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WASHINGTON – How sure is the post office that direct-mail advertising works? So sure it’s willing to offer a guarantee.

The U.S. Postal Service wants to launch a test in May, encouraging more direct-mail ads by offering refunds to companies if their sales effort isn’t a success.

Faced with heavy losses as people turn to the Internet to send letters and bill payments — at the same time the recession discouraged advertising mail — the self-supporting agency is looking for ways to increase its business.

“The top advertisers in America represent $90 billion in total expenditures for media advertising,” the post office noted in its proposal for the test. Of that, the post office currently gets about 3 percent, meaning there is a “huge revenue potential for the Postal Service.”

So it is proposing a test, called Mail Works Guarantee, in which it would offer 16 companies a money-back chance to boost their sales by mailing ads. The proposal is under consideration by the Postal Regulatory Commission, which has to approve the test before it can begin.

Under the proposal, the post office would pick 16 businesses that each spend at least $250 million a year on advertising but use direct mail for little of it.

Each company would have to agree to mail between 500,000 and 1 million first-class or standard mail items at regular prices. If the results failed to reach a pre-determined level, the company would be entitled to a credit of up to $250,000 for its postage expenses.

 

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