Postage increases stamps on SWIF mail budget

Postage rates for a first-class letter have increased to 39 cents. The 2 cent increase will mean big bucks to some local organizations. [Photo Illustration by Jeff Jones/Independent]

By Bill Donovan
Staff writer

GALLUP — Postage increases that went into effect last week nationwide will cost the Southwest Indian Foundation an extra $150,000 a year, officials said Monday.

Raising the first-class postage rate from 37 to 39 cents resulted in a increase across the board for other postage costs of just over 5 percent.

And that's where SWIF comes in.

SWIF, a non-profit charitable organization headquartered here in Gallup, mails out tens of million of catalogs a year to destinations all over the world.

Bill McCarthy, SWIF's executive director, said the organization spent more than $3 million last year in bulk mailing. With the increase, that will go up to almost $3.2 million this year.

Post office officials said last week that although it was publicized months in advance, the increase caught quite a few local people by surprise.

The price increase took effect on Jan. 9 and by the next day, the main post office station had run out of two-cent stamps for a day, forcing people either to go to the contract station at the California Superama on U.S. Historic Highway 66 or purchase either one-cent or three-cent stamps.

But many in Gallup decided to wait for the two-cent stamp because of its display of a turquoise squash blossom.

SWIF didn't have to worry about stamps because most of its mailings is through the new bulk rates. The organization uses UPS to mail items that people purchase from its several mailings throughout the year.

Over the years, that mailing has grown to the point where SWIF is now the biggest bulk mailer in the state and the biggest user of UPS in the state. It's so big that it has its own ZIP code 87302.

McCarthy pointed out that this was the first increase in postage rates since 2002; so the actual increase has been just over 1 percent a year. "The problem is that it comes all at once," he said.

While many companies facing a $150,000 a year increase would just decrease their mailings to make up the difference, McCarthy said SWIF has decided to take a different approach by being more aggressive in its mailing and by doing so, increase its revenue.

The organization now has a computer system that tags each person on the group's mailing list as to their response to previous mailings.

For example, SWIF's biggest mail is the one before Christmas some 11 million catalogs are sent to people all over the world.

But other mailings are more selective, geared to a certain segment of that 11 million list. For example, those on the active list some 150,000 names represent those who have purchased from a catalog during the past year.

McCarthy said that by being more aggressive, the organization can expect greater returns from the mailings.

"We may have to pay a little more in postage, but we will also exact more in revenue," he said. And if things work out, that increase in revenue will more than make up for the extra postage costs.

McCarthy said SWIF has also in the past few years been more aggressive in getting as much of a discount from the post office as possible by taking advantage of postage regulations.

For example, having 10 or more addresses in each ZIP district, allows for the best postage rate. But SWIF was unable to take advantage of this discount in all of the carrier routes since in many of them it had only four, five or six on its mailing list.

To solve this problem, SWIF made an agreement with the Eddie Bauer Corp., which mails out clothing catalogs and found itself facing the same problem.

But by combining their mailings and having the catalogs sent out at the same time, said McCarthy, sharply increased the number of customers in each carrier route to the point that both companies were able to get the maximum discount in almost all of the carrier routes, thus saving each organization hundreds of thousands of dollars a year.

"You have to take these kinds of efforts to get the best deal possible," said McCarthy.