Five Ways to Offset the USPS Marketing Mail Postage Rate Increase

Effective July 14, 2024, the United States Postal Service (USPS) has increased shipping prices, including USPS marketing mail postage rates.

Considering the rising operational costs, high inflation rates, and the fact that the postal service generally does not receive tax dollars for operating expenses, another USPS marketing mail (standard mail) postage rate increase was inevitable to continue to maintain the quality and efficiency of their services. Price adjustments like these support the USPS’s ongoing operations, including the implementation of the Delivery for America 10-year plan to achieve financial sustainability and service excellence for the U.S. Postal Service.

The July 2024 USPS rate, approved by the postal service’s governors, would raise mailing service product prices by approximately 7.8 percent. The grid below highlights some of the rate increases impacting direct mailers this year.

The postage rate is not a fixed amount and is determined by size and weight of the mail piece, as well as volume. To view prices for first-class mail, priority mail, and international mailings along with extra services and fees, visit usps.com.

5 Ways to Offset the 2024 USPS Marketing Mail Postage Rate Increase

Postage charges are a substantial line item in the budget. To help you save on your next campaign, Franklin Madison Direct’s Director of Print Production, Paula Phipps, suggests five ways mailers can offset this year’s increase:

1. Look Past First-Class: Although the in-home window may be longer than First-Class Mail, Marketing Mail is more affordable mail class in certain situations. The most common direct mail campaigns, such as flyers, circulars, newsletters, bulletins, catalogs, and even small parcels, can be classified as marketing mail. Those who leverage bulk mailings (minimum quantity 200 pieces, or 50 pounds) can benefit from the Marketing Mail rate. Talk with a FM Direct to determine if making the switch is right for you.
2. Take Advantage of Presort Software: The USPS incentivizes mailers who consolidate mailings within the same zip code or postal sorting zone. Therefore, it is in your best interest to partner with a vendor who uses a presort service. This will increase your mailing accuracy and ensure your mail piece follows postal service regulations. A presort service comingles your mail with other clients’ mail by sorting based on where it needs to go in the country, reducing your postage rates.
3. Design for Automation: Machinable mail is built for automated processing and sorting by mail handling machines. Design your mail pieces for efficient processing to avoid the significant cost increases of non-machinable mail. Securing presort automation rates can cut postal costs even more. Work with your vendor to ensure your mail piece format meets USPS automation requirements and print a delivery point barcode on each mail piece. It’s also important to use an address list that has been validated against USPS databases. Then, qualify your piece with the post office before final production.
4. Test a New Format: Depending on the type of presort that you execute, postage for a large envelope (flat-size mail piece) could be more than double the cost of a business envelope (letter-sized) piece. Converting mail pieces from flat mail to letter-size mail is one of the easiest ways to cut costs in half and mitigate the rate increase. Take into consideration your quantity when mailing flats.
5. Look for Entry Point Discounts: Consider transporting your mail to a Network Distribution Center or Sectional Center Facility to enter the carrier route closer to the delivery destination and utilize commingling. This mailing process could speed up delivery times and save up to 18% on postage.

USPS Sponsored Cost Savings

Despite this new postage rate increase, the United States Postal Service is still the most efficient mailing service for direct marketers. Throughout the year, they offer promotions and incentives for brands who utilize innovative and interactive elements in their direct mail marketing piece to increase consumer engagements. See below for a list of the 2025 USPS promotions:

• Integrated Technology (Choose your start date, must run 6 consecutive months during CY 2025): Mailers who incorporate enhanced augmented reality such as 3D images, uses basic voice commands, or mobile shopping elements such as a QR code will receive a 3% discount per mailing.
• Tactile, Sensory & Interactive (February 1^st – July 31^st): Mailers who deliver a sensational customer experience through specialty inks and papers, texture, scents, or interactive folds can receive a 4% discount per mailing.
• Continuous Contact (April 1^st – December 31^st): Mailers who send follow-up letters and flats to the same address with content that builds on the initial mailing can receive a 3% discount per mailing.
• Reply Mail IMbA (July 1^st – December 31^st): Mailers who enroll in IMbA and include a static barcode with a Business Reply Mail (BRM) can receive a 3% discount. If mailers use a serialized barcode, they can receive a 6% discount.
• First-Class Mail Advertising (September 1^st – December 31^st): Mailers who craft standalone advertisements or incorporate marketing messages onto First-Class Mail pieces (letter, cards, and flats) can receive a 3% discount per mailing.

The USPS also added two new add-on promotions for 2025 that add an additional 1% discount:

• Informed Delivery (Available all year long): Mailers who integrate physical mailboxes with digital inboxes can receive a 1% additional discount to a promotion.
• Sustainability (Available all year long): Mailers using paper certified by the Sustainable Forestry Initiative (SFI) or Forest Stewardship Council (FSC) can receive a 1% additional discount to a promotion.

* As add-ons, these can can only be used in conjunction with one of the five promotions listed above. 

2025 USPS Marketing Mail Growth Incentives

In August 2023, the USPS filed two, year-long growth incentives with the Postal Regulatory Commission, and these incentives will extend into 2025. Each mail growth incentive will offer postage credits equivalent to a 30% discount to mailers for Marketing Mail and First-Class volumes above fiscal year (FY) 2024 or 1 million pieces in calendar year (CY) 2025. Qualified marketing mail products include letters, flats, and parcels. Qualified First Class products include letters and flats.

Discounts will be calculated on pieces mailed exceeding USPS FY 2024 (Oct. 1, 2023 – Sept. 30, 2024) volumes, and volume thresholds are based on USPS FY 2024. The incentive will run CY 2025 (Jan. 1, 2025 – Dec. 31, 2025).

To be eligible, mail owners are required to register for the incentive to establish a baseline volume for FY 2023 and:

• Mail at least one million qualifying pieces in CY 2025, and/or
• Mail more qualifying pieces in CY 2025 than they mailed in FY 2024

Mailers can participate in either or both Mail Growth Incentives, but the incentives cannot be combined to reach the million-piece minimums. Postage credits will be issued after FY 2024 volume has been exceeded and must be used for postage by December 31, 2026.

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FM Direct has helped our clients save 15% on postage through our postal optimization strategies.

CASE STUDY: USPS Incentive Leads to Six-Figure Savings, Feeding New Customer Growth

If you are looking for other ways to trim production costs, counter the effects of the USPS marketing mail postage rate increase, and enhance your direct mail program in 2025, contact us for a free analysis with one of our mailing experts.