Full Service Verification Process Industry Review

1. Verification ProcessforFull Service Mailings Effective November 30, 2009

3. Initial Verification – Full Service Disqualifiers No electronic documentation No IMcb on container placards (>3) OR Container placards are inside (covered by) the stretch-wrap Sample size 6; this is more than 50% error No IMtb on handling unit label (>3) Sample size 8; this is more than 37% error No IMb on mail pieces (>3 pcs) Sample size 30; this is more than 10% error These disqualifiers are effective November 30, 2009 If any of these errors are found Do not proceed with any other acceptance verifications until full-service issues are resolved

4. Full-Service Disqualifiers – Discount Forfeiture If a mailing contains one of the Full-Service Disqualifiers Acceptance personnel will process the postage statement as Full Service Acceptance personnel will enter a manual adjustment transaction for loss of Full-Service discount This process Enables the Full-Service ACS to process Other Full-Service benefits may be affected based on barcode error type

5. Acceptance clerks will scan samplings of Full-Service mailings at acceptance locations The purpose of sampling is to verify that Full-Service mailings meet barcode, preparation, and data requirements to qualify for Full Service prices The sampling generally* consists of the scanning all of the following: 3 container labels 5 handling unit (trays/sacks/bundles) labels 30 mail pieces (10 pieces each from 3 separate trays/sacks/bundles) The initial verification scanning process should be completed in its entirety before moving to the in-depth procedure Completing the scanning will alert the clerk to additional issue that may need to be addressed in an in-depth Clerks should notate barcode errors on the 2866 as they identify them in the scanning procedure *Exceptions will be explained later in this presentation Full-Service Mailing Initial Verification Procedures

6. Summary of scanning requirements in 4 mailing environments Full-Service Mailing Initial Verification Procedures *Prior to arriving at the 3rd- Party facility, if the mailing was produced at an originating facility, the BME clerk at the originating facility is required to collect a FS mail sample for each mail job produced, using the appropriate process for Staged or Continuous Mailings.

7. Containers – Initial Process Select and Scan 3 containers Scanning detects 1 error Scan 3 additional containers (in addition to the 3 required for cursory – total of 6) No other errors – advise mailer to correct 1 or more additional errors – perform in-depth (document the barcode error descriptions only) 3 or more “No Barcode” on placard errors Mailing not qualify for Full Service prices Full-Service Scanning Errors

9. Document only the containers with placard or sort errors

10. Label errors*

11. Document IMcb errors the same as a line item (Top Line, Content line, FS Barcode) error

12. Presort errors**

13. Document handling unit to container presort errors (correct handling unit on container)*If only barcode errors are detected you only need document the error description. You will not need to complete the total error calculation and additional postage computation **If a presort error is detected then you will need to complete the 2866 to determine additional postage assessment. You will not include the barcode errors in this computation.

14. In-depth IMcb Placard Error Documenting IMcb FS Barcode error on form 2866 Document “Pallet label” block with label information In the “incorrect” block capture the MID and serial number in the barcode In the error description section use error code L-6 Other Record the error issue Full-Service Scanning Errors City ST Zip Code FCM Ltr 5D Auto FS IMcb ABC Mailer FS IMcb MID and Unique Serial No.

15. In-depth IMcb Placard Error Documenting IMcb FS Barcode error on form 2866 Document error description – use error code “L6 Other” Record the error issue e.g. Not readable, Invalid content, Full-Service Scanning Errors L-6 Other (Describe) FSIMcb – Not Readable

16. In-depth Container Sort Error Performing container presort verifications should continue as you conduct them today Detecting barcode quality issues could be an indication of other quality issue – you may want to perform full in-depth Conduct initial verification on content on the container – may trigger in-depth Performing container content (presort) check Verify all other placard content is correct Verify handling unit content is correct for the container Use appropriate Labeling list or Customer Supplier Agreement (CSA) required separations In-depth verification recorded on form 2866 as currently conducted* * IMcb barcode quality errors will not be included in these additional postage results Full-Service Scanning Errors

17. Handling Unit – Initial Process From one of the scanned containers select and scan 5 Trays/Sacks Scanning detects 1 error Scan 3 additional containers (in addition to the 5 required for cursory – total 8) No other errors – advise mailer to correct 1 or more additional errors – perform in-depth (document the barcode error descriptions only) 3 or more “No Barcode” on label errors Mailing not qualified for Full Service prices Full-Service Scanning Errors

19. Document only the handling units with label or sort errors

20. Label errors*

21. Document IMtb errors the same as a line item (Top Line, Content line, FS Barcode) error

22. Presort errors**

23. Document handling unit to container presort errors (correct handling unit on container)*If only barcode errors are detected you only need document the error description. You will not need to complete the total error calculation and additional postage computation **If a presort error is detected then you will need to complete the 2866 to determine additional postage assessment. You will not include the barcode errors in this computation.

24. In-depth Handling Unit Sort Error Performing handling presort verifications should continue as you conduct them today Detecting barcode quality issues could be an indication of other quality issue – you may want to perform full in-depth Conduct initial verification on content on the handling unit – may trigger in-depth Performing handling unit content (presort) check Verify all other label content is correct Verify handling unit content is correct for the container Use appropriate Labeling list In-depth verification recorded on form 2866 as currently conducted* * IMtb barcode quality errors will not be included in these additional postage results Full-Service Scanning Errors

25. Mail Piece – Initial Process Select 3 of the 5 scanned bundles, or Trays/Sacks and scan 10 pieces in each Scanning detects 3 errors Errors are barcode readability errors Conduct MERLIN verification Conduct manual barcode verification process Errors are barcode content errors ZIP code related errors – incorrect routing (presort) less than 11 digit (content) Other content errors – document content errors No other errors – advise mailer to correct 1 or more additional errors – perform in-depth (document the barcode error descriptions only) 3 or more “No Barcode” on mail pieces Mailing does not qualified for Full Service prices Full-Service Scanning Errors

26. Mail Piece – Initial Process Select 3 of the 5 scanned bundles, or Trays/Sacks and scan 10 pieces in each Scanning detects 3 errors Barcode readability errors Conduct MERLIN verification Conduct manual barcode verification process Barcode Full Service content errors ZIP code related errors – presort verification Other content errors – document content errors No other errors – advise mailer to correct Mailer doesn’t want to correct – perform in-depth 3 or more additional errors – perform in-depth Full-Service Scanning Errors

27. In-depth IMb Content Error Documenting FS IMb content error on form 2866 Document “Tray/Sack label” block with label information where the 10 piece sample was taken from Document error descriptions using section 8A. Miscellaneous Errors Full-Service Scanning Errors City ST Zip Code FCM Ltr 5D Auto FS IMtb ABC Mailer

28. Finalizing In-depth Process Disposition Mailings with Full-Service errors will be accepted as is No additional postage will be collected Calculating for additional postage will begin in March 2010 Provide copy of PS Form 2866 to mailer Full-Service Scanning Errors

29. Additional Postage Transaction Adjustment Confirmation Page No IMB on the Mailpieces

30. Finalizing In-depth Process Effective March 2010 we will implement the completion of the In-depth verification procedure The form 2866 will be completed to compute the percent of error and the additional postage calculation Business Mail Acceptance will continue to assess the acceptance and verification processes for appropriate changes: impacts to mail processing operations magnitude of mailing quality errors implementation of technological features to further define or redefine the verification process Changes to the current acceptance processes will be communicated through the DMM Advisory Full-Service Verification Processes