Postal Updates

PMG DeJoy ends USPS 30-year discount postage program

Jul 15, 2022, 2 PM

By Bill McAllister, Washington Correspondent

Postmaster General Louis DeJoy has killed a 30-year-old program that allowed some businesses to send packages at sharply discounted postage rates.

The death of the so-called “postage reselling” program was disclosed July 5 by Capitol Forum, a Washington, D.C., news organization.

In 2017, Capitol Forum first questioned if the program’s discounts were going to unqualified mailers.

David Partenheimer, a United States Postal Service spokesman, acknowledged in a July 9 email to Linn’s Stamp News that the program was being shuttered.

“The Postal Service undertook an evaluation of its reseller program and has determined that the program as currently structured is not resulting in the customer benefits and efficiencies that were originally envisioned, has caused difficulties in monitoring compliance with pricing and other terms, and should be discontinued,” he said.

Capitol Forum said the program is scheduled to end Oct. 1.

It predicted this would impact a number of companies, including Stamps.com and Pitney Bowes, which have been offering the discounted prices to customers.

The website for Stamps.com, a California company that was a pioneer in selling online postage, says its customers can save up to 30 percent over USPS rates.

Neither Stamps.com nor Pitney Bowes, the giant postage meter company, responded to Linn’s email requests for comment.

Capitol Forum said that when DeJoy first heard criticisms of the reseller program, he wanted to cancel it immediately. But according to the recent Capitol Forum newsletter, he ran into opposition from within the USPS. Now, it said, DeJoy has had the last word, quashing the program.

Created in 1992, the postage reselling program was aimed at giving discounts to smaller mailers that could not qualify for the large discounts the Postal Service offered to other large-scale mailers, including Amazon, which was founded in 1994.

Under the program, large mailers were allowed to share some of their lower prices with smaller mailers in the hope that this would boost overall parcel volume.

The program grew and won praise from the USPS in 2009 for giving the agency “inroads to many new markets,” according to Capitol Forum.

A 2019 report by the Postal Service’s Office of Inspector General about the program was highly redacted, but it noted there were “allegations, at a high level ... that certain PC [personal computer] Postage providers were working with resellers to route shipments from existing USPS customers through resellers’ discounts on a massive scale.”

All this was occurring amid “the soaring financial fortunes of these PC Postage providers at a time when the Postal Service is doing less well,” the inspector general’s report said.

Postal Service officials downplayed the allegations, claiming the program’s critics had inaccurate information, the report said.

In its newsletter, Capitol Forum noted that Stamps.com and Pitney Bowes had said in their financial reports that they could suffer if the USPS were to eliminate programs their customers used.

A 2020 filing by Stamps.com said that if the Postal Service terminates any of its agreement with the company “our revenue and operating results would suffer.”

Pitney Bowes said in its 2021 annual report, “If we are unable to receive competitive pricing from the USPS or take advantage of lower cost USPS options, our ability to compete with private carriers and to achieve profitable revenue growth will be adversely affected.”

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