Could Customize and Branded ZIP+4 Code Reduce USPS Financial Shortfall?

By: Charles S. Mombo

Could Customize Branded ZIP+4 Code Reduce USPS Financial Shortfall?

It is no secret that the United States Postal Service (USPS) is ineffective, broke and “on the brink of defaulting.” The USPS has been facing financial shortfall for the past three years and has been asking Congress to alter the payment schedule of a mandate in a 2006 law that, unlike any other federal agency, requires the Postal Service to prefund retiree health benefits in amounts approximating $5.5 billion. In addition, USPS has also asked to gain access to $50 to $75 billion in overpayments it has made to the Civil Service Retirement System (CSRS) and a $6.9 billion it has overpaid to the Federal Employees Retirement System (FERS).

During the early part of 2011, Postmaster General Patrick R. Donahoe testified before the Federal Financial Management Subcommittee of the Senate Committee on Homeland Security and Governmental Affairs. Donahoe said that the financial condition of the Postal Service is such that in the absence of comprehensive legislation and required federal payments were in jeopardy. At the time, Donahoe said, "As things stand, we do not have the cash to make a $5.5 billion prepayment for future retiree health benefits due Sept. 30".

There have been lots of financially sound and viable suggestions that the USPS could take to remain afloat and competitive in today’s market. They could close unnecessary facilities and reduce the size of its workforce.

However, one of the most obvious yet simplistic suggestions on how the USPS could help close the large and growing gap between their revenues and expenses came from a friend of mine, Mr. Freddie Kato. We were having a conversation and I told Kato how brilliant the USPS was in 2007 when they issued Saks Fifth Avenue their own ZIP+4 code – “10022-SHOE.”

Saks is using 10022-SHOE as part of a multi-channel advertising program that includes direct mail and customized postage. Their goal is to drive home the message that the new shoe salon, which covers an entire floor, is so big that it needs its own ZIP Code. Located at 611 Fifth Avenue, in midtown Manhattan, Saks is also calling 10022-SHOE New York's most prestigious shoe-shopping experience. They have even redesigned their shoe department with its own express elevator, a private VIP room, expert repair service and collections from some of the leading fashion footwear brand names.

What is a ZIP+4 code (According to the USPS)

ZIP codes are a system of postal codes used by the United States Postal Service (USPS) since 1963. The term ZIP, an acronym for Zone Improvement Plan, is properly written in capital letters and was chosen to suggest that the mail travels more efficiently, and therefore more quickly, when senders use the code in the postal address. The basic format consists of five decimal numerical digits. An extended ZIP+4 code, introduced in the 1980s, includes the five digits of the ZIP code, a hyphen, and four more digits that determine a more precise location than the ZIP code alone.

Kato’s Branding and Customizing Postage Suggestion

Kata had suggested that the USPS could put a dent in their large and growing financial gap by a simple paradigm shift; and that is, the offering of customize ZIP+4 code service for a healthy fee to businesses. As an example – “05501-CAFÉ,” “17932-AUTO,” or “10022-STOR” could represent a café in Andover, Massachusetts, an auto repair shop in Frackville, Pennsylvania or store/storage in Manhattan, New York. This branding campaign created around a postal code will not only be a good advertising and promoting tool for any business but will have a win-win benefit for both the USPS and prospective businesses.