Postal Service's Processing of ZIP + 4 Letters Receiving Postage Discounts

GAO discussed its review of the U.S. Postal Service's (USPS) implementation of the ZIP + 4 program to reduce costs with automatic letter sorting. USPS allows first-class letters and cards to be mailed at a discount of 5 or 9 cents if they are mailed in sufficient quantity and contain the correct ZIP + 4 codes. GAO found that: (1) of the 5 billion discounted letters USPS received over an 18-month period, it processed only 10 percent of the letters automatically to carrier routes because many mail processing centers did not have automated sorting equipment; (2) although USPS plans to automate about 215 centers nationwide, it automated only 130 during fiscal year 1986; (3) 90 percent of the 5 billion letters received the 5-cent discount and the remaining 10 percent received the 9-cent discount; (4) USPS gave about $25 million in discounts on mail that it did not automatically sort; and (5) although the 130 centers were responsible for carrier-route sorting 43 percent of the 5 billion letters, they automatically sorted only about 23 percent. GAO also found that some letters never reached the bar-code sorters because: (1) optical character readers rejected letters as unreadable; (2) the number of letters going to some delivery zones was to small to justify the use of sorters; (3) there was not enough time to use the sorters; and (4) many centers did not have procedures for capturing all locally destined letters in place.