Dormant Advance Deposit Permit Accounts
Background
The U.S. Postal Service maintains advance deposit accounts of customers to pay for business mailings in the PostalOne! system. This system provides an automated, streamlined alternative to the existing, manual business mail acceptance process. These accounts contain deposits for future permit imprint, business reply, periodicals, and postage due mailings.
The Postal Service cancels these accounts when no mailing transactions have occurred and customers do not pay the $220 annual fee for 2 years. Postal Service policy requires management to notify customers that their account will be canceled and instructs them to request a refund for any remaining account balance.
Once canceled, and no request for refund is received from the customer, the account is closed and becomes dormant.
Business mail customers may claim refunds of unused account balances, even after the account becomes dormant. Customers retain visibility to dormant account information until the account is deleted and archived. The Postal Service refunds fees or advanced deposits within 10 business days from the receipt of the customer’s request.
The Postal Service refunded $34.3 million to customers from October 1, 2008, through June 30, 2014. During fiscal years 2012 and 2013, the Postal Service refunded $9.2 million of that amount to customers; $15.6 million of customers’ unclaimed dormant account balances was considered income to the Postal Service during that same timeframe.
Our objective was to determine whether procedures for refunding dormant advance deposit permit accounts to customers were effective and consistent with best practices.
What The OIG Found
The Postal Service’s procedures for refunding dormant advance deposit permit accounts to customers were effective and consistent with best practices to the extent allowed by law. However, opportunities exist to enhance the process for locating customers and archiving account information. These opportunities will increase visibility, provide customers a better opportunity to obtain refunds on their deposits, and ensure continued effectiveness and efficiency in the refund process.
Specifically, prior to cancellation, the Postal Service notifies customers that their account will be closed and instructs them to submit a request for refund for any remaining account balance. The policy does not require further, ongoing attempts to contact customers prior to closure. While state and federal agencies advertise and transfer funds to make them more accessible, the Postal Service is prohibited by law from performing these activities.
What The OIG Recommended
We recommended management conduct periodic attempts to locate customers of inactive and dormant accounts and extend retention of account information within the PostalOne! system.