What Are USPS Postal Automation Discounts? How to Qualify

What Is Postal Automation?

Postal automation refers to the technologies that make document mailing workflows more standardized and more efficient.

These can include mail inserters, address standardization software, mail barcoding technology, and any other piece of machinery or software that makes it easier to print and mail documents, quickly and at scale.

What Are Postal Automation Discounts?

Postal automation discounts are cost savings offered by the USPS to organizations that use certain technologies and meet certain requirements.

It’s easier for the USPS to handle mailings by using automated processing technology at their facilities, without having to incur extra time and monetary costs related to manual handling.

This is only possible if they receive mailpieces that have been prepared in specific ways, and the USPS incentivizes organizations who use these processing methods by providing special rates to those who do.

What Requirements Do I Need to Meet To Obtain USPS Automation Rates?

In order to achieve USPS postal automation discounts, organizations must follow certain requirements that impact nearly every stage of the mail lifecycle.

We’ll break down many of the officially required items later in the blog, but, in summary, they include:

• Address standardization and validation: checking and formatting mailing lists in accordance with USPS standards using CASS and a USPS-approved address update method, such as NCOA.
• Mail presorting: grouping mail by destination before delivering it to the USPS facility.
• Barcoding: attaching the IMB to each mailpiece, so the USPS can identify and track each envelope as it moves through the postal network.
• A mailing size of at least 500 pieces for First-Class Mail and of at least 200 pieces for Marketing Mail
• Meeting certain weight and dimension requirements for each piece.

Benefits of Postal Automation

Postal automation offers significant advantages for organizations that send large volumes of mail. It improves efficiency, reduces costs, and can enhance the reliability of mail delivery. Below are the primary benefits organizations gain from optimizing their workflows:

Lower Postage Costs

The USPS offers postal automation discounts for mail that meets these standards.

This is because other types of mail are more complicated for the USPS to handle and cost more for them to process. Offering these cost savings incentivizes mailing organizations to prepare their mailpieces in the most USPS-compatible ways.

Postage can add up for organizations that are sending significant quantities of mailpieces. Thus, taking advantage of the USPS’s discounts is a smart way to save money.

Some of the steps needed to obtain these savings can help decrease mailing costs indirectly. For example, processing mail lists against CASS and NCOA can decrease the number of undeliverable mailpieces, which reduces waste and additional handling fees.

Faster Mail Processing and Delivery

Automated systems accelerate every stage of mail production.

Address validation, barcode assignment, and presorting all make it easier for the USPS to deliver mail where it needs to be, without delays.

Thus, postal automation can help organizations connect with their customers quicker and meet tight deadlines for time-sensitive correspondence.

Improved Accuracy and Quality Control

Preparing mailpieces for postal automation can increase quality and, thus, maintain consumer perception of your organization.

For example, the address standardization software required to obtain automation discounts helps keep every recipient’s information up-to-date and properly formatted.

This reliability is especially important for compliance-driven industries, where mistakes can carry financial or regulatory consequences.

Enhanced Visibility and Tracking

In order to take advantage of postal automation cost reductions, the USPS requires that organizations use the IMB on their mailpieces.

IMBs may be scanned at various points in the mailing process where automated scanning technology is available. This strengthens mail tracking and reporting capabilities, from facility departure to arrival at intermediaries to final delivery.

Guide to USPS Postal Automation Discount Requirements

Below is a detailed and practical breakdown of what businesses need to do to obtain these cost savings:

Address Quality Requirements: CASS and NCOA

USPS equipment relies on standardized, validated address data to correctly identify delivery points and route mail without manual intervention.

Two USPS programs play a central role in this process: CASS and NCOA.

CASS (Coding Accuracy Support System)

CASS is a USPS certification program for address standardization software.

CASS-certified software formats mailing addresses to USPS standards, corrects abbreviations, appends ZIP+4 codes when available, and ensures addresses align with USPS delivery point data.

CASS processing is required for postal automation discounts because it allows addresses to be consistently interpreted by USPS optical scanning equipment.

NCOA (National Change of Address)

The USPS requires that organizations wishing to obtain automation rates update their mailing lists using an approved address update method within 95 days of mailing. One of the most popular ways to do so is by using the NCOA.

NCOA processing complements CASS by keeping addresses current. The NCOA database contains change-of-address records filed by individuals and businesses when they move.

The USPS requires mailers seeking postal automation pricing to compare their mailing lists against this database within 95 days prior to mailing.

NCOA processing helps organizations update addresses for recipients who have moved. This can reduce forwarded, returned, and undeliverable-as-addressed mail, thus reducing the time and monetary costs that come with handling delayed mailpieces.

Intelligent Mail Barcode (IMB) Requirements

The USPS requires that organizations wishing to obtain postal automation discounts use the intelligent mail barcode (IMB).

The IMB encodes routing information, mailer identification, and unique piece-level data into a single barcode.

This barcode is scanned as mail moves throughout the postal network wherever the technology exists to do so, providing a record of where the mailpiece has been that is helpful for compliance-driven print and mail workflows.

USPS postal automation equipment uses the IMb to:

• Identify the destination of each mailpiece
• Sort mail at high speed through processing facilities
• Track mail movement and generate scan data

Presorting Requirements

Presorting is the grouping of mailpieces together by destination before delivering them to a USPS facility.

It is required to obtain USPS postal automation discounts because it reduces the handling effort USPS must employ to process these mailpieces.

Higher levels of presort qualify for lower automation rates. The more specific the presorting group is, the larger the discount.

Common presort levels include:

• 5-Digit Presort: Mailpieces are grouped by the same 5-digit zip code. This is the highest level of presorting and generally qualifies for the deepest cost savings because the USPS receives mail that is already sorted close to its final destination.

• AADC (Area Distribution Center): Mailpieces are grouped by the USPS Area Distribution Center that serves a group of zip codes. This level requires less granularity than 5-digit presort but still significantly reduces USPS handling.

• Mixed AADC: Mailpieces destined for multiple AADCs are combined when volume thresholds for higher presort levels are not met. While discounts are smaller, Mixed AADC still qualifies as automation mail when prepared correctly.

Physical Mailpiece Design and Machinability Requirements

To qualify for USPS postal automation discounts, mailpieces must meet strict physical design and machinability standards.

These requirements ensure mail can be processed by high-speed USPS sorting equipment without jamming, skewing, or misreads.

Mail that falls outside these specifications may still be deliverable, but it will typically be processed manually and will not qualify for price reductions.

Postal Automation Letter Requirements

A list of the core USPS design requirements for letters can be found here, but we’ve provided a summary below:

Size

• Minimum: 3.5 inches high × 5 inches long
• Maximum: 6.125 inches high × 11.5 inches long

Aspect Ratio

• Must be between 1.3 and 2.5

Thickness

• Minimum: 0.007 inches, though this number increases to 0.009 inches if the piece is either more than 4.25 inches high, or 6 inches long, or both
• Maximum: 0.25 inches

Weight

• Maximum: 3.5 ounces for letter-rate mail

Construction

• No clasps, strings, buttons, or similar closures

Automation Flat Requirements

Flats (large envelopes) are processed on separate USPS equipment. These are the requirements that flats must meet to qualify for postal automation rates:

Size

• Minimum: At least one dimension larger than a letter, meaning more than 6.125 inches high or more than 11.5 inches long

• Maximum: 12 inches high × 15 inches long

Thickness

• Minimum: 0.009 inches
• Maximum: 0.75 inches

Why Postal Automation Matters in Regulated Industries

Organizations in regulated industries must deliver mailings accurately, on time, and in a way that is traceable.

The steps taken to obtain automation rates allows organizations to not only meet these optimizations, but to save postage while doing so.

These are some of the benefits, specific to regulated industries, of optimizing your mailing workflows for these cost savings:

More Reliable Delivery

The use of CASS-certified address standardization software and NCOA processing can help organizations reduce undeliverable mail.

This lowers the risk of compliance violations tied to mailing mistakes, such as missed notices due to mailing delays or a document with PHI being viewed by the incorrect recipient.

Furthermore, enhanced mail processing speed can shorten the delivery timeline, making it easier to meet important deadlines.

Postal automation systems can lead to fewer manual errors, and increased document accuracy rates may lead to stronger client and consumer satisfaction, along with fewer compliance violations.

Mail Traceability

In compliance-driven environments, it can be important for organizations to know when mail was sent and the places that a mailpiece has physically been located at.

IMBs allow organizations to obtain scan data that confirms when mail was inducted into the postal system.

This information is valuable for audits, dispute resolution, and internal compliance reporting.

Cost Savings

Cost control is a strong benefit of meeting USPS postal automation requirements for regulated industries as much as it is for any other industry.

Automation allows organizations to qualify for lower postage rates without cutting corners. Indirectly, address quality improvements can reduce returned mail, and fewer errors mean fewer reprints or remediation efforts.

D4 Solutions: Your Print and Mail Partner

Looking for a compliant and secure print and mail vendor well-versed in USPS discounts and requirements? Look no further than D4 Solutions.

Across 45 years of experience, we’ve gained the expertise necessary to get your documents printed and your mailings delivered quickly and in ways that obtain USPS discounts, including postal automation discounts.

Our HIPAA and SOC 2 Type II audited workflows have a 99.99% accuracy rate in terms of quality and on-time delivery.

Reach out now to learn how we can help your organization.

Q+A: Postal Automation Discounts

What are USPS automation rates?

USPS automation rates are discounted postage rates offered for mail that meets specific postal automation requirements. These discounts reflect the reduced processing effort required by USPS when mail is properly barcoded, presorted, and machinable. Automation rates are available for qualifying letters and flats that meet all USPS standards.

What is CASS and why is it required for postal automation discounts?

CASS (Coding Accuracy Support System) is a USPS certification program for address standardization software. CASS-certified processing ensures addresses are formatted correctly, include valid ZIP+4 codes when available, and align with USPS delivery point data. USPS requires CASS processing for postal automation discounts because it improves address readability and routing accuracy.

What is NCOA and how does it affect postal automation discount eligibility?

NCOA (National Change of Address) is a USPS database of address changes filed by individuals and businesses. Mailers must update their mailing lists through an approved address-update method such as the NCOA within 95 days of mailing to qualify for automation pricing. NCOA processing updates addresses for recipients who have moved, reducing undeliverable mail and thus making mailings easier for the USPS to process.

What is the Intelligent Mail Barcode (IMB)?

The IMB is a USPS barcode used to enable automated sorting and tracking of mailpieces. It contains routing information, mailer identification, and unique piece-level data. USPS postal automation equipment reads the IMB to process mail at high speed and generate scan data that supports tracking and verification.

What happens if mail does not meet postal automation requirements?

Mail that does not meet USPS postal automation requirements may still be deliverable, but it is typically processed manually. This can result in higher postage costs, slower delivery, acceptance delays, or reclassification to non-automation rates.

Is optimizing workflows for postal automation discounts a good choice for compliance-driven industries?

The steps taken to obtain postal automation discounts can reduce error rates and improve both traceability and delivery reliability. These are important concerns to organizations in financial services, insurance, healthcare, and government sectors. Thus, obtaining these USPS discounts both saves postage and improves compliance-based workflows.

Who should I partner with for printing and mailing?

D4 Solutions is a strong printing and mailing partner for organizations across industries. We have the expertise necessary to help your organization obtain postal automation discounts and other enhancements to your workflow. Our processes boast a 99.99% operational accuracy rate and are HIPAA and SOC 2 Type II audited, helping documents get to their destinations securely, accurately, and on time. Reach out now to learn more about how we can help your organization.