January 2013, all Automation Rate presorted mailings must meet the USPS Basic IMb requirements, in order to qualify for those rates. Mailing Software is used to cleanse addresses, presort the mailing list and produce the required electronic documentation and format barcodes that are required on mail pieces and mail containers. Note: The USPS intends to require the use of a Full Service IMb barcode to qualify for automation discounts. However, an implementation date has not been approved by the PRC. The USPS has published information and an overview of the Full Service Requirements at: lfactsheet.pdf entmailfullservice.pdf Discounts are also offered when mailers are willing to enter mailings at facilities closer to the destination, referred to as Entry Discounts or Destination Discounts. MDC STUDY GUIDE PAGE 2 CHAPTER 3 WORK SHARE INCENTIVES

37 The discount is greater based on the density and volume of mail going into a specific Zip Code or ZIP Code Scheme. For example, pieces in a tray of mail that all goes to a single 5- digit ZIP destination will generally get a better (lower) rate than pieces in a mail tray that consists of pieces going to an assortment of ZIP codes. Work-share postage discounts from the USPS are available for both List Mailings (likely to be produced at an outside commercial supplier; where all pieces are identical) and Commingled Mailings (likely processed by a presort bureau; that include multiple weights and sizes). You must pay an annual mailing fee at each facility where you enter mail. Different mailing services may require separate fees. For example, First-Class Mail, Standard Mail, and Package Services require separate annual presort mailing fees. As of January 26 th 2014, mailers can have this annual mailing fee waived if 90% or more of the pieces they submitted in the prior year qualified as Full Service IMb pieces. This 90% threshold must be maintained throughout the year to avoid being charged the fee once it s been waived. Other optional aspects of a discount mailing, such as using permit imprints, business reply mail, or mailing endorsements, may require additional fees. Move Update The Move Update standard is a means of reducing the number of mailpieces in a mailing that require forwarding or return by the periodic matching of a mailer s address records with customer-filed change-of-address orders received and maintained by the Postal Service. Mailers who claim presorted or automation prices for First-Class Mail or Standard Mail must demonstrate that they have updated their mailing list within 95 days before the mailing date. One exception would be when a customer contacts a business and as a result is added to the list, the newly added address can ride with the list until the next cycle for update. The address can be added to the list only if the customer has requested services or literature or has purchased merchandise. The Move Update regulation does not apply to mail bearing an alternative address format, i.e., Postal Customer or Occupant, Householder, or Resident. This is because mail with an occupant or an exceptional address format is delivered as addressed to the physical location rather than the person. The Move Update standard is met when an address used on a mailpiece in a mailing for any class of mail is updated with an approved method and the same address is used in a commercial First-Class Mail or Standard Mail mailing within 95 days after the address has been updated. The Postal Service makes the following move update methods available to meet the needs of mailers at reasonable costs: Address Change Service (ACS) National Change of Address Linkage System (NCOALink) NCOALink MPE Ancillary Service Endorsements (ASE) except for Forwarding Service Requested. MDC STUDY GUIDE PAGE 3 CHAPTER 3 WORK SHARE INCENTIVES

38 NCOALink is considered proactive or pr ing because the mailer can receive address changes prior to mail creation and entry into the postal system. ACS, ASE and NCOALink MPE may be considered reactive or post-mailing solutions because essentially the mailpieces are created, addressed and entered into the postal system (or presort house system as with NCOALink MPE), and the mail owner is notified per various means of address changes later. Alternative Methods Alternative methods are available for First-Class Mail mailers and require USPS approval. These include the 99% Accurate Method and the Legal Restriction Method. Mailers should work with their post office for these methods. Certificate of Compliance Regardless of the Move Update solution used, the mailer's signature on the postage statement certifies that the mailing complies with all relevant standards, including the Move Update. A copy of Form PS6014 Certification of Move Update Compliance must be retained with the postage statement and other documentation for each mailing. Mailers may need to experiment with several options to determine the most effective method to update addresses in different mailing situations. Address Change Service (ACS) is a process for mailers to receive address changes electronically from the Postal Service to update their next mailing. Depending on a mailpiece's class and endorsement, mailers may also receive information on addresses that are undeliverable for reasons other than a customer move. There are two options: OneCode ACS or Full-Service ACS using the Intelligent Mail bar code and a mailer ID, or Traditional ACS used with a participant code and an appropriate ancillary service endorsement For either option, the Address Service Requested or Change Service Requested endorsements can be printed on First-Class Mail and are required for Standard Mail. To complete the Move Update process, the mailer must make the address changes received as a result of notifications. It is recommended that mailers retain address correction records for up to two years. Ancillary Service Endorsements (ASEs) allow the mailer to obtain, on request, the recipient s new (forwarding) address (if that recipient had filed a change-of-address - COA - order with the Postal Service) or the reason for nondelivery. Approved endorsements include Address Service Requested, Return Service Requested, temporary Return Service Requested and Change Service Requested (used with Address Change Service for First-Class Mail or as a stand-alone option for Standard Mail). MDC STUDY GUIDE PAGE 4 CHAPTER 3 WORK SHARE INCENTIVES

39 The endorsements are the same for all classes of mail, but the treatment and cost differ by class of mail. The mailer must pay any applicable charges for forwarding or return of the mailpiece, and a separate address notification charge. To complete the Move Update process, the mailer must make the address changes received as a result of the use of the approved ancillary service endorsement. It is recommended that mailers retain address correction records for up to two years.for more information on Ancillary Service Endorsements, please see Chapter 6. National Change of Address Linkage System (NCOALink) is an efficient pr ing method leveraging the most current USPS address information, including standardized and delivery point coded addresses, for matches made to the NCOALink file for individual, family, and business moves. Look for NCOALink solutions that provide 48-months of COA history to increase your opportunity to correct addresses. Benefits include that addresses are corrected before mailpieces are addressed and entered into the mail stream, maximizing the opportunity for a fast delivery of revenue-collection and revenue-generating mailpieces. This can often prevent the need to regenerate and/or r mailpieces. CASS-certified solutions with an NCOALink element enable mailers of letter-size and flat-size mailpieces to maximize their postal incentives for qualifying mailings, sometimes at lower prices than a presort company can offer. NCOALink solutions can be a very valid option for proactive move updates. The investment can be substantially less, especially comparing the super-low cost per correction against the overall costs associated with reactive (post-mailing) solutions that may include regeneration and r ing of mailpieces. Even considering the charge for every record submitted (versus only the correction fee when using ancillary endorsements), most savvy mailers would only want to submit the most accurate and concise mailpieces to the USPS. Mailers wouldn't want to give the USPS pieces that may be delayed or not delivered. Nor would they have wanted to waste the investment in creating, printing, folding, inserting and posting because of inaccurate addresses. Waiting for address correction notices from the USPS could negatively affect turnaround time for subsequent mailings. National Change of Address Linkage System Mail Processing Equipment (NCOALink MPE) solutions replaced FASTforward systems in January These solutions utilize the NCOALink system in conjunction with Multiline Optical Character Readers (MLOCR) to enable physical mailpieces to be updated against the USPS COA database. If a change of address is provided, the new address is printed directly on the mailpiece. Presort companies commonly offer the NCOALink MPE service. Mailers should consider the following: NCOALink MPE only contains 18 months of COA history. Therefore, if a particular recipient moved longer than 18 months ago, that new address would not be recognized, potentially delaying delivery. MDC STUDY GUIDE PAGE 5 CHAPTER 3 WORK SHARE INCENTIVES

40 Partnering with a presort company not only enables mailers to achieve some level of postal incentive (discount) but it also serves as a simple means of meeting the Move Update standard. Outsourcing What selection criteria should you use when all your outsourcing candidates appear equally qualified to perform your work and the pricing is close? How many times have you heard "they are all about the same so I went with my gut feeling"? Basically that means the vendors did a poor job of educating the customer or the customer didn't put enough effort into understanding the differences in the vendors. Either way, the decision becomes a gamble on future satisfaction. Selecting an Outsourcing Partner There should be two major considerations in selecting a document and mailing outsourcing company. The usual outsourcing price quotation is based on what your company is doing currently. A great outsourcing company will ask questions, understanding if you have requirements that are not being met and what you would like to improve. A great outsourcing company will produce two quotes - one that compares apples to apples and one with recommendations for improvements and related costs, demonstrating how to reduce production costs. Understand the values of the outsourcing company by listening to how they represent their company. Is the sales presentation based on the number of laser printers and mail machines or do they focus more on satisfied customers, quality, and solving your business problems. Is the outsourcing company flexible, willing to make changes as the customers' needs change or do you get the feeling you have to conform to them. Do their customers really speak highly about the relationship and provide strong recommendations? Has the outsourcing company honored all commitments on service and turnaround with their customers or does support drop after contracts are signed? Comparing Costs: In-House vs. Outsourcing If the primary goal of outsourcing is to reduce costs then why do most companies fail to accurately assess their internal costs? Certainly capital equipment investments in printers, mail machines, servers, supplies, maintenance contracts and operator salaries are easy numbers to obtain - in fact, most studies stop right there. What's wrong with this comparison? The outsourcing company, if properly managed, has the same hidden "soft" costs of running any production operation. Therefore, an accurate comparison to an outsourcing quotation should include true in-house costs, not just hard dollar line items in budgets. An example of soft costs rarely addressed is indirect labor cost, such as accounting, budgeting, interviewing, training, recruiting, payroll, benefits administration, mailroom management, temporary labor, IT support, building facilities management, vendor contract management, shipping and receiving, purchasing, and mail delivery. MDC STUDY GUIDE PAGE 6 CHAPTER 3 WORK SHARE INCENTIVES

41 What about hidden expenses that are buried in larger line items - warehouse storage space, delivery vehicle usage for mail delivery, various types of insurance, real estate and utility costs, and so on? All of these costs are included in outsource pricing. If the objective is a true, accurate comparison of in-house versus outsourcing, then be prepared to spend some time analyzing real internal costs. The best method in selecting an outsourcing company should not be derived from personal references or ones that you know or trust; you must investigate them thoroughly write a good contract and spell out all requirements prior to signing. The extra investment in looking beyond pricing and capabilities will pay off handsomely insuring a mutually successful outsourcing relationship. Rest assured, all outsourcing companies are not created equal. Reduce Cost The most obvious reason companies consider document outsourcing is to reduce capital investment and on-going expenses for laser printers, mail machines, software, and personnel - all of which are utilized on a part time basis. Strong outsourcing partners offer stateof-the-art production facilities allowing you to pay only for your company's usage. Concentrate on Core Competencies In a very competitive world, successful companies have become more focused and specialized than ever before. Sales and revenue growth are imperative - building fixed overhead is not. Today, many organizations recognize there is no competitive advantage in building and managing print and mail operations, especially when print and mail will diminish over time with the future transition to electronic documents; these are important details to cover when looking to outsource presort services, facility management operations, and international r ing services. Lack of Internal Expertise Few companies can afford to hire a full time staff to research and stay abreast of technology changes in laser printing, mail production software and equipment and postal regulations. Evaluating, purchasing and implementing electronic document technology raise the bar significantly. Thriving outsourcing companies have that specialized expertise - that's why they are successful. Continued technology advances, increasing wages for the best people and decreasing talent pool insure outsourcing will grow dramatically. Mail Service Providers You can get help with discount mailing from a business that specializes in designing, preparing, and sorting mail. These businesses, typically called mail service providers can help you with a single part of a discount mailing, or you can hire them to handle the entire mailing, from creation to mail entry. Mail service providers can help you accomplish some or all of the following: Purchase or rent an address list. Manage your address database. Design and print your mailpieces. Sort your mailpieces. Reduce your postage rate. Enter your mail into the mail stream. MDC STUDY GUIDE PAGE 7 CHAPTER 3 WORK SHARE INCENTIVES

42 Planning a Discount Mailing Several steps are involved in the discount mailing process. A successful discount mailing requires careful consideration of each step. Choosing a Class of Mail - Which mailing class you choose depends on the shape, weight, and content of your mail, along with speed of delivery. Choosing a Postage Payment Method - The Postal Service offers three ways for you to pay for and apply postage to your mailpieces; Postage Meter imprint, Permit indicia or Precancelled Stamps. Preparing Your Mail - Machinable, nonmachinable, and automation are the three ways the Postal Service classifies how mailpieces are prepared. These classifications are based on the ability of your mailpiece to be processed on Postal Service equipment. Sorting Your Mail - Sort your mail according to Postal Service standards. Entering Your Mail - The minimum requirement is to enter your mail at the business mail entry unit (BMEU) or Post Office where you hold a mailing permit. You can receive additional discounts by transporting your mail to postal facilities closer to where it will be delivered. These are referred to as Destination Entry Discounts. After you make these choices, prepare your mailpieces, then sort them by Postal Service standards, and enter your mailing at a postal facility. For each step, you will need to complete the minimum level of work required by The Postal Service. You may also choose to complete higher levels of work to receive greater postage discounts. To qualify for bulk or commercial volume discounts, you must mail a minimum number of pieces: 500 pieces for First-Class Mail 200 pieces (or 50 lbs of mail) for Standard Mail 50 pieces for Parcel Select 50 pieces or 50 lbs for Parcel Select Non-presort 200 pieces or 50 lbs for Parcel Select Lightweight 300 pieces for Presorted or Carrier Route Bound Printed Matter 300 pieces for Library Mail 300 pieces for Media Mail In some cases, the characteristics of your mailpieces will determine which rates and discounts are available to you. MDC STUDY GUIDE PAGE 8 CHAPTER 3 WORK SHARE INCENTIVES

43 4 Addressing and Automation Addressing Guidelines Addresses should be typewritten or machine printed in dark ink on a light background using uppercase letters. Except for the hyphen in the ZIP+4 Code, all punctuation is omitted. All lines of the address are formatted with a uniform left margin. When using a foreign address, always place the country name in capital letters by itself on the last line. The Delivery Address Line (the line directly above the city, state, and Zip Code) and the Last Line of addresses (City, State, and Zip Code) output to the mailpiece should be complete, standardized, and validated with the ZIP+4 File and City State File, respectively. A standardized address is one that is fully spelled out, abbreviated by using the Postal Service standard abbreviations or as shown in the current Postal Service ZIP+4 File. The Postal Service defines a complete address as one that has all the address elements necessary to allow an exact match with the current ZIP+4 and City State Files to obtain the finest level of ZIP+4 and delivery point codes for the delivery address. A complete address is required on mail mailed at automation rate whether completed internally or externally. Address Management Software Products & Services CASS (Coding Accuracy Support System) Certification ensures compliance with postal regulations as it pertains directly to addressing standards. The CASS process improves the accuracy of delivery point codes, ZIP+4 codes, 5-digit ZIP Codes, and carrier route codes on mailpieces. CASS provides a common platform to measure the quality of address matching software and to diagnose and correct software problems. Any mailing claiming at an automation price must be produced from address lists properly matched and coded with CASS-certified address matching methods. Addresses must be matched using a CASS certified process as follows: To Qualify For: You Must Verify: By This Date: Presorted 5 Digit ZIP Within 12 Months of Mailing Date Automation Complete Address Within 180 Days of Mailing Date Carrier Route Carrier Route Information Within 90 Days of Mailing Date Delivery Point Validation (DPV) identifies whether a ZIP+4 coded address is currently represented in the USPS delivery file as a known address record. The DPV product allows users to confirm known addresses as well as identify potential addressing issues that may hinder delivery. Correcting potential addressing issues can reduce the amount of Undeliverable-As- Addressed (UAA) pieces, which in turn result in more efficient mail processing and delivery. The DPV Product Confirms: The known address has verifiable primary and secondary data. The known address has verifiable primary but not secondary data. The address cannot be verified as a known address. The DPV product does not append any missing data or correct any address elements. MDC STUDY GUIDE PAGE 1 CHAPTER 4 ADDRESSING AND AUTOMATION

44 Locatable Address Conversion System (LACSLink) is a secure dataset of converted addresses that primarily arise from the implementation of 911 emergency response system, which commonly involves changing rural-style addresses to city-style addresses. The LACSLink product also contains existing city-style addresses that have been renamed or renumbered. Address Element Correction (AEC and AECII) AEC is a quality process developed by the USPS with industry support. AEC focuses on inaccurate addresses, specifically those deliverable addresses that can t be matched to a USPS ZIP+4 code using commercially available CASS certified address-matching. If an address is missing an element, the software may lack sufficient information to determine the correct or most accurate match to the ZIP+4 product and, therefore may not provide a ZIP+4 code. After an address goes through the AEC process and is not resolved, it becomes a candidate for AECII. AECII is an enhancement to the existing AEC service, which identifies and corrects bad addresses using a complex computer program. Bad addresses that cannot be resolved using the AEC are submitted, via AECII, to delivery offices for review and resolution by the same people who deliver the mail for you every day. When USPS delivery personnel are able to identify and correct address errors, or to identify addresses that do not exist, address quality is improved. Requirements The entire address should be contained in an imaginary rectangle known as the Optical Character Reader (OCR) clear area extends from 5/8" to 2 3/4" from the bottom of the mailpiece, with 1/2" margins on each side, and Return Address area positioned in the upper right corner. The barcode clear zone is positioned 5/8" from the bottom, and extends 4 3/4" from the right edge of the mailpiece. This area is reserved to display the corresponding Intelligent Mail barcode (IMb), typically applied by the Postal Service or licensed vendor. MDC STUDY GUIDE PAGE 2 CHAPTER 4 ADDRESSING AND AUTOMATION

45 Uppercase letters are preferred on all lines of the address block. Format all lines of the address with a uniform left margin. Address characters must not touch and should be equally spaced. All lines of the address should be parallel to the bottom of the envelope. Be sure to include all pertinent information such as the directional code, apartment, floor, and suite number. Extraneous (non-address) printing that appears in the OCR read area should be positioned above the delivery address line and as far away from the address block as possible. The Attention Line is placed above the Recipient Line, that is, above the name of the firm to which the mailpiece is directed. Dual Addresses Eliminate dual addresses on the output mailpiece, if possible, although mailer files may maintain both mailing and physical addresses. However, if dual addresses are used, place the intended delivery address on the line immediately above the city, state, and ZIP+4 code. This normally is the Post Office Box address. The other address must be placed on a separate line above the Delivery Address Line. The ZIP+4 code used must be the correct code for the delivery address on the line directly above the city, state, and ZIP Code. MDC STUDY GUIDE PAGE 3 CHAPTER 4 ADDRESSING AND AUTOMATION

46 Readability An automation readable mailpiece is defined as one that contains an accurate, correctly formatted, complete address or ZIP+4 IMb and is readable on an OCR and/or a barcode sorter (BCS). For additional information on designing mail for OCR/BCS readability, we suggest you obtain a copy of Publication 28, Postal Addressing Standards. Required Use of Return Addresses Sender s domestic return address must appear legibly on: Mail of any class bearing a printed ancillary service request or an ancillary service request embedded within an Intelligent Mail barcode (IMb) Official Mail Mail paid with precancelled stamps (except Standard Mail pieces weighing 13 ounces or less and bearing a mailers postmark in accordance with ) Matter bearing a company permit imprint Priority Mail Periodicals in envelopes or wraps Package Services (except unendorsed Bound Printed Matter) Registered Mail Insured Mail Collect on Delivery (COD) Mail Certified Mail if a return receipt is requested Express Mail if a return receipt is requested Detached Address Labels (DALs) International Addressing Requirements Due to heightened security, many foreign postal administrations require a complete return address (Your name and address, including ZIP Code and country of origin) be shown in the upper left corner of the address side on all mail, and complete delivery address in roman letters and Arabic numerals using the following format: Line 1: NAME OF ADDRESSEE Line 2: STREET ADDRESS OR POST OFFICE BOX NUMBER Line 3: CITY OR TOWN NAME, OTHER PRINCIPAL SUBDIVISION (such as PROVINCE, STATE, or COUNTY) AND POSTAL CODE (IF KNOWN) Note: In some countries, the postal code may precede the city or town name. Line 4: FULL COUNTRY NAME Examples of correctly formatted foreign addresses are as follows: MS JANE DOE MR W B KORN 117 RUSSELL DRIVE APARTADO 3067 LONDON WIP 6HQ PUERTO VALLARTA JALISCO GREAT BRITAIN MEXICO SUSAN DIETRIC-FISCHER HARTMANNSTRASSE BONN 1 GERMANY Canada Only On mail to Canada, there must be two spaces between the province abbreviation and the postal code. For the most current international mailing requirements and standards, please visit MDC STUDY GUIDE PAGE 4 CHAPTER 4 ADDRESSING AND AUTOMATION

47 Window Envelopes and Inserts To ensure successful automated processing, design your window envelopes and their inserts so that the entire address and postal bar code (when included) appear in the window area during the full movement of the insert Tap Test. While there is no minimum window size requirement, the address must pass the Tap Test to obtain automation rate discounts. Address/Window Clearance For MLOCR processing, at least 1/8 of clearance (1/4 of clearance is preferred) must be maintained between the address and the edges of the window when the insert is moved to its full limits inside the envelope. MLOCRs need this clear space to distinguish the address from the edge of the window or shadows cast near the address by the edge of the window. Non-address information must not show in the window clearance area. Excessive Address Insert Shift Vertical Address Insert Shift Test To test the vertical insert shift of the address within a window, do the following: Check that a clear space of at least 1/8 is maintained between the top of the recipient line in the address and the top edge of the window without tapping the mailpiece. Tap the mailpiece on a flat horizontal surface on its bottom edge to jog the insert as far down into the envelope as it can go. Check that a clear space of at least 1/8 is still maintained between the bottom of the Post Office, state, and ZIP Code line of the address and the bottom edge of the window. Horizontal Address Insert Shift Test To test the horizontal insert shift of the address and window, do the following: Tap the mailpiece separately on its left and right edges to jog the insert as far to the left and right as it can go. As each side is tapped, check that a clear space of at least 1/8 is still maintained between the left and right edges of the address and the left and right window edges. Barcode/Window Clearance As with addresses, Intelligent Mail barcodes printed on inserts including barcodes printed as the top or bottom line of the delivery address block must maintain the following minimum clearances. At least 1/8 from the left and right edges of the bar code and the edges of the window when the insert is moved in those directions. At least 1/25 from the top and bottom edges of the window opening when the insert is moved in those directions. This 1/25 minimum clearance is also needed between the top and bottom of the barcode and any other printing. MDC STUDY GUIDE PAGE 5 CHAPTER 4 ADDRESSING AND AUTOMATION

48 Vertical Barcode Insert Shift Test To test the vertical insert shift of the barcode and window, do the following: If the barcode is the top line of the address block, check that a clear space of at least 1/25 is maintained between the top of the barcode and the top edge of the window without tapping the mailpiece. Tap the mailpiece on a flat horizontal surface on its bottom edge to jog the insert as far down into the envelope as it can go. Check that a clear space of at least 1/25 is still maintained between the last line of the address and the bottom edge of window. If the barcode is the bottom line of the address block, check that a clear space of at least 1/25 is still maintained between the bottom of the barcode and the bottom edge of the window after tapping. Horizontal Barcode Insert Shift Test To test the horizontal insert shift of the barcode and window, do the following: Tap the mailpiece separately on its left and right edges to jog the insert as far to the left and right as it can go. As each side is tapped, check that a clear space of at least 1/8 is still maintained between the left and right edges of the barcode and left and right window edges. Excessive Barcode Insert Shift Insert Material Like envelope paper, insert material must have sufficient opacity to prevent any printing on the inside of the mailpiece from showing through in the MLOCR read area or in the barcode clear zone. Window Coverings Open or covered windows may be used for addresses and address block barcodes. Windows must always be covered in automation-rate mailings of pieces that weigh more than 3 ounces. Material for covered windows must be clear or transparent (low-gloss polyclear materials are best) and securely attached on all edges. Cellophane, glassine, and polystyrene are acceptable materials. All window coverings must be stretched tight and be free of wrinkles, streaks, fogging, colors, and other conditions that can obscure the address or barcode during processing. All address and barcode information, as read through the window, must satisfy the following minimum reflectance and contrast guidelines: A print contrast ratio (PCR) equal to or more than 40 percent in the red and green portions of the optical spectrum is necessary for an MLOCR to recognize address information. A print reflectance difference (PRD) equal to or more than 30 percent in the red and the green portions of the optical spectrum is necessary for a BCS to recognize IMb s. Because glassine is somewhat opaque (less transparent) compared with other window-covering materials, addresses read through glassine must produce a slightly higher PCR of 45 percent. The minimum PRD for barcodes read through glassine is 30 percent the same minimum required for other window-covering material. MDC STUDY GUIDE PAGE 6 CHAPTER 4 ADDRESSING AND AUTOMATION

49 Window Clear Space Address windows should be no lower than ½ from the bottom edge of the envelope and may extend 1/8 into the bar code clear zone. NCOALink MPE In mailings of First-Class Mail and Standard Mail, any envelope whose window intrudes into the bar code clear zone is not eligible for NCOALink MPE processing to meet the move update standard. Check with your local mailpiece design analyst or business mail entry unit for more guidelines. Barcode/Label Clearance The following minimum clearances for the IMb, when applied to address labels, are the same as the clearances required for barcoded inserts in window envelopes. At least 1/8 between the left and right of the bar code and the left and right edges of the label or other printing. At least 1/25 between the top and bottom of the bar code and the top and bottom edges of the label or other printing. Address Labels Automation Addressing General Standards: For successful processing and delivery point barcoding by MLOCRs, the addresses on letter mail should be machine-printed, with a uniform left margin, and formatted in such a way that an MLOCR will be able to recognize the information and find a match in its address files. A complete address is required so that an MLOCR can delivery point barcode the piece for the most precise point of delivery. In this way, you greatly improve the deliverability of your mailpiece. An MLOCR and the ZIP+4 database are better able to identify the correct delivery address the first time that the mailpiece is processed. For faster, more accurate processing, include in the delivery address the street designators (for example, BLVD or DR); Pre or Post directionals (for example, NE or SW); the apartment, suite, or room number; and the ZIP+4 code. MLOCRs can read a combination of uppercase and lowercase characters in addresses. Even though MLOCR enhancements now allow effective reading of punctuation in addresses, it still is suggested that punctuation be omitted when possible. Whether or not punctuation is included in the address, the ZIP+4 code format is five digits, a hyphen, and four digits (for example, ). The code eliminates guesswork about the intended destination. For automation rates, the Postal Service requires mailers to prepare their mailings with addresses that have been verified and corrected using CASS-certified address matching software or processes. For assistance with mailpiece design questions and review of your mailpieces, please contact a Mailpiece Design Analyst by calling the MDA Support Center at or sending an to mda@usps.gov. The MDA Support Center hours of operation are Monday through Friday, between 7:00 am and 5:00 pm CST. MDC STUDY GUIDE PAGE 7 CHAPTER 4 ADDRESSING AND AUTOMATION

50 Address Block Location Letter-size automation specifications are as follows: The MLOCR read area requires only ½ margins on the left and right sides. The entire address (except the optional lines above the recipient line) should appear within an imaginary rectangle that extends from 5/8 to 2 ¾ inches from the bottom edge of the mailpiece, with ½ margins on the left and right sides. This is the requirement for any lettersize mailpiece. For pieces longer than 10 ½, the address should begin no more than 9 ¾ from the right edge. Mailpiece Clear Zones and Free Space The following illustration shows all the reserved areas or clear zones where content is restricted. The Multiline Optical Character Reader (MLOCR) read area is the area required for displaying the delivery address block for a letter size mailpiece measuring up to 10 ½ long. The diagram below includes mailpiece clear zones for pieces measuring more than 10 ½ long. MDC STUDY GUIDE PAGE 8 CHAPTER 4 ADDRESSING AND AUTOMATION

51 Extraneous (non-address) printing in the MLOCR read area can confuse MLOCR scanners and prevent them from interpreting the address information correctly. This can cause them to reject the mailpiece. Non-address printing such as company logos, advertising, and die cuts should not be placed within the MLOCR read area. If it is, the lowest point must be above the delivery address line. In other words, within the MLOCR read area, you should keep the space on either side of and below the delivery address line clear of all printing. Non-address Printing Space (unshaded Area) Return Address You should always keep the MLOCR read area clear of return address information. In addition to being positioned at least 2 ¾ above the bottom edge of the mailpiece, the return address should occupy an area in the far upper left corner of the mailpiece no longer than 50 percent of the length of the mailpiece. The return address should be printed in a type size smaller than the type size used in the delivery address. Barcode Clear Zone After reading the address, the MLOCR prints the appropriate delivery point barcode in the lower right corner of the mailpiece. This area, known as the Barcode Clear Zone, extends 5/8 inch from the bottom and 4 ¾ long from the bottom right corner. To ensure that the barcode is readable by barcode sorters, the barcode clear zone must be clear of all printing, markings, graphics, and colored borders. Certain types of coated paper should be avoided. Printing Guidelines Type Style Some type styles (also known as typefaces) have serifs, which are short lines that decorate the ends of letter strokes. Because typefaces that have no serifs (called "sans serif" faces) are more easily read by MLOCRs, these styles are recommended for printing the delivery address. Display Type Typefaces (like Helvetica) with specific characteristics (like Helvetica normal 12 point) are called fonts. Dot matrix characters can be read by MLOCRs if the dots that form each character touch one another or are not separated by more than MDC STUDY GUIDE PAGE 9 CHAPTER 4 ADDRESSING AND AUTOMATION

52 Unacceptable Type Styles: Bold Italic Extended Stylized Condensed Script Type Sizes MLOCRs can recognize type sizes between 8 and 18 points. A point is a printing unit equal to about 1/72. The following point sizes are recommended for maximum MLOCR recognition: 8 Points (Minimum) 10 Points (Preferred) 12 Points (Preferred) 18 Points (Maximum) If you use type as small as 8 points for an address, you should print the address in all uppercase characters to satisfy the MLOCR's minimum height and width requirements. In some type styles, 8-point uppercase characters do not meet the minimum height requirements of MLOCRs. If you use 18-point type, you should check that the characters are not taller than the maximum size shown on Notice 67, Automation Template. Some styles of 18-point type are larger than others. Address Block Skew If the address block is slanted too much, the MLOCR might not be able to see a clear vertical space between each character. For this reason, the address should not be slanted (or skewed) more than 5 degrees relative to the bottom edge of the mailpiece. This standard is especially important for the proper application of address labels. Interfering Print You should avoid using preprinted forms, labels, or inserts containing lines (such as dotted rules for address placement), outline boxes (such as borders for address placement), or prompting words (such as "TO:") in the address area. These non-address elements can interfere with MLOCR recognition of the delivery address. Print Quality Print quality is one of the most important factors for successful MLOCR processing. Address characters should be clean, sharp, dark, and uniformly printed. Smudges, fill-ins, voids (inking gaps within characters), and splatter (extraneous ink outside character boundaries) can adversely affect MLOCR processing. The printer, typewriter, or ink jet printer should be checked and cleaned often to ensure crisp, clear printing. MDC STUDY GUIDE PAGE 10 CHAPTER 4 ADDRESSING AND AUTOMATION

53 Reflectance and Print Contrast The ability of paper to reflect light is also an important factor for MLOCR recognition. The surface containing the address whether an envelope, card, label, or insert should be light enough in color to reflect a sufficient amount of light to the MLOCR's scanner. Although a white background is preferred, pastels and many other light colors are acceptable. You can check background reflectance with a USPS envelope reflectance meter or its equivalent. A reading of at least 50 percent in the red portion and 45 percent in the green portion of the optical spectrum is desirable. Paper stocks used for envelopes and cards as well as inks used for addresses and any other printing on the outside of letter-size mail should not be fluorescent or phosphorescent. The glow from such paper stocks and inks can cause malfunctions during mail processing. For window envelopes and labels, the MLOCR works best if the reflectance of the insert or label is about the same as that of the envelope. Some envelope inserts (checks, for example) are printed with a background pattern that can confuse the MLOCR. Designs and printing in the background might appear attractive to the human eye, but they can be mistaken for part of the address information by the MLOCR. For the greatest contrast and best performance on MLOCRs and BCSs, the address should be printed in black ink on a white background. Several color combinations are also acceptable if the ink is dark enough and the background is light enough. Resolve any issues about print, design, and color with your mailpiece design analyst before you produce your mailpiece. We can work with you to design an effective mailpiece and ensure quality processing. Print Contrast Ratio (PCR) is the contrast between the background and the printed address characters. This contrast can be measured with a USPS envelope reflectance meter or its equivalent. A PCR of at least 40 percent in both the red and the green portions of the optical spectrum is needed. Reverse printing (white or light-colored characters on a dark background) is not MLOCR-readable and therefore not acceptable. The inks used for addresses and any other printing on the outside of letter-size mail should not be fluorescent or phosphorescent. The glow from such inks can cause malfunctions during mail processing operations. Background patterns that appear solid to the human eye but are printed in a halftone screen can interrupt MLOCR recognition. The dot structure in halftone screenings should be at least 200 dots (or at least 100 pairs of lines) per inch or at least a 20 percent screen (dot size). Other background patterns with a PCR greater than 15 percent in the red and the green portions of the optical spectrum should not be used in the MLOCR read area. MDC STUDY GUIDE PAGE 11 CHAPTER 4 ADDRESSING AND AUTOMATION

54 Barcodes Barcoding is also an important aspect of mailpiece design. Because there are no MLOCR readability requirements for barcodes, you have more latitude in selecting colors, type styles, and the location for address printing if you barcode your mail. To receive automation discounts, your letter-size mailings must be 100 percent delivery point barcoded with an IMb. Nonbarcoded pieces enter the same mail stream as a nonautomation presorted mailing. Intelligent Mail barcode (IMb) In 2003, the United States Postal Service (USPS) published the Intelligent Mail Corporate Plan. This plan identified several key strategies including: Uniquely Identify Mail and Mail Aggregates Develop and Deploy an Enabling Infrastructure Enhance Address Quality This plan provided the following vision: To capitalize on the value of information about mail, the Postal Service and its customers will place an information-rich code on all mail, aggregates of mail, and business forms, enabling end-to-end visibility into the mail stream. In support of this OneCode Vision, the Postal Service, in partnership with the mailing industry, developed the Intelligent Mail barcode (IMb) (formally known as the 4-state Customer Barcode). It is the next generation in the evolution of Postal Service barcode technology. It offers a more effective alternative to existing barcodes by increasing the amount of information that is present on letter and flat mailpieces, allowing for expanded tracking capability, and creating greater visibility into the mail stream. OneCode Confirm is a free service to Full-Service IMb mailers. The IMb is a height-modulated barcode that encodes up to 31-digit string of mailpiece data into 65 vertical bars. These bars may be present in one of four possible states: full bar, ascender, tracker, and descender. The IMb is slightly longer than the retired 11-digit POSTNET barcode, and it offers mailers certain flexibility in choosing the height and width of the barcode. Due to mailpiece real estate concerns and barcode print quality, some mailers expressed an interest in a shorter-height IMb. Evaluations were conducted with letter mail that allowed the Postal Service to reduce the height requirement by 16.3% for the September 2006 offering. Consequently, the read-rate and dimension analysis supported by an extensive flats test was used as a decision-making tool in determining the feasibility of a revised IMb with further reduced vertical dimensions. As a result of this, in July 2007, the Postal Service published a new Specification for the IMb with even shorter bar heights with the full bar ranging in height between and The IMb is used to sort and track letters and flats. Unlike the retired POSTNET barcode that only contained the delivery point ZIP Code, the IMb contains additional fields like the Service Type Indicator, Sequence Number and Mailer ID which expands your ability to track individual pieces and provides greater visibility into the mail stream. With the IMb, you can request services like MDC STUDY GUIDE PAGE 12 CHAPTER 4 ADDRESSING AND AUTOMATION

55 tracking and address correction all in one barcode. The IMb allows you to number your mail so that you can uniquely identify each mail piece in your mailing. It contains a Mailer ID Field that allows you to obtain data about your mailings. The USPS began requiring the use of the IMb for automated discounts effective January 2013 with intent to achieve the following initiatives: Continue earning lowest postal rates Better customer intelligence Free Address Change Service Visibility into the mail stream/tracking More effective returned mail processing Better scan rates and improved deliverability Better looking mail pieces (fewer barcodes) Delivery Confirmation Access to new services Intelligent Mail barcodes facilitate feedback about the mailpiece, handling units and containers, and allows for USPS service performance measurement, making it possible to use the mail in a much smarter, more efficient manner. The use of Basic or Full-Service IMb is required to qualify for automation prices for First-Class Mail postcards, letters, and flats, Standard Mail letters and flats, Periodicals letters and flats and Bound Printed Matter flats. Barcode Placement If you apply an IMb to your outgoing letter mail, you may print the barcode in the lower right corner or as part of the address block. MLOCR-applied barcodes are always printed in the lower right corner of the mailpiece. Address Block Barcoding With this method, the barcode is not subject to the strict positioning requirements of the barcode clear zone. The address block barcoding option is the most desirable method of choice. If you desire printing the IMb as part of the address block, you must locate the barcode within the Address Block Barcode Read Area, as illustrated below. MDC STUDY GUIDE PAGE 13 CHAPTER 4 ADDRESSING AND AUTOMATION

56 Barcode Clearances - An address block barcode requires certain clearances relative to any printing and the edges of the window or address label. This allows the barcode sorter to successfully locate the barcode. A clear space of 1/25 is required above and below the barcode and 1/8 is required to the left and the right of the barcode. You may not apply the IMb anywhere between the recipient line and the city, state, and ZIP Code line of the address (that is, do not place the barcode between any lines of the delivery address). Conventional Lower Right Corner Delivery point barcodes printed in the lower right corner of letter mail must be positioned to meet specifications. The first (leftmost) bar of the barcode should appear between 3 ½ and 4 ¼ from the right edge of the mailpiece. Barcode Printing & Background Reflectance The area of the mailpiece where the barcode is to be placed (address block or lower right corner) should be uniform in color and produce a minimum reflectance of 50 percent in the red portion and 45 percent in the green portion of the optical spectrum, when measured with a USPS envelope reflectance meter or its equivalent. Although a white background is preferred, pastels and other light colors are acceptable. The mailpiece should not be fluorescent or phosphorescent because the glow can cause malfunctions during mail processing. Print Reflectance Difference The BCS responds to the difference between light reflected from the printed barcode and the background. This difference is defined as print reflectance difference (PRD). A PRD of at least 30 percent in the red and the green portions of the optical spectrum is necessary for reading IMb s. As with MLOCRs, BCSs respond best when the barcode is printed in black ink on a white background. Other color combinations are acceptable if the minimum PRD of 30 percent exists for the printed barcode. Refer questionable color combinations to your mailpiece design analyst for testing. Application IMb s can be applied by the mailer, presort house, or by the Postal Service. Mailers would apply an IMb as their address is created by their addressing software. Presort houses will apply the IMb when they process and sort mail. The Postal Service can apply the IMb either in the pre-process or post-processing stages of mail processing. Assistance Postal Service Mailpiece Design Analysts (MDAs) and others in business mail acceptance can help you meet USPS guidelines and determine the automation compatibility and readability of your mailpieces. Also, many companies employ specialists to provide this service to their companies. MDAs also take a more proactive approach: they'll help you create the mailpiece from the beginning of the design process. These analysts have a thorough understanding of all postal automated processing equipment and mailpiece design standards. Account Managers and postal business center personnel also can help you with these guidelines and answer your questions about postage discounts for automation-compatible mail. MDC STUDY GUIDE PAGE 14 CHAPTER 4 ADDRESSING AND AUTOMATION

57 Decoding the Intelligent Mail Barcode There are two formats of the Intelligent Mail barcode. The format you use depends upon the Mailer ID assigned to you by the USPS. Barcode ID The barcode identifier is a 2-digit field that is reserved to specify the presort makeup. If you currently do not use an Optional Endorsement Line, you will simply populate this field with 00. Service Type Identifier Used to request special services such as tracking or address correction. If you are not requesting special services on the mail piece, you should use one of the following codes depending upon the class of mail to which the IMb is applied: 700 for First-Class Mail; 702 for Standard mail; 704 for Periodicals; 706 Bound Printed Matter. Mailer ID (MID) This is an ID that the USPS will assign to you to use in your Intelligent Mail barcodes. The USPS will issue you a 9-digit or a 6-digit Mailer ID based on your mail volume. Mailer IDs are obtained by making a request from the subscription process helpdesk supporting your product or service. Subscribers of OneCode Confirm should call and Confirmation and Extra Services customers should call OneCode ACS subscribers should call Customers participating in USPS testing initiatives or have an immediate need for using the Mailer ID should contact the PostalOne! Help Desk at Sequence or Serial Number You can use this field to uniquely identify your individual mail pieces. If you are assigned a 9-digit MID, you will have 6-digits to identify and number your mailpieces. If you are assigned a 6-digit MID, you will have 9 digits to identify and number your mail pieces. Delivery Point ZIP Code Populate this field with delivery point ZIP Code of the mail piece. Full-Service Automation Option Access to full-service automation option benefits requires the use of an IMb to uniquely identify each mailpiece. In addition to the automation standards, all pieces entered under the full-service option must individually meet the automation requirements for automation prices according to their class and shape. MDC STUDY GUIDE PAGE 15 CHAPTER 4 ADDRESSING AND AUTOMATION

58 First-Class Mail, Periodicals, and Standard Mail letters, as well as flats and Bound Printed Matter flats meeting eligibility requirements for automation or carrier route prices, except for Standard Mail ECR saturation flats or Standard Mail ECR letters paying ECR flats prices, are eligible for the full-service automation option. All pieces entered under the full-service automation option must: Bear a unique Intelligent Mail barcode. Be part of a mailing using unique Intelligent Mail tray labels on all trays and sacks. Be part of a mailing using unique Intelligent Mail container barcodes on all destination-entry pallets and other containers prepared under 8.0 or as part of a customer/supplier agreement. A customer/supplier agreement is authorized with a service agreement and signed by the mailer, the USPS District Manager, Customer Service, and the USPS Processing and Distribution Center Manager. The service agreement contains provisions regarding mailer and USPS responsibilities. Be part of a mailing using an approved electronic method to transmit a postage statement and mailing documentation to the PostalOne! system. Be scheduled for an appointment through the Facility Access and Shipment Tracking (FAST) system when deposited as a DBMC, DADC, or DSCF drop-shipment. MDC STUDY GUIDE PAGE 16 CHAPTER 4 ADDRESSING AND AUTOMATION

59 5 Extra Services Extra services are enhancements that, for a fee in addition to postage, provide greater security and accountability for mail, convenience to the sender, or improved handling. Extra services are not available with Periodicals. Not all extra services are available for all classes of mail, and only certain services may be combined for the same mailpiece. Certificate of Mailing provides evidence of mailing and this official record shows the date mail was accepted. Certificates of mailing furnish evidence of mailing only. May be combined with Parcel Airlift Services (PAL), and Special Handling. Note: Form 3817 for individual pieces only; Form 3606 for identical weight mailings only or a USPS-approved facsimile must be used. Certificate of mailing is only available at the Postal Service. The Postal Service does not keep a copy. Certificate of Mailing is compatible with: Priority Mail First-Class Mail First-Class Package Service Parcel Select * Parcel Select Lightweight * Standard Mail * Bound Printed Matter Library Mail Media Mail * Form 3606 only Certified Mail Find out when your item was delivered or delivery was attempted. Requires the signature of the recipient. Can be purchased online or at the Postal Service. Present for mailing to a Postal Service employee to get a postmarked mailing receipt. Combine with a Return Receipt to see the signature of the person who accepts the package. Certified Mail is compatible with: Priority Mail First-Class Mail First-Class Mail Package Service Additional Combined Services: Return Receipt 1 Restricted Delivery 1 Adult Signature Required 2 Adult Signature Restricted Delivery 2 Not available with Adult Signature With Priority Mail only 1 Not available w/adult Signature 2 With Priority Mail only MDC STUDY GUIDE PAGE 1 CHAPTER 5 EXTRA SERVICES

60 Collect on Delivery (COD) The Postal Service collects from the recipient the postage and price of an item that had not been prepaid and provides the amount collected to the mailer, not to exceed $1,000. Can be purchased online or at the Postal Service. COD pieces must be presented to a Postal Service employee. COD is compatible with: Priority Mail Express (1-Day and 2-Day only) Priority Mail First-Class Mail Standard Post Parcel Select Bound Printed Matter Library Mail Media Mail Additional Combined Services: USPS Tracking* Insurance Registered Mail Returned Receipt Signature Confirmation* Special Handling Hold for Pickup (under ) * Not available with Priority Mail Express COD. Restricted Delivery Directs delivery only to addressee or addressee's authorized agent. Can be purchased online or at Post Office depending upon the class of mail chosen. Restricted Delivery is compatible with: Priority Mail 1 First-Class Mail 1 First-Class Package Service 1 Standard Mail (parcels only) 2 Standard Post 3 Parcel Select 3 Parcel Select Lightweight 2 Bound Printed Matter 3 Library Mail 3 Media Mail 3 1 If purchased with Certified Mail, COD, insurance over $ or Registered Mail. 2 If purchased with bulk insurance over $ If purchased with COD or insurance over $ MDC STUDY GUIDE PAGE 2 CHAPTER 5 EXTRA SERVICES

61 Additional Combined Services: USPS Tracking Signature Confirmation Parcel Airlift (PAL) HOLD FOR PICKUP Customers can pick up valuable and perishable merchandise at a designated Post Office. Packages can be picked up within 15 days depending on product selected (5 days for Priority Mail Express). HOLD FOR PICKUP is compatible with: Priority Mail Express Priority Mail (commercial mailings) First Class Package Service parcels Parcel Select parcels USPS Tracking Get tracking updates, including the date and time of delivery or attempted delivery using the USPS Track & Confirm tool. Can be purchased online or at the Post Office depending on the class of mail selected Provides tracking updates as an item travels to its destination. USPS Tracking is compatible with: Priority Mail 1 Priority Mail-Critical Mail 1 First-Class Mail (parcels only) 3 First-Class Package Service 1, 2 Standard Post 1 Bound Printed Matter Library Mail Media Mail Standard Mail (parcels only) 2 Parcel Select 1 Included at no additional charge. 2 Electronic option only. 3 Included at no additional charge for electronic option. Additional Combined Services: Insurance COD Registered Mail Restricted Delivery* Return Receipt* Return Receipt for Merchandise Special Handling * If purchased with Insurance over $200, COD or Registered Mail. MDC STUDY GUIDE PAGE 3 CHAPTER 5 EXTRA SERVICES

62 Insurance Items can be insured against loss or damage. The price is based on declared value of the item up to $5, Insurance is compatible with: Priority Mail Express Priority Mail (must bear a tracking barcode to qualify for the included insurance) Priority Mail Critical Mail First-Class Mail First Class Package Service Standard Post Media Mail Bound Printed Matter Library Mail Parcel Select Parcel Select Lightweight (Bulk insurance only) Standard Mail Parcels only(bulk insurance only) Additional Combined Services: USPS Tracking Special Handling Signature Confirmation Adult Signature Required Adult Signature Restricted Delivery Restricted Delivery (if insured for $200 or more) Return Receipt for Merchandise (if insured for $200 or less) Return Receipt (if insured for $200 or more) Parcel Airlift (PAL) see Special Note: $100 of insurance is included in Priority Mail Express service. Purchase online, at your Post Office, or a self-service kiosk, depending on the class of mail chosen. Keep your postmarked mailing receipt. $50 insurance is included in Priority Mail service. Additional coverage may be available. Available only for certain products and to certain destinations. Registered Mail Is the most secure service offered by the Postal Service. Provides sender with a written mailing receipt and an optional delivery record is maintained by the USPS. A record of mailing is maintained at the mailing Post Office. Insurance is not available for items with no value. Insurance is provided and included for an additional fee, which is based on the value of the piece, to a maximum liability of $25,000. Additional handling charges apply for articles valued over $25,000. Registered Mail must be presented to a retail employee at a Post Office or a rural carrier. This service can be purchased online, at the Postal Service, or through a rural carrier. Registered Mail must bear the bar-coded red Label 200 (see forms at or a non-barcoded red Label 200-N when a mailer-generated shipping label bearing an Intelligent Mail package barcode (IMpb), is also affixed on the same mailpiece. MDC STUDY GUIDE PAGE 4 CHAPTER 5 EXTRA SERVICES

63 Registered Mail is compatible with: Priority Mail First-Class Mail First Class Package Service Additional Combined Services: COD USPS Tracking Signature Confirmation Restricted Delivery Returned Receipt Adult Signature is a new extra service that will provide a method for mailers to obtain a signature (upon delivery) from an adult recipient who is 21 years of age or older. Mailers will get delivery information, as well as the recipient s signature and name. Adult Signature Restricted Delivery With this service, articles are delivered only after the addressee or their authorized agent verifies their identity, proves that they are 21 years of age or older, and signs for it. Note: Adult Signature services are not available for purchase at the Postal Service. Add this service to a qualifying online label purchase. Adult Signature services are compatible with: Priority Mail Express Priority Mail Priority Mail Critical Mail Parcel Select Nonpresort Additional Combined Services: Certified Mail Insurance (w/priority Mail only) Return Receipt (w/priority Mail Express, Priority Mail and Critical Mail only <Form 3811>) Return Receipt service provides a mailer with evidence of delivery (to whom the mail was delivered and date of delivery), and information about the recipient s actual delivery address. A mailer purchasing a return receipt at the time of mailing may choose to receive the return receipt by mail (Form 3811) or electronically (by , or by signature extract file format under 7.0). A mailer purchasing a return receipt after mailing will receive the proof of delivery record by (electronic signature data) or by mail (Form 3811-A). A complete return address is required on the mailpiece when a return receipt is requested. For Priority Mail Express (Form 3811 option only), the return address on the Priority Mail Express label meets this requirement. At this time, electronic Return Receipts are not accepted by all court jurisdictions. MDC STUDY GUIDE PAGE 5 CHAPTER 5 EXTRA SERVICES

64 Return Receipt is compatible with: Priority Mail Express (Form 3811 only) Priority Mail 1 First-Class Mail 1 First-Class Package Service 1 Standard Mail (parcels only) 2 Parcel Select 3 Parcel Select Lightweight 2 Standard Post 3 Bound Printed Matter 3 Library Mail 3 Media Mail 3 1. If purchased with Certified Mail, COD, insurance over $ or Registered Mail. 2. If purchased with bulk insurance over $ If purchased with COD or insurance over $ Return Receipt for Merchandise provides sender with a mailing receipt (Form 3804) and a a return receipt (Form 3811) (see forms at After delivery, the return receipt is mailed back to the sender and also supplies the recipient s actual delivery address if it is different from the address used by the sender. A delivery record is maintained by the USPS, but no record is kept at the office of mailing. A return receipt for merchandise may not be requested after mailing, and restricted delivery is not available. A mailer who does not receive return receipt for merchandise service for which the mailer has paid may request delivery information at no additional charge, by using Form 3811-A; filed within two years after the date of mailing. Return Receipt for Merchandise is compatible with: Priority Mail Standard Mail (machinable and irregular parcels only) Parcel Select Standard Post Bound Printed Matter Library Mail Media Mail Additional Combined Services: USPS Tracking Insurance (If insured for $ or less) Special Handling Parcel Airlift (PAL) (see ) MDC STUDY GUIDE PAGE 6 CHAPTER 5 EXTRA SERVICES

65 Signature Confirmation provides additional security by requiring a signature. Shows the date and time of delivery or attempted delivery. Can be purchased online or at the Postal Service depending on the class of mail chosen. Not available to APO/FPO/DPO locations. Signature Confirmation is compatible with: Priority Mail Priority Mail Critical Mail First-Class Mail (Parcels only) (Electronic option only) Standard Post First Class Package Service (Electronic option only) Parcel Select Media Mail Bound Printed Matter Library Mail Additional Combined Services: Insurance COD Registered Mail Special Handling Restricted Delivery (Not available for purchase w/priority Mail Express COD) Return Receipt (Form 3811 only) (Not available for purchase w/priority Mail Express COD) Special Handling Provides preferential handling, if sending unusual shipments live poultry, bees, or other mailable contents that need extra care. Does not include preferential delivery, to the extent practicable in dispatch and transportation. Can be purchased online or at the Postal Service depending on the class of mail chosen. Articles must be presented to a Postal Service employee. Special Handling is compatible with: Priority Mail First-Class Mail Standard Post (retail only) First Class Package Service Parcel Select Media Mail Bound Printed Matter Library Mail Additional Combined Services: USPS Tracking COD Insurance Return Receipt for Merchandise Signature Confirmation MDC STUDY GUIDE PAGE 7 CHAPTER 5 EXTRA SERVICES

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67 6 Ancillary Endorsements Ancillary Service Endorsements (ASE s) are used by mailers to request an addressee s new address and to provide the USPS with instructions on how to handle undeliverable-as-addressed pieces. The endorsements consist of one keyword: Electronic, Address, Return, Change, or Forwarding, followed by the two words Service Requested. The endorsements are the same for all classes of mail, but the treatment and cost differ by class of mail. Use of an ancillary service endorsement on a mailpiece obligates the mailer to pay any applicable charges for forwarding, return, and separate address notification charges. A mailer endorsement is used to instruct the Postal Service regarding the mailpiece's appropriate disposition upon determining that it is Undeliverable As Addressed (UAA). In all cases, mailpiece is directed to a Computerized Forwarding System (CFS) or Postal Automated Redirection System (PARS) site for processing. "Address Service Requested" and "Change Service Requested" handling instructions and options are required to be predefined within the ACS mailer profile data. Proper placement of the endorsement is required. If the endorsement cannot be seen or understood, you might not receive the service requested. A return address must be used and placed in the upper left corner of the address side of the mailpiece or the upper left corner of the addressing area. If a return address is a multiple delivery address, it must show a unit designation (e.g., apartment number). ASE s may be encoded into the IMb, but mailpiece must also include a printed endorsement on Standard Mail pieces. The "Electronic Service Requested" ancillary service endorsement is available for participants of ACS or OneCode ACS (used with mailpieces bearing an IMb). Information about Traditional ACS and OneCode ACS is located in Publication 8a, Address Change Service. OneCode ACS mailers are also required to insert this service request through a valid service type code in an Intelligent Mail barcode. The service type code in the Intelligent Mail bar-code will take precedence over the instructions in the mailer account profile. The endorsement or, if combined, endorsements must meet the following physical standards: The type size of the endorsement must be at least 8 points. The read direction of the endorsement and return address must be the same as the read direction of the delivery address. The color contrast between the endorsement and the mailpiece background must be kept at a reasonable degree. A brilliant colored background or reverse printing is not permitted. A clear space of at least 1/4 inch around (above, below, and both sides) the total area containing the endorsement(s) is required. This 1/4-inch clear space is not required for an endorsement that is applied with a multiline optical character reader (MLOCR) inkjet and placed in the location directly below the postage area and any price marking if the endorsement is clear and legible. MDC STUDY GUIDE PAGE 1 CHAPTER 6 ANCILLARY ENDORSEMENTS

68 Ancillary Service Endorsements must be placed in one of four positions on a mailpiece: 1. directly below the return address 2. directly above the delivery address block 3. directly to the left of the postage area and below or to the left of any price marketing 4. directly below the postage area and below any price marking MDC STUDY GUIDE PAGE 2 CHAPTER 6 ANCILLARY ENDORSEMENTS

69 MDC STUDY GUIDE PAGE 3 CHAPTER 6 ANCILLARY ENDORSEMENTS