United States: Please Don’t, Mister Postman: How To Respond When The Postal Service Claims That You Underpaid Postage

Last Updated: December 29 2014
Article by David M. Levy, Matthew Field and Ian D. Volner

You're sitting in the offices of your on-line business, going through your in-box. Your mail includes a letter from the U.S. Postal Service. The letter claims that you owe a six- or seven-figure sum—more than your profits last year—because you didn't pay enough postage on parcels of merchandise that you mailed to consumers one, two or three years ago. You have 30 days to appeal—to another Postal Service official—or pay up. "We appreciate your business," the letter ends.

You sit there in disbelief. Your company has a dedicated in-house shipping department. You've faithfully paid the postage on your outgoing parcels with a postage meter for several years—maybe even with a computerized meter and data link that enable the Postal Service to debit your postage instantly from your bank account whenever you mail. None of the post office employees who deal with your shipping department have ever raised any underpayment issue before. How are you going to reconstruct what you mailed several years ago? And, if you owe more postage, how will you ever be able to get your customers to reimburse you? This seems Kafkaesque.

How should you respond?

Businesses that mail merchandise to consumers need to know how to deal with Postal Service underpayment claims. The Postal Service considers nonpayment or underpayment of postage on business mailings to be turnstile jumping—trivial in isolation, but a serious financial threat if enough customers do it. Business mailings of parcels are a special concern. Unlike bulk advertising mailing, a mailing of parcels typically includes a mix of pieces of varying weight, shape and contents—and varying rates of postage. In addition, commercial senders of parcels typically use postage meters strips or labels, not preprinted bulk mailing permit markings, to show the payment of postage. For this kind of mailing, the Postal Service normally verifies only a tiny fraction of the pieces before accepting them for processing.

In the past few years, the Postal Service's internal Office of Inspector General has concluded that this process lacks adequate controls against short-payment or non-payment of postage on meter mailings. The Postal Service has responded by stepping up its enforcement efforts. When the Postal Service receives evidence that a business mailer may be underpaying postage, the Postal Inspection Service—the Postal Service's in-house law enforcement force—investigates. The inspectors visit the mail processing site (or sites) where the mailer enters its outbound parcels, and pull one or more samples of the mailers' parcels for inspection. The inspectors weigh, measure, photograph, and test each sampled parcel to verify how much postage should have been paid. Then the inspectors compare the total postage owed on the sampled pieces with the total actually paid. If the former is larger than the latter, the resulting ratio is multiplied by the total amount of postage actually paid by the mailer on its entire universe of mailings during the past year or so. The inspectors submit an investigative report to the district office where the parcels were entered, and the district office sends the mailer a decision demanding additional payment.

At least that's how the process is supposed to work. In practice, investigations and reports can be sloppy, and unjustified underpayment claims can result. Here are some examples we've seen in actual recent cases:

  • The Postal Service fails to produce the investigative report and workpapers of the Postal Inspection Service. Without this supporting information, verifying the validity of an underpayment claim can be impossible.
  • The Postal Inspection Service workpapers are incomplete or nonexistent.
  • The file lacks photographs, videos or other documentary evidence needed to document the test results. This is especially important, for example, when the Postal Service claims that required information or markings were missing from the face of the mailpiece, or the piece was too big, small, rigid, flexible or uneven in thickness to qualify for the rates claimed.
  • The Postal Service fails to credit the mailer for all of the postage that it paid for the mailings.
  • The Postal Service fails to show how the pieces were sampled, or demonstrate that the sample was representative of the universe of mailings. (This is especially important when a mailer uses multiple mailpiece shapes or multiple classes or products of mail.)
  • The Postal Service uses a sample of pieces mailed during a brief period to claim underpayment during a much longer period.

How to respond to a Postal Service underpayment decision depends on the specific facts and circumstances of each case. But here are some useful starting points:

Request a copy of the complete investigative report, and all of the underlying workpapers and documentary evidence. You should ask that any spreadsheets be produced in electronic form. You should also ask that the deadline for filing an administrative appeal (normally 30 days) be extended until 30 days after you have received the requested material. These requests should be in writing.

If the Postal Inspection Service prepared an investigative report, the Postal Service usually will produce it. If not—or if the Postal Service promises the material but then goes silent—the investigative report probably didn't exist, and whatever you eventually receive will have been created after the fact.

If the Postal Service acknowledges having an investigative report but refuses to produce it, consider filing a request under the Freedom of Information Act.

The Postal Service usually suspends the deadline for filing an administrative appeal until the requested material has been produced. If the Postal Service declines to do that, or fails to respond before your appeal is due, you should file a protective appeal. Apart from any defenses you have against the substance of the claim, you should argue that assessing a monetary claim against a mailer without disclosing all of the underlying evidence and analysis is a denial of due process.

If you receive the documentation, you should carefully study all of the steps of the Postal Service's analysis, including the bullet points listed above, and make the most effective case you can. Unlike trials and appeals in court, your initial written appeal will be your main opportunity to make your case with the Postal Service.

Finally, unless the amount of the underpayment claim is trivial, you should notify your company's law department promptly. Don't assume that you can resolve the dispute informally because you're a valued customer of the Postal Service. You may have a warm and friendly relationship with your local postmaster, or have been singled out for praise or recognition by your sales, marketing or customer relations contacts at the Postal Service. You may have even received a plaque for being an outstanding postal "partner." None of this will count with the Postal Service's revenue protection branch if you don't submit a strong case on appeal.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.