News and analysis
March 06, 2015

Postal Commission Rejects Rate Hikes That Angered Nonprofits

The Postal Regulatory Commission today rejected a rate increase proposal that had angered many nonprofits that publish printed magazines like Consumer Reports and Guideposts. The nonprofits complained of big spikes in the cost of mailing those publications under the proposed rate plan.

The commission sent the proposal back to the Postal Service and ordered changes by March 12.

Under new rates proposed in January by the U.S. Postal Service, the postage increase for nonprofit periodicals was capped at 1.9 percent under a 2006 law that ties postage increases to the rate of inflation.

The cap applies to the entire category of periodicals mailed by nonprofits. That means postage on certain subcategories could rise by much more, as long as the increases average out to no more than the 1.9 percent cap. However, the propsed rates did not average out to that amount.

Postage on periodicals is complicated, depending on numerous factors, such as weight, editorial versus advertising content, and bar coding. As a result, some nonprofits were slow to realize the impact of the January rate proposal.

Further complicating this year’s postage calculations: The Postal Service introduced new incentives in its proposed rates to motivate publishers to prepare magazines and other pieces larger than letter size for handling by its automated mail-processing equipment.

Big Price Jump

Under the proposed rates, the National Wildlife Federation would have spent nearly 10 percent more to mail its two magazines for youngsters, Ranger Rick and Ranger Rick Jr. The religious publication Guideposts would have cost about 9 percent more to mail, and its publisher would have seen total postage costs rise to $6 million annually, up from $5.5 million, for the magazine and other mailings to 2.1 million subscribers.

Among the worst hit would have been Consumer Reports, which has three spin-off magazines and 4.7 million subscribers. Postage on those publications could have cost up to 16 percent more this year. All told, the nonprofit consumer publisher would have paid upwards of $1 million more annually in postage than it does now, said Meta Brophy, director of procurement operations for Consumer Reports. The increase, she added, had "the potential to be devastating."

Ms. Brophy is board president of the Alliance of Nonprofit Mailers, which represents about 300 organizations. The alliance has made its concerns known to postal officials. The rates were scheduled to go into effect on April 26.

Editor's note: This article was updated on March 9 to correct the name of the National Wildlife Federation.

Send an e-mail to Holly Hall.