How to Make a Billion: The Costs of 'Undeliverable as Addressed'
The USPS recently shared some interesting data on the volume and cost of undeliverable as addressed (UAA) mail.
According to the USPS, "Total UAA volume dropped from 9.3 billion pieces (4.71 percent of total mail volume) in FY 1998 to 6.9 billion pieces (4.11 percent of total mail volume) in FY 2010. (This reduction, while significant, falls far short of previous Postmaster General Jack Potter's goal of reducing UAA mail by 50 percent by 2010.) Historically, UAA mail runs in the range of 4 percent to 5 percent of total mail volume, and the percentages of total volume vary by class of mail. Periodicals mail, for example, has a UAA percentage of about 1.5 percent, while Standard Mail usually runs about 6.75 percent. Interestingly, the volumes of UAA mail that the USPS forwards or treats as waste both experienced declines, but the volume of UAA mail that the USPS returns to sender actually increased."
All this UAA is money down the drain to the mailers—who designed, produced and labeled it and applied its postage—and to the Postal Service that has to deal with its final disposition.
That tab was $1.3 billion in 2010, and that was just the cost to the Postal Service, which has to incorporate these costs into its rate-setting. Add to this bill the cost of 7 billion pieces that went nowhere near the intended recipient—and that's a fortune off the bottom line. Some of this is inefficiency. Marketers in particular—primarily who use the Standard Mail category—must do a better job in data hygiene and the use of postal addressing and preparation tools.
It may be helpful, and profitable, for mailers to make sure they are undertaking every feasible effort to keep their mailing lists clean—and to avoid this hefty bill. The Direct Marketing Association has an online tool to help marketers make sure their list hygiene and data management efforts are up to par.