On July 13, 2025, USPS implemented a postage rate increase that will impact virtually every marketer using direct mail. But this isn’t just another budget hit; it’s a call to optimize.
Let’s break down what’s changing, what it means for your bottom line, and most importantly, how to offset these increases with smart mail piece design, USPS promos, and better targeting that keeps your ROI strong.
The Postal Regulatory Commission has approved an average 7.4% increase across Marketing Mail, effective Sunday, July 13, 2025. The table shows what that looks like for some common mail classifications.
One significant structural change is the elimination of the NDC (Network Distribution Center) discounts for Marketing Mail, which may shift your cost structure depending on your entry strategy. The workshare discount earned by mail dropship to those distribution centers has been eliminated as of July 13th, and those mail pieces will be directed to Local Entry, which offers no discount.
|
Mail Tier / Format |
Old Rate |
New Rate (7/13/25) |
Avg Increase |
|
Marketing Mail Automation Letter |
~\$0.318–\$0.402 |
~\$0.355–\$0.433 |
~8.95% |
|
Nonprofit Automation Letter |
~\$0.146–\$0.230 |
~\$0.161-\$.239 |
~5.5% |
|
Marketing Mail Automation Flats |
~\$0.617–\$1.041 |
~\$0.831–\$1.22 |
~15.6% |
At high volumes, even a small rate hike can add up fast. A 100,000-piece campaign experiencing a $0.035 increase will see an additional $3,500 in postage.
But rising postage doesn’t mean you need to pull back on your direct mail programs. With the right adjustments, you can reduce cost per acquisition and boost conversion even as rates rise.
With the elimination of NDC (Network Distribution Center) discounts, the alternative is to qualify for SCF (Sectional Center Facility) entry discounts. By managing your data properly, you can still drive much of your mail to SCFs for the lowest Marketing Mail Automation rates.
However, some pieces will not qualify based on the Zip code they are mailing to, or if the volume density just isn’t there.
That’s where commingling comes in. Commingling, combining multiple mailers’ pieces into a single, larger mailing, remains one of the most effective ways to optimize postage when list density falls short.
By commingling your lower-volume pieces with those from other clients, we create sufficient volume to:
At sg360°, our in-house commingling strategy provides more control over the commingle process, shortens your in-home window, and provides more accurate delivery verification, all while keeping your postage lean.
Postage savings doesn’t just rely on discounts, it’s about machinability and size. Many mail owners pay more than needed by defaulting to oversized formats (Flats) for noticeability in the mailbox.
The importance of direct mail format design is often ignored. But according to William Anderson, sg360° Director of Postal Affairs & Structural Design, "It’s the format that drives the initial engagement. Having an effective overall design that mails with efficiency is what’s crucial to its overall performance."
The sg360° Structural Design Team can drive the unique factor in your mailer while preserving your postage budget.
Bonus: A format refresh can signal novelty and recapture attention from fatigued audiences.
The USPS offers a variety of promotions that reduce your per-piece postage when you incorporate value-added tactics into your campaign.
The table shows some key promos to make use of in 2025.
Stacking these savings with intelligent creative gives you a postage break and more compelling mail.
|
Promotion |
Timing |
Discount |
Tactic |
|
Tactile, Sensory, & Interactive |
Feb–Jul 2025 |
4% |
Multi-sensory Experience through Sight, Sound, and Touch |
|
Integrated Technology |
6 Consecutive months of your choosing in 2025 |
3% |
Use technology to enhance Mail performance |
|
Continuous Contact |
April–Dec 2025 |
3% |
Multiple touchpoints to the same address. |
|
First-Class Mail Advertising |
Sept–Dec 2025 |
3% |
Product advertising in traditional First-Class Mail. Includes Postcards! |
|
Catalog Insights |
Oct 2025-Jun 2026 |
10% ! |
A bound mail piece featuring products or services for sale. Includes Letters! |
|
Add-On Promotion. Can be combined with the above Promotions for additional savings |
|||
|
Sustainability Add-On |
All Year |
1% Extra |
Sustainably sourced material |
|
Informed Delivery Add-on |
All Year |
1% Extra |
Digital ride-along campaigns |
If you’re still mailing to broad segments or outdated lists, you’re leaving both money and performance on the table.
At sg360°, we help clients hone in on mail volume while improving conversions, simply by getting laser-focused with audience insights.
Smarter Targeting Moves:
By reaching fewer, better-qualified people with more relevant messaging, your mail works harder and smarter, getting more bang for your postage bucks.
While some brands will scale back on direct mail due to cost concerns, optimized mailers will double down with leaner, smarter, and more effective campaigns. This is your opportunity.
Rather than cutting back on mail, step up your strategy:
1. Audit your current postage mix – Look at entry and destination points, machinable formats for processing, and eligibility for automation.
2. Map USPS promos to your calendar – Build savings into your planning cycle.
3. Run structural design tests – Try alternative formats to cut cost without hurting impact.
4. Level up audience segmentation – Leverage insights and modeling to get smarter about who you mail.
5. Talk to a postal optimization expert – Partner with a mailer who knows the full USPS playbook (hint: that’s us).
Rising postage is a challenge. But it’s also a catalyst. The marketers who adapt fastest and optimize most effectively won’t just protect their budgets, they’ll grow market share while others pull back.
And if you need help decoding your best path forward, sg360° is ready with the data, design, and distribution expertise to help you make every piece count.