Some initial reactions to the proposed rate changes and incentives announced this week by the  US Postal Service indicate that they might not have the desired effect the USPS is looking for. On Tuesday, the USPS said it is seeking to raise the rate of a first-class stamp by 2 cents. The proposal also included an increase of 8% in costs for periodical mailers of 5.1% for catalogers as well as a pair of incentives intended to drive mail use by business mailers. The USPS has said it needs the revenue that would be generated by these changes to fill a projected budget gap of $7 billion next year. However, if these changes were put into place – they need to be approved by the Postal Regulatory Commission – the Postal Service might not see the increase in revenue it is expecting from some business mailers. “It is a given that every time the Postal Service raises rates, catalog volumes go down,” said Don Landis, VP of postal affairs at catalog printer Arandell Corp.  Which is why Landis said he was surprised that the Postal Service would consider raising rates for catalogers when its goal is to increase revenue. Catalog volume still hasn’t rebounded from the last rate increase and the effects of the poor economy, said Landis. As a result, Arandell’s customers “are looking at other media to use instead of catalogs,” Landis reported. “Catalogs still work but they are getting very expensive,” he noted. The incentives that were part of this week’s proposal may not have the desired effect, either. The Reply Rides Free program would encourage first-class mailers to include business reply envelopes in bill and statement mailings by charging mailers the 1-ounce price for a 1.2-ounce piece if a reply envelope is included. Many bill and statement mailers have already pulled reply envelopes out of their mailings because of the cost, said Don Dew, ADF solutions manager at InfoPrint Solutions. He sees the Reply Rides Free program as a move by the Postal Service to try to “mitigate that loss of postal volume.” However, Dew isn’t sure the program will be successful for several reasons. First of all, while the adoption of e-delivery for bills and statements is still somewhat low, many of InfoPrint’s clients report that consumers are receiving bills in the mail and going online to pay. Simply bringing a business reply envelope back into the equation may not be enough to change this behavior. In addition, in order to quality for the incentive, the mail must be sent under the full-service Intelligent Mail program, “which limits it to the biggest mailers,” said Dew. Finally, mailers will still have to pay upfront for the full weight of each piece and then will receive the incentive as a credit. “I think a lot of mailers are going to wonder how many people are really going to reply differently,” just because there’s a business reply envelope, said Dew. If the answer is not that many, then any extra costs from materials and inserter set up may not be worth it, he continued. Arandell and InfoPrint are both involved with the recently formed Affordable Mail Alliance, which is opposing the proposed changes from the Postal Service. The USPS is asking for an increase above the rate of inflation, something that is allowed under the Postal Accountability and Enhancement Act of 2006 if the Postal Service can demonstrate “exceptional or extraordinary circumstances.” The Affordable Mail Alliance believes what the Postal Service is trying to do is illegal, said Landis. An exigent rate case “is for an emergency like anthrax or a Hurricane Katrina,” he stated. “It’s not supposed to be based on the economy, which goes up and down.” In addition, the organization feels the Postal Service hasn’t done everything possible to cut costs, such as bringing down labor costs more and consolidating more facilities. “Increasing rates has to be the very last thing that they do,” said Landis.