Editorial: A Sample of USPS Bias

By: E&P Staff

Until recently, the modus operandi of the U.S. Postal Service was to swear up and down that no way did it favor direct mail over newspapers — c’mon, newspapers are our oldest customers! — while constantly inventing new ways to make rates cheaper and delivery procedures simpler for direct mailers. Now, it seems the USPS no longer even bothers to hide its bias for direct mail.

Consider its latest stunt, the “Samples Showcase” test program in which the USPS partnered with a direct mail firm and delivered — for free, mind you — a box of various consumer product samples such candy bars, coffee and lotions to 200,000 targeted households in Charlotte, N.C. and Pittsburgh.

The USPS announcement of the program makes plain its preference for direct mail customers: “Another strategy behind the pilot test is making sure that direct mail is the sampling method of choice.” It goes on to say that the co-op box “is expected to make direct mail sampling more attractive.”

Now wait, you may be saying, isn’t the Postal Service forbidden from selecting winners and losers among private companies like this? The USPS’ thin reed of justification is that since newspapers and stores distribute product samples, it’s a “competitive service” that it can enter under the Postal Reform Act.

Of course, as the Newspaper Association of America pointed out in its studiously ignored protest of the Samples Showcase test, the service at issue is delivering advertising, which the Act defines as a monopoly postal product. The real competition is not in the delivery of samples — but in convincing packaged-goods companies that it’s better to deliver samples with a newspaper or in a store or through direct mail. It’s unfair for a government entity to throw its weight on the side of any one competitor.

But as we report elsewhere in this issue, that’s hardly the only way the Postal Service favors direct mail.

Newspapers are constantly forced to fight the crafty rate structures the USPS employ that essentially put its thumb on the scale whenever newspaper are being processed. One for-instance that Debra Gersh Hernandez reports is the rate differential between the high-density rates, used by newspapers for their total-market and selective-market coverage products, and saturation advertising mail used almost exclusively by direct mailers.

Back in 2006, newspapers paid about 0.9 cent more than the saturation rate. Bad enough, considering how many hoops newspapers must jump through to prep their products for delivery. But last year, that differential was nearly three times as high, 2.6 cents in favor of direct mail — explaining why more newspapers are taking their TMCs and SMCs out of the mail.

Even the ill-considered proposal to stop Saturday delivery punishes newspapers, which depend on timely delivery, far more than direct mail. Daily community papers with big mail circulations face the prospect of their Friday paper not reaching subscribers until whatever time it is they get their Monday mail.

We are a long way from the early days of the Republic when postal rates were set with the goal of making newspaper delivery as cheap as possible — and in terms of untangling the news from government, that’s all to the good. But the USPS’s overseers, the Postal Rate Commission — and Congress — must do more to rein in its apparently insatiable desire to subsidize direct mail at newspapers’ expense.

 

 

  

 

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Published: June 11, 2010

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