[Federal Register Volume 83, Number 141 (Monday, July 23, 2018)]
[Proposed Rules]
[Pages 34807-34811]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-15617]



39 CFR Part 111

New Mailing Standards for Merchandise Return Service

AGENCY: Postal ServiceTM.

ACTION: Proposed rule.


SUMMARY: The Postal Service is proposing to revise Mailing Standards of 
the United States Postal Service, Domestic Mail Manual (DMM[supreg]) to 
provide for new procedures for the processing and rating of Merchandise 
Return Service (MRS) pieces, and in the future, to transition all 
current MRS permit holders to use the new procedures.

DATES: Submit comments on or before August 22, 2018.

ADDRESSES: Mail or deliver written comments to the manager, Product 
Classification, U.S. Postal Service, 475 L'Enfant Plaza SW, Room 4446, 
Washington, DC 20260-5015. If sending

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comments by email, include the name and address of the commenter and 
send to [email protected] with a subject line of 
``Merchandise Return Service''. Faxed comments are not accepted. You 
may inspect and photocopy all written comments, by appointment only, at 
USPS Headquarters Library, 475 L'Enfant Plaza SW, 11th Floor North, 
Washington, DC 20260. These records are available for review Monday 
through Friday, 9 a.m.-4 p.m., by calling 202-268-2906.

FOR FURTHER INFORMATION CONTACT: Direct questions to Karen F. Key by 
email at [email protected] or phone at (202) 268-7492, or Vicki 
Bosch by email at [email protected] or phone at (202) 268-4978.

SUPPLEMENTARY INFORMATION: As part of its Package Platform initiative, 
the Postal Service is leveraging the devices that were installed as 
part of the Automated Verification System to enhance the capability of 
equipment used for the processing of package-size mailpieces. The 
upgraded equipment is able to capture near real-time data on mailpiece 
dimensions, weight, mail class or product, and the presence of Extra 
Services, and to transmit these data to Postal Service information 
systems as applicable. The Postal Service is proposing to use this new 
technology to streamline its processes for the identification, rating, 
and postage assessment of returns. Under this process, automated 
package-sorting equipment will identify return packages as they pass 
special scanners, determine the weight, dimension and mail class of the 
packages, use the captured data to determine postage charges associated 
with each package, and enable account holders to pay the postage for 
the returns electronically.
    This improved functionality will generally eliminate the need to 
manually weigh and rate MRS mailpieces, eliminate the scan-based 
payment process used with USPS Return Services (a current category of 
MRS), and eliminate the need for processes to estimate postage for MRS 
pieces via sampling under the Postage Due Weight Averaging Program.
    The Postal Service is now proposing to create a new rating and 
payment methodology within the MRS product line. This new process will 
incorporate features of both traditional MRS and USPS Return Services. 
Returns able to meet the eligibility criteria for this new methodology 
will be categorized under the MRS product line. The new methodology is 
expected to replace the existing USPS Return Services process at some 
point in the near future, and is intended to ultimately eliminate the 
need for the manual rating process used with traditional MRS. The 
Postal Service expects to eliminate the use of USPS Return Services and 
the scan-based payment process no sooner than January 2020 and 
traditional MRS no sooner than January 2021. During the transition to 
the new methodology, the Postal Service intends to work with the 
mailing industry to ensure all existing USPS Return Services and MRS 
permit holders are transitioned to the new process before these 
deadlines arrive. Permit holders who are unable to meet the deadlines 
stated above can contact the Postal Service to request consideration 
for an extension. The Postal Service will evaluate extension requests 
on a case-by-case basis.
    The new methodology will include many of the features associated 
with the current USPS Return Services process, and will be tentatively 
called Automated Returns. The three service categories under Automated 
Returns are proposed to be Automated Priority Mail Returns, Automated 
First-Class Package Returns, and Automated Ground Returns, which will 
be linked to Priority Mail[supreg], First-Class Package 
Service[supreg]--Commercial, and Parcel Select GroundTM 
product prices, respectively.
    For Priority Mail, Commercial Plus[supreg] and Commercial 
Base[supreg] prices are proposed to apply to qualifying Automated 
Returns account holders, based on the payer's outgoing volume. 
Negotiated Service Agreement prices are also expected to be available 
for eligible customers using Automated Returns.
    Similar to the process used with traditional MRS and USPS Return 
Services, the Postal Service does not expect to require account holders 
to pay annual permit fees and/or annual account maintenance fees to 
receive returns under the new Automated Returns methodology.
    Under the new Automated Returns methodology, the Postal Service 
proposes to require authorized permit holders to pay postage and Extra 
Service fees through the Enterprise Payment System (EPS).
    EPS is a new payment system designed to provide a single point for 
all payment-related activities, and will make payments easier for 
permit holders who pay the Postal Service through various payment 
methods or mail from different locations. To use EPS, businesses will 
establish a single account to pay for all products and services. This 
account would be recognized by all postal facilities. Commercial 
mailers will set up an Electronic Payment Account (EPA) that can be 
used for electronic funds transfer, retail deposit, mobile deposit, and 
ACH Debit. Business mailers will be able to view payment information in 
a consolidated format on an EPS dashboard that shows account balances, 
postage statement reports, transactions history, and other information. 
For EPS set-up or support, contact [email protected] or call 1-800-
    The Automated Returns methodology is expected to use the same 
prices as those currently applied to USPS Return Services, and to apply 
those prices to each individual return mailpiece in near real time. 
Because of the greater level of accuracy and granularity associated 
with the new process, the Postal Service does not expect current USPS 
Return Services permit holders to be negatively affected. As a result, 
the Postal Service proposes to notify and transition current USPS 
Return Services permit holders meeting the necessary criteria to an EPA 
account automatically, and unless the permit holder objects, to convert 
their permits to the Automated Returns methodology without further 
action required by the permit holder. The Postal Service expects to 
work with current traditional MRS permit holders to eventually 
transition them to the new process.
    The Postal Service proposes to limit Extra Services available for 
the new Automated Returns methodology to Insurance, Signature 
ConfirmationTM, and Certificate of Mailing. USPS 
Tracking[supreg] will still be included as part of the service. The 
Postal Service proposes to omit the options to use Registered 
Mail[supreg], Special Handling, and Return Receipt for Merchandise with 
Automated Returns. Over time, the use of these services has declined, 
and they are now rarely used with MRS. The Postal Service believes that 
permit holders have generally transitioned to other services to replace 
the functions previously filled by these services. The Postal Service 
also proposes to omit the Mailing Acknowledgement option currently used 
with traditional MRS. A mailer may continue to obtain a Certificates of 
Mailing, if the returns piece is brought to the retail service counter.
    It is expected that not all returns mailpieces will be capable of 
being processed on Postal Service automated package sorting equipment. 
Returns containing hazardous materials, such as regulated and sharps 
medical waste and lithium batteries, sometimes bypass mechanized 
processing and are instead manually handled in USPS processing plants. 
The Postal Service proposes to implement an alternative process to 
capture and rate these mailpieces. In

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some cases, the Postal Service expects to use an average price 
generated from the data collected in the prior month and to apply the 
average price to assess the postage for each return.
    Although exempt from the notice and comment requirements of the 
Administrative Procedure Act (5 U.S.C. 553(b), (c)) regarding proposed 
rulemaking by 39 U.S.C. 410(a), the Postal Service invites public 
comments on the following proposed revisions to Mailing Standards of 
the United States Postal Service, Domestic Mail Manual (DMM), 
incorporated by reference in the Code of Federal Regulations. See 39 
CFR 111.1.
    We will publish an appropriate amendment to 39 CFR part 111 to 
reflect these changes, if our proposal is adopted.
    Accordingly, 39 CFR part 111 is proposed to be amended as follows:

List of Subjects in 39 CFR Part 111

    Administrative practice and procedure, Postal Service.


1. The authority citation for 39 CFR part 111 continues to read as 

    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.

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

Mailing Standards of the United States Postal Service, Domestic Mail 
Manual (DMM)

* * * * *

500 Additional Services

* * * * *

505 Return Services

* * * * *
    [Add a new 505.3.8 through 505.3.8.7 to read as follows:]

3.8 Automated Returns

3.8.1 Basic Standards

    Automated Returns allows an authorized shipping products account 
holder to pay the postage and extra service fees on single-piece priced 
Automated Priority Mail Returns, Automated First-Class Package Returns 
and Automated Ground Returns parcels returned to the account holder by 
senders (mailers) via a special barcoded label produced by the account 
holder. Unless otherwise restricted, any mailable matter may be mailed 
using any of the Automated Returns options. Any content that 
constitutes First-Class Mail matter may only be mailed using Automated 
Priority Mail Returns. Automated Returns are subject to the following 
    a. Availability: Automated Returns is available to the account 
holder for mailing to the account holder's designated address on the 
USPS Automated Returns label(s).
    b. Payment Guarantee: The account holder must guarantee payment of 
the proper postage and extra service fees (except for insurance, 
Signature Confirmation, and Certificate of Mailing, when purchased by 
the sender) on all parcels returned via a special label produced by the 
account holder. The account holder must have sufficient funds in their 
Electronic Payment Account to pay the postage and extra service fees on 
an ongoing basis.
    c. Where Service Established: Automated Returns accounts may be 
established at any Post Office in the United States and its territories 
and possessions or at any U.S. Military Post Office overseas APO/FPO/
DPO. Automated Returns is not available for returns from any foreign 
    d. Official Mail: Any authorized user of official (penalty) mail 
may use Automated Returns subject to the standards in 703.7.0, which 
supersede any conflicting standards below.

3.8.2 Accounts

    Automated Returns accounts are subject to the following:
    a. Account Application: An approved shipping products account must 
be established to use Automated Returns. Applicants must establish a 
shipping products account by completing PS Form 3615 in hardcopy or 
online through the Business Customer Gateway.
    b. Advance Deposit Account: The account holder must pay postage and 
extra service fees through an Enterprise Payment System (EPS) Account 
(EPS account holder) and agree to the terms and conditions for use of 
such EPS Account.
    c. Application Process: Applicants must have a valid Enterprise 
Payment Account and be registered in the Business Customer Gateway. 
Except for Automated Returns labels generated by the USPS Application 
Program Interface (API), all returns labels that have properly 
constructed Intelligent Mail package barcode approved by the National 
Customer Support Center (NCSC).
    d. Canceled Accounts: If the account is cancelled by the EPS 
account holder, Automated Returns mail bearing the sender's return 
address is returned to the sender; otherwise, it is treated as dead 
    e. Account Cancellation: The USPS may cancel an account if the EPS 
account holder refuses to accept and pay postage and fees for Automated 
Returns mailpieces, fails to keep sufficient funds in the advance 
deposit account to cover postage and fees, or distributes return labels 
that do not meet USPS standards.
    f. Reapplying After Cancellation: To receive a new account after a 
previous Automated Returns account is canceled, the applicant must 
amend the PS Form 3615 on file to reflect the new application date, or 
reregister in the Business Customer Gateway. If not using labels 
generated by the USPS Application Program Interface (API), applicants 
must submit for approval two samples for each label format to the NCSC. 
In addition, applicants must provide evidence that the reasons for the 
account cancellation are corrected, and maintain funds in their advance 
deposit account sufficient to cover normal returns for at least 2 
    g. Using Other Post Offices: The account holder may distribute 
Automated Returns labels for return through other Post Office locations 
when the account holder opens and keeps their advance deposit account 
at the Post Office where the permit is issued and supplies that 
Postmaster the name, address, and telephone number of a representative 
in each additional station or branch if different from the information 
on the application.

3.8.3 Postage and Prices

    Postage and prices are subject to the following:
    a. Postage: Postage is calculated based on the weight of the parcel 
and zone associated with the point or origin and delivery ZIP Code, 
except that postage for Automated First-Class Package Returns is based 
only on the weight of the parcel. Automated Returns mailpieces are 
charged postage and Extra Service fees based on the service type code 
embedded in the Intelligent Mail Package barcode (IMpb). If all or part 
of the IMpb is unreadable, or the mailpiece is unable to be priced 
based on the data collected, postage will be based on the average 
postage per mailpiece recorded for that EPS account holder from the 
previous month or quarter, as applicable. If an EPS account holder has 
no demonstrated payment history, postage will be determined by the 
Postal Service based on data for comparable account holders.
    b. Prices: Prices for Automated Priority Mail Returns, Automated 

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Class Package Returns, and Automated Ground Returns mailpieces are 
charged as follows:
    1. Commercial Base prices are available for account holders using 
Automated Priority Mail Returns, when all applicable requirements are 
    2. Commercial Plus prices are available for Automated Priority Mail 
Returns mailpieces that qualify for Commercial Base prices and for 
which the account holder has a customer commitment agreement with the 
USPS (see 223.1.3).
    3. First-Class Package Service--Commercial prices are available for 
Automated First-Class Package Returns mailpieces when all applicable 
requirements are met.
    4. Commercial Parcel Select Ground prices are available for 
Automated Ground Returns mailpieces when all applicable requirements 
are met.
    c. Extra and Additional Services: The account holder may obtain 
extra and additional services with Automated Returns as follows:
    1. Insurance--Insurance is available for mailpieces that have the 
applicable service type code for insurance imbedded into the IMpb on 
the label, and for which the account holder has provided electronic 
data that supports the value of the merchandise being returned (see 
503.4.2). Only the account holder may file a claim (see 609).
    2. Signature Confirmation--Signature Confirmation service is 
available for Automated Returns (see 503.8.0).
    3. Pickup on Demand Service--Pickup on Demand service is available 
for Automated Returns (see 507.7.0).

3.8.4 Certificate of Mailing

    Customers (mailers) mailing an Automated Returns mailpiece may 
obtain a certificate of mailing at their own expense at the time of 
mailing by presenting the certificate at a Post Office retail unit to 
obtain the receipt.

3.8.5 Labels

    Distribution and preparation of labels are subject to the 
    a. Distribution of Labels: Automated Returns labels may be 
distributed to customers as an enclosure with merchandise, as a 
separate item (including when requested electronically through the 
Business Customer Gateway for printing and delivery to the customer by 
USPS), as an electronic transmission for customer downloading and 
printing, or through one of the account holder's designated pickup 
facilities. Any such label distributed to a customer must meet USPS 
format standards, including the requirement to furnish instructions.
    b. Label Preparation: Automated Returns labels must meet the 
standards in the Parcel Labeling Guide available on the PostalPro 
website. Standard label sizes are 3 inches by 6 inches, 4 inches by 4 
inches, or 4 inches by 6 inches, and must be certified by the USPS for 
use prior to distribution. All other label sizes and other privately 
printed labels require written approval from the NCSC. The label must 
include an Intelligent Mail package barcode, accommodate all required 
information, be legible, and be prepared in accordance with Publication 
199, Intelligent Mail Package Barcode (IMpb) Implementation Guide, 
available on the PostalPro website. EPS account holders or their agents 
may distribute approved return labels and instructions by means 
specified in 3.5.1. EPS account holders or their agents must provide 
written instructions to the label end-user (mailer) as specified in 
3.5.5. Labels cannot be faxed to customers (mailers). If all applicable 
content and format standards are met, Automated Returns labels may be 
produced by any of the following methods:
    1. As an impression printed by the EPS account holder directly onto 
the mailpiece to be returned.
    2. As a separate label preprinted by the EPS account holder to be 
affixed by the customer onto the mailpiece to be returned. The reverse 
side of the label must bear an adhesive strong enough to bond the label 
securely to the mailpiece. Labels must be printed and delivered by USPS 
to the customer when requested electronically by the EPS account holder 
or its agents through the Business Customer Gateway, or provided as an 
electronic file created by the EPS account holder for local output and 
printing by the customer. The electronic file must include instructions 
that explain how to affix the label securely to the mailpiece to be 
returned, and that caution against covering with tape or other material 
any part of the label where postage and fee information is to be 
    c. Labeling Instructions: Written instructions must be provided 
with the label that, at a minimum, directs the customer to do the 
    1. ``If your name and address are not already preprinted in the 
return address area, print them neatly in that area or attach a return 
address label there.''
    2. ``Attach the label squarely onto the largest side of the 
mailpiece, centered if possible. Place the label so that it does not 
fold over to another side. Do not place tape over any barcodes on the 
label or any part of the label where postage and fee information will 
be recorded.''
    3. ``Remove or Obliterate any other addresses, barcodes or price 
markings on the outside of the parcel.''
    4. ``Mail the labeled parcel at a Post Office, drop it in a 
collection box, leave it with your letter carrier, or schedule a 
package pickup at usps.com.''

3.8.6 Enter and Deposit

    The EPS account holder's customers may mail the Automated Returns 
mailpiece at any Post Office; any associated office, station, or 
branch; in any collection box (except a Priority Mail Express box); 
with any rural carrier; by package pickup; on business routes during 
regular mail delivery if prior arrangements are made with the carrier; 
as part of a collection run for other mail (special arrangements might 
be required); or at any place designated by the Postmaster for the 
receipt of mail. Automated Returns mailpieces deposited in collection 
boxes without valid return addresses are treated as undeliverable mail.

3.8.7 Additional Standards

    Additional mailing standards applicable to each service option are 
as follows:
    a. Automated Priority Mail Returns may contain any mailable matter 
weighing no more than 70 pounds. APO/FPO mail is subject to 703.2.0 and 
703.4.0, and Department of State mail is subject to 703.3.0. Automated 
Priority Mail Returns receive expeditious handling and transportation, 
with service standards in accordance with Priority Mail. Automated 
Priority Mail Returns mailed under a specific customer agreement is 
charged postage according to the individual agreement. Commercial Base 
and Commercial Plus prices are the same as for outbound Priority Mail 
in Notice 123, Price List.
    b. Automated First-Class Package Returns handling, transportation, 
and eligibility of contents are the same as for outbound First-Class 
Package Service -- Commercial parcels under 283. Automated First-Class 
Package Returns may not contain documents or personal correspondence, 
except that such parcels may contain invoices, receipts, incidental 
advertising, and other documents that relate in all substantial 
respects to merchandise contained in the parcels.
    c. Automated Ground Returns provides ground transportation for 
mailpieces containing mailable matter weighing no more than 70 pounds 
and meeting the content standards in 153.3.0. Automated Ground Returns 
assumes the handing and transportation

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and service objectives for delivery of USPS Retail Ground.
* * * * *

Ruth Stevenson,
Attorney, Federal Compliance.
[FR Doc. 2018-15617 Filed 7-20-18; 8:45 am]