Postal Reform – U.S. Postal Service's Delivery Point Validation (DPV)

As of Aug. 1, the U.S. Postal Service’s Delivery Point Validation (DPV) requirements will impact service providers’ mailing budgets. Under DPV standards, only exact addresses that can be confirmed as accurate will be assigned a ZIP + 4 code and thus be eligible for presort discounts.

DPV software will identify addresses that are invalid and undeliverable according to the USPS, assign them a regular five-digit ZIP code, and thus make them ineligible for discounts. This change to a more stringent set of rules will increase telecom service providers’ mailing expenses significantly if their mailing processes cannot conform to the DPV requirements. Using addresses the USPS deems invalid will also slow invoice delivery and payment.

Stricter Presort Discounts

Most telecom operators that invoice end-customers directly handle their invoice distribution in-house or choose to outsource it to a bill presentment provider. Regardless of how or where processing takes place, address matching software is critical for ensuring that address databases are accurate, to qualify mailings for maximum postage discounts. Today addresses must conform only to the USPS Coding Accuracy Support System (CASS) standards. Addresses that match the defined criteria receive ZIP + 4 codes that mark them as eligible for the maximum presort discount.

DPV will work similarly, but it is far more precise. Under the current CASS system, as long as an address falls within a valid address range, the mail piece will be deemed eligible for a presort discount. However, when the rules change to DPV on Aug. 1, the USPS will no longer accept addresses that merely fall within a valid range.

According to information gathered at Pitney Bowes’ 2007 DMT Customer Conference, automated coding for discounts is expected to drop an average of 1 to 3 percent as a result of the new rules, thus reducing automated discounts in kind. Direct billers thus will spend more for postage, as many of the addresses in their databases that were eligible for discounts previously fail to qualify under DPV standards.

Return to Sender

Last year the USPS also began its quest to improve mail quality, setting a goal to reduce undeliverable-as-addressed (UAA) mail 50 percent by 2010. Each year handling and processing UAA mail costs the USPS more than $1 billion. Using correct addresses will save on address correction and return fees, which run approximately 75 cents per piece of improperly addressed mail.

The USPS offers licenses to mailers for a technology product called NCOA Link that is designed to update addresses with the latest change-of-address information on file. When a customer files a change of address, this service will flag it, change the address and send the information to the direct biller in order to update its records. New invoices can then be delivered directly to the customer’s new address—not forwarded—thus eliminating any delays in payment.