[Federal Register Volume 76, Number 129 (Wednesday, July 6, 2011)]
[Rules and Regulations]
[Pages 39299-39303]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-16802]


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POSTAL SERVICE

39 CFR Part 111


Shortpaid and Unpaid Information-Based Indicia (IBI) Postage and 
Shortpaid Express Mail Postage

AGENCY: Postal ServiceTM.

ACTION: Final rule.

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SUMMARY: The Postal Service will revise Mailing Standards of the United 
States Postal Service, Domestic Mail Manual (DMM[supreg]) 604.4, 604.8, 
and 604.10, to implement revenue protection procedures for mailpieces 
entered with shortpaid and unpaid Information Based Indicia (IBI) 
postage payment and to implement revenue protection procedures for 
shortpaid Express Mail[supreg] postage.

DATES: Effective September 6, 2011.

FOR FURTHER INFORMATION CONTACT: Carla Sherry at 703-280-7068, or Carol 
A. Lunkins at 202-268-7262.

SUPPLEMENTARY INFORMATION: On February 22, 2011, the Postal Service 
published the Federal Register proposed rule, Shortpaid and Unpaid 
Information-Based Indicia (IBI) Postage and Shortpaid Express Mail 
Postage, Revised Proposal (76 FR 9702-9705). The Postal Service 
received four comments and gave them each consideration and will adopt 
the proposed rule with minor revisions.

Comments

    One commenter raised concerns about the ability of customers who 
pay postage with IBI postage meters to use an existing account and/or 
payment method in lieu of a credit card to pay revenue deficiencies. At 
the present time, the Postal Service will not permit customers to use 
existing accounts and/or payment methods in lieu of credit cards to pay 
revenue deficiencies, but this may be a future consideration.
    One commenter expressed concern regarding the Postal Service's 
proposal to use an electronic notification process to recover revenue 
deficiencies from customers using IBI postage meters. Only customers 
who pay postage with postage evidencing systems with e-mail addresses 
either on file with the Postal Service or with whom the Postal Service 
has an agreement and a process in place to obtain e-mail addresses will 
receive an electronic notification. If a customer's e-mail address is 
not available, the Postal Service will use other existing processes to 
recover revenue deficiencies.
    One commenter asked for clarification of ``other non-electronic 
processes'' that will be used to identify shortpaid and unpaid postage. 
In the event that the new electronic processes are unavailable, the 
Postal Service will use existing methods to collect unpaid and 
shortpaid IBI postage. The Postal Service is making a minor change in 
the language to state, ``In the event that electronic processes are 
unavailable, other existing processes may be used to recover revenue 
deficiency as required.''
    One commenter asked for clarification regarding the procedures for 
remedying postage deficiencies generated from Click-N-Ship. The Postal 
Service is making a minor change to further clarify that the new 
automated procedures for detecting and recovering postage deficiencies 
apply to shortpaid and unpaid postage generated from Click-N-Ship. 
However, this does not preclude the use of existing processes to 
identify or recover postage deficiencies. For items with shortpaid IBI 
postage that is generated from Click-N-Ship, the Postal Service will 
continue to allow mailers to remit payments for such postage 
deficiencies via Click-N-Ship and follow the existing postage 
deficiency process.
    With this final rule, the Postal Service implements new procedures 
to manage shortpaid Express Mail postage and a new process to detect 
mailpieces with shortpaid and unpaid IBI postage generated from the 
following postage evidencing systems: Click-N-Ship[supreg], IBI postage 
meters, and PC Postage[supreg] products.
    The Postal Service also implements a new USPS Web-based resolution 
process to remedy shortpaid and unpaid IBI postage payment 
deficiencies; a process to dispute shortpaid and unpaid IBI postage 
deficiency assessments; and a process to appeal USPS decisions relative 
to shortpaid and unpaid IBI postage. During this process, customers 
will be notified electronically of the postage deficiency and be 
provided a link to a specific USPS Web-based customer payment portal to 
resolve the shortage. In addition to this new process, the Postal 
Service will continue to use the existing postage deficiency payment 
process for shortpaid and

[[Page 39300]]

unpaid postage generated by Click-N-Ship.

Express Mail Shortpaid Procedure

    For an Express Mail Next Day, Second Day, Military, or Custom 
Designed Service item received at the origin office of mailing with 
insufficient postage, the mailer is contacted to correct the postage 
deficiency prior to dispatch of the Express Mail item. If the mailer 
cannot be contacted before dispatch from the origin office, or if the 
Express Mail item with insufficient postage is identified during 
processing operations or at the destination Post Office, the Express 
Mail item is endorsed ``Postage Due'', marked to show the total 
deficiency of postage and fees, and then dispatched to the destination 
Post Office for delivery to the addressee upon payment of the 
deficiency.
    If the addressee refuses to pay the postage due amount, the Express 
Mail item is endorsed ``Return to Sender--Refused.'' The postage 
deficiency is then collected when the Express Mail item is returned to 
the original sender. If the original sender chooses to remail the item, 
a new Express Mail label and new postage and fees must be affixed.

Postage Evidencing Systems

    Postage meters, PC Postage products, and Click-N-Ship are 
collectively identified as ``postage evidencing systems.'' A postage 
evidencing system is a device or system of components a customer uses 
to print evidence that postage required for mailing has been paid.

Information-Based Indicia

    Information-Based Indicia (IBI) are digitally generated indicia 
that include a two-dimensional barcode.

Revenue Deficiency

    Revenue deficiency includes both shortpaid and unpaid postage which 
occurs when any mailpiece has less postage than required for the 
applicable price category and associated class, weight, shape, zone, 
and extra services.
    Shortpaid postage is revenue deficiency for which the valid postage 
on a mailpiece is less than the amount due.
    Unpaid postage is a revenue deficiency for which postage is 
deficient due to the lack of affixed postage or the use of 
counterfeited, replicated, duplicated, falsified, or otherwise modified 
postage.

Detection Process for Revenue Deficiency

    When potential shortpaid or unpaid IBI postage is detected on a 
mailpiece, the Postal Service will subsequently verify the postage to 
ensure its validity and determine whether the amount is sufficient. 
When the IBI postage on a mailpiece is confirmed to be shortpaid or 
unpaid, the corrective measures outlined below will be taken to recover 
the applicable revenue deficiency.

Electronic Notification of Revenue Deficiencies

    In most cases, the Postal Service will electronically notify both 
the mailer and the postage evidencing system service provider of the 
revenue deficiency and deliver the mailpiece to the addressee. The 
electronic notification provides a link to the USPS[reg] Web-based 
customer payment portal that will enable the mailer to pay or dispute 
the revenue deficiency. In the event that electronic means are 
unavailable, other existing processes may be used to recover revenue 
deficiencies as required.

Resolution Process

    Where applicable, the Postal Service will provide a resolution 
process that will be accessible through the USPS Web-based customer 
payment portal to enable mailers to pay, dispute or appeal revenue 
deficiencies for IBI postage generated from postage evidencing systems. 
These processes are outlined below.

Payment Process

    The mailer has 14 days from the date that the Postal Service sends 
the revenue deficiency electronic notification to pay the deficiency. 
The payment process is as follows:
     During the 14-day resolution period, the mailer must remit 
the payment for the revenue deficiency by accessing the USPS Web-based 
customer payment portal or through an otherwise authorized Postal 
Service payment method as indicated in the electronic notification.
     After 14 days, if a mailer has not paid or taken action to 
dispute a revenue deficiency, the Postal Service may notify the 
mailer's postage evidencing system service provider to temporarily 
suspend the mailer's account.
     When an electronic notification sent to a mailer is 
undeliverable, the Postal Service may notify the mailer's postage 
evidencing system service provider to temporarily suspend the mailer's 
account prior to the end of the 14-day period.
     When a mailer's cumulative revenue deficiency continues to 
increase during the 14-day period, the Postal Service may notify the 
mailer's postage evidencing system service provider to temporarily 
suspend the mailer's account prior to the end of the 14-day period.
     If the mailer feels the revenue deficiency is in error, 
the mailer may dispute the revenue deficiency during this 14-day 
period.

Dispute Process

    The mailer has 14 days from the date the Postal Service sends the 
revenue deficiency electronic notification to dispute the deficiency. 
The Postal Service will also send an electronic notification of the 
approved (upheld) or denied dispute to the mailer. If the Postal 
Service upholds the mailer's dispute, then the mailer is required to 
take no further action. The dispute process is as follows:
     During this 14-day period, the mailer must take action to 
dispute the revenue deficiency by accessing the USPS Web-based customer 
payment portal or through an otherwise authorized Postal Service 
dispute method as indicated in the electronic notification.
     The mailer must provide information to substantiate that 
the postage affixed was valid and sufficient for the postage and 
service fees associated with the mailpiece.
     After 14 days, if a mailer has not taken action to pay or 
dispute a revenue deficiency, the Postal Service will notify the 
mailer's postage evidencing system service provider to temporarily 
suspend the mailer's account.
     When an electronic notification that is sent to a mailer 
is undeliverable, the Postal Service may notify the mailer's postage 
evidencing system service provider to temporarily suspend the mailer's 
account prior to the end of the 14-day period.
     When a mailer's cumulative revenue deficiency continues to 
increase during this 14-day period, the Postal Service may notify the 
mailer's postage evidencing system service provider to temporarily 
suspend the mailer's account prior to the end of the 14-day period.

Denied Disputes and the Appeal Process

    When a dispute is denied, the mailer has 7 days from the date that 
the Postal Service sends the electronic notification of the denial to 
pay the revenue deficiency or to file an appeal. The mailer may pay the 
deficiency or appeal the decision by accessing the USPS Web-based 
customer payment portal or through an otherwise authorized Postal 
Service payment or appeal method as indicated in the electronic 
notification. The Postal Service will make a final

[[Page 39301]]

decision regarding the appeal request. If the Postal Service upholds 
the mailer's appeal, the Postal Service will notify the mailer of the 
decision, and the mailer is required to take no further action. The 
appeal process is as follows:
     The appeal process requires that the mailer provide 
additional evidence to substantiate that the postage affixed was valid 
and sufficient for the postage and service fees associated with the 
mailpiece.
     After 7 days, if a mailer has not taken action to pay or 
appeal the revenue deficiency denied in the dispute request, the Postal 
Service may notify the mailer's postage evidencing system service 
provider to temporarily suspend the mailer's account.
     When an electronic notification that is sent to a mailer 
is undeliverable, the Postal Service may notify the mailer's postage 
evidencing system service provider to temporarily suspend the mailer's 
account prior to the end of the 7-day period.
     When a mailer's cumulative revenue deficiency continues to 
increase during this 7-day period, the Postal Service may notify the 
mailer's postage evidencing system service provider to temporarily 
suspend the mailer's account prior to the end of the 7-day period.

Denied Appeals

    When the Postal Service denies the appeal request, the mailer will 
be notified of the decision. The mailer must then pay the revenue 
deficiency, within 7 days from the date that of the electronic 
notification of appeal denial, by accessing the USPS Web-based customer 
payment portal or through an otherwise authorized Postal Service 
payment method as indicated in the electronic notification. The process 
for denied appeals is as follows:
     If a mailer has not taken action to pay the revenue 
deficiency within 7 days, the Postal Service notifies the mailer's 
postage evidencing system service provider to suspend the mailer's 
account.
     If the electronic notification to a mailer is 
undeliverable, the Postal Service may notify the mailer's postage 
evidencing system service provider to suspend the mailer's account 
prior to the end of the 7-day period.
     If a mailer's cumulative revenue deficiency continues to 
increase during this 7-day period, the Postal Service may notify the 
mailer's postage evidencing system service provider to suspend the 
mailer's account prior to the end of the 7-day period.

Denial of Use of Postage Evidencing Systems

    When a mailer fails to meet the standards, submits false or 
incomplete information, or deposits shortpaid and unpaid mailpieces in 
the mailstream, the Postal Service may deny a mailer use of a postage 
evidencing system.
    Any mailer who deposits mailpieces with shortpaid or unpaid IBI 
postage or fees may be subject to some or all of the following proposed 
actions:
     Collection of the shortpaid or unpaid postage.
     Revocation of the mailer's account privileges.
     Civil and criminal fines and penalties pursuant to 
existing Federal law.
    The Postal Service adopts the following changes to Mailing 
Standards of the United States Postal Service, Domestic Mail Manual 
(DMM), which is incorporated by reference in the Code of Federal 
Regulations. See 39 CFR 111.1.

List of Subjects in 39 CFR Part 111

    Administrative practice and procedure, Postal Service.

    Accordingly, 39 CFR part 111 is amended as follows:

PART 111--[AMENDED]

0
1. The authority citation for 39 CFR Part 111 continues to read as 
follows:

    Authority: 5 U.S.C. 552(a); 13 U.S.C. 301-307; 18 U.S.C. 1692-
1737; 39 U.S.C. 101, 401, 403, 404, 414, 416, 3001-3011, 3201-3219, 
3403-3406, 3621, 3622, 3626, 3632, 3633, and 5001.


0
2. Revise the following sections of Mailing Standards of the United 
States Postal Service, Domestic Mail Manual (DMM), as follows:
* * * * *

600 Basic Standards for All Mailing Services

* * * * *

604 Postage Payment Methods

* * * * *

4.0 Postage Meters and PC Postage Products (``Postage Evidencing 
Systems'')

4.1 Basic Information

* * * * *

4.1.2 Product Categories

    * * * The primary characteristics of postage meters and PC Postage 
products are described below.
* * * * *
    [Revise items 4.1.2b and c as follows:]
    b. PC Postage products allow mailers to purchase and print postage 
with Information-Based Indicia (IBI) directly onto mailpieces, shipping 
labels, and USPS-approved customized labels.
    c. Click-N-Ship and USPS-approved commercial providers offer PC 
Postage products for mailers through subscription service agreements.
* * * * *

4.2 Authorization To Use Postage Evidencing Systems

* * * * *

4.2.4 Denial of Use

    [Revise 4.2.4 as follows:]
    The mailer authorized to use a postage evidencing system may be 
denied use when the mailer:
    a. Fails to comply with mailing standards.
    b. Submits false or incomplete information.
    c. Enters shortpaid or unpaid mailpieces into the mailstream.
    [Renumber current item 4.2.5 as new 4.2.6 and add new item 4.2.5 as 
follows:]

4.2.5 Surrender of Postage Evidencing System

    If authorization to use a Postage Evidencing System is denied, the 
mailer must surrender the systems, upon request, to the service 
provider, USPS, or USPS authorized agent.

4.2.6 Appeal Process

    [Revise text of renumbered 4.2.6 as follows:]
    Appeals regarding standards in this section or on the basis of 
noncompliance may be filed as follows:
    a. IBI postage mailers must appeal under 4.4.8.
    b. All other appeals must be in writing to the manager, Postage 
Technology Management (see 608.8.1 for address).

4.3 Postage Payment

4.3.1 Paying for Postage

    [Revise the first sentence of 4.3.1 as follows:]
    The value of the postage on each mailpiece must be equal to or 
greater than the amount due for the applicable price and any extra 
service fees, or another amount permitted by mailing standards. * * *
* * * * *
    [Renumber current items 4.4 through 4.6 as new 4.5 through 4.7, and 
add new item 4.4 as follows:]

4.4 Shortpaid and Unpaid Information-Based Indicia (IBI)

4.4.1 Definitions

    Mailpieces bearing shortpaid postage are those for which the total 
postage and

[[Page 39302]]

fees affixed are less than the postage required for the applicable 
price and any extra services fees. Mailpieces bearing unpaid IBI are 
those for which the mailer has not paid the postage or additional fees 
due to the lack of affixed postage, the use of counterfeited, 
replicated, duplicated, falsified, otherwise modified IBI, or IBI with 
zero value.

4.4.2 Detection Process for Revenue Deficiency

    For mailpieces with shortpaid or unpaid postage found in the 
mailstream, manual and automated processes are used to detect and 
verify the revenue deficiencies.

4.4.3 Handling of Mailpieces With IBI Postage Revenue Deficiencies

    For confirmed shortpaid or unpaid IBI postage, corrective measures 
may include:
    a. Delivering the mailpiece to the addressee and collecting the 
revenue deficiency as postage due.
    b. Collecting the revenue deficiency from the sender as described 
in 4.4.4 through 4.4.9.
    c. Returning the mailpiece to the sender.

4.4.4 Electronic Notification of Revenue Deficiencies

    Upon confirmation of a revenue deficiency with IBI postage, the 
Postal Service electronically notifies both the mailer and the postage 
evidencing system service provider of the revenue deficiency and 
delivers the mailpiece to the addressee. The notification provides a 
link to the Web-based customer payment portal that permits the mailer 
to pay or dispute the revenue deficiency.

4.4.5 Resolution Process

    A resolution process is provided through the Web-based customer 
payment portal.

4.4.6 Payment Process

    The mailer must make payment within 14 days from the date the 
Postal Service sends the electronic notification by accessing the Web-
based customer payment portal or choose another method identified in 
the notification. Any mailer disputes regarding the revenue deficiency 
must be made during this 14-day period. The postage evidencing system 
service provider may be notified to temporarily suspend the mailer's 
account under the following conditions:
    a. After 14 days, if a mailer has not paid or disputed a revenue 
deficiency.
    b. When an electronic notification to a mailer is undeliverable.
    c. When a mailer's cumulative revenue deficiency increases during 
the 14-day period due to additional mailpieces being identified as 
shortpaid or unpaid.

4.4.7 Dispute Process

    Mailers wishing to dispute the deficiency payment must do so within 
14 days by accessing the Web-based customer payment portal or other 
method identified in the electronic notification and substantiate that 
the postage affixed was valid and sufficient for the postage and 
applicable fees. An electronic notification is sent to the mailer of 
the decision to uphold or deny the dispute. If the Postal Service 
upholds the dispute, the mailer is not required to take further action.

4.4.8 Denied Disputes and the Appeal Process

    If a dispute of a revenue deficiency is denied, the mailer has 7 
days from the date of the electronic notification to file an appeal, by 
accessing the Web-based customer payment portal or choosing another 
method identified in the notification. The mailer must provide 
additional evidence to substantiate that the postage affixed was valid 
and sufficient for the postage and fees. If the appeal decision is 
upheld, the mailer takes no further action. The Postal Service may 
notify the postage evidencing system service provider to temporarily 
suspend the mailer's account under the following conditions:
    a. After 7 days, if a mailer has not paid or appealed the revenue 
deficiency.
    b. When an electronic notification to a mailer is undeliverable.
    c. When a mailer's cumulative revenue deficiency increases during 
the 7-day period due to additional mailpieces being identified as 
shortpaid or unpaid.

4.4.9 Denied Appeals

    If the appeal is denied, the mailer must pay the revenue deficiency 
within 7 days from the date of the electronic notification by accessing 
the Web-based customer payment portal or choosing another USPS-
authorized method identified in the notification. The postage 
evidencing system service provider may be notified to suspend the 
mailer's account under the following conditions:
    a. After 7 days, if a mailer has not paid the revenue deficiency.
    b. When an electronic notification to a mailer is undeliverable.
    c. When a mailer's cumulative revenue deficiency increases during 
the 7-day period due to additional mailpieces being identified as 
shortpaid or unpaid.
* * * * *

8.0 Insufficient or Omitted Postage

8.1 Insufficient Postage

8.1.1 Definition

    [Revise the second and third sentences of 8.1.1, and add a new 
fourth sentence as follows:]
    * * * Such individual pieces (or quantities fewer than 10) are 
delivered to the addressee on payment of the charges marked on the 
mail. For mailings of 10 or more pieces, the mailer is notified so that 
the postage charges may be paid before dispatch. For any mailpiece with 
insufficient postage generated by postage evidencing systems, the USPS 
may follow the process in 4.4.4 through 4.4.9.
* * * * *
    [Renumber current item 8.1.7 as 8.1.8 and add new 8.1.7 as 
follows:]

8.1.7 Express Mail Corporate Accounts and Federal Agency Accounts

    Express Mail Corporate accounts and Federal government accounts 
that use a ``Postage and Fees Paid'' indicia are debited for the 
correct amount of postage and fees at the time of mailing.
    [Revise the heading and text of renumbered 8.1.8 as follows:]

8.1.8 Express Mail With Insufficient Postage--Acceptance

    When Express Mail items are received at the office of mailing with 
insufficient postage, the Postal Service will contact the mailer to 
correct the postage deficiency prior to dispatch of the item. If the 
mailer cannot be contacted prior to dispatch, the deficiency is handled 
under 8.1.9.
    [Add new items 8.1.9 through 8.1.11 as follows:]

8.1.9 Express Mail With Insufficient Postage--Processing Operations

    For Express Mail items with insufficient postage that are 
identified during processing operations or at the destination Post 
Office, the Postal Service will:
    a. Endorse the item ``Postage Due.''
    b. Mark the item to show the total deficiency of postage and fees.
    c. Deliver the item to the addressee upon payment of the postage 
due.
    d. If payment is refused by addressee, endorse the item ``Return to 
Sender--Refused'' and return the item to the sender, upon collection of 
the postage deficiency.

[[Page 39303]]

8.1.10 Express Mail With Insufficient IBI Postage--Postage Evidencing 
Systems

    For Express Mail items with insufficient IBI postage generated by 
postage evidencing systems, USPS may follow the process in 4.4.4 
through 4.4.9.

8.1.11 Remailing Express Mail With Insufficient Postage

    Express Mail items with insufficient postage are returned to the 
sender after collecting the postage deficiency when an effort to 
contact the sender before dispatch fails and when the addressee refuses 
to pay the postage due. If the item is remailed as Express Mail, the 
sender must affix a new Express Mail label with new postage and any 
applicable fees.
* * * * *

10.0 Revenue Deficiency

10.1 General

* * * * *

10.1.2 Appeal of Ruling

    [Revise the first sentence of 10.1.2 as follows:]
    Except as provided in 4.4.4 through 4.4.9, 10.2, and 703.1.0, a 
mailer may appeal a revenue deficiency assessment by sending a written 
appeal to the postmaster or manager in 10.1.2a through 10.1.2c within 
30 days of receipt of the notification. * * *
* * * * *
    We will publish an appropriate amendment to 39 CFR Part 111 to 
reflect these changes.

Stanley F. Mires,
Chief Counsel, Legislative.
[FR Doc. 2011-16802 Filed 7-5-11; 8:45 am]
BILLING CODE 7710-12-P