FRIDAY SEPTEMBER 16, 2005

TOPIC: CREDIT AUTHORIZATION

BACKGROUND
Canada Post is progressively implementing procedures with the objective of facilitating induction and ensuring prompt payment when customers present mail at facilities accepting commercial mail. This week NAMMU members began advising receipt of a letter concerning an automatic credit authorization that will take place as of September 19th, when orders are created through the Electronic Shipping Tools (EST). The notification, dated September 9th, stressed that credit authorization will be applied against the payer’s account and not the shipper’s account, in the case of a Value Add Mailer (VAM). Customer accounts that do not meet Canada Post’s credit limits and other requirements, will now have limited methods of payment upon creation of an electronic Order. Credit authorization will continue to be performed at induction facilities on all manual Orders.

If the method of payment “Account” is not available when creating an electronic Order, an alternate method of payment must be selected i.e. certified or business cheque, and in some cases, full payment on deposit. Both VAM and mailers are impacted by this initiative, and many think negatively. Click here to view sample letter as well as an insert some mailers received in their August statements.

NEW
Following member complaints and a quick, proactive survey to assess impact, NAMMU requested Canada Post delay implementation until an industry meeting could be held to
discuss and modify the initiative. Click here to view request.

All mailers and VAM consulted maintained the initiative makes no practical sense as it stands. Most mailers strive to keep their accounts with Canada Post up-to-date and reconciled – they need to do this for their own business reasons. Many of these mailers have ongoing issues with these reconciliations and while, in fact, owed money by Canada Post, the opposite might appear true until the matters are settled. Accounting cycles of some mailers do not “fit” Canada Post’s terms of payment. For a VAM bringing in mail on behalf of a client, refusal of the "Account” method of payment, is tantamount to announcing poor credit status of that client, whether the client is actually in arrears or not. In the case of VAM, use of a current postage “spend” amount as a credit limit, would not reflect the potential for significant volume growth, a benefit for both Canada Post and its clients.

NEXT
A meeting of NAMMU members will be held just prior to the Annual General Meeting on September 23rd at the Toronto venue in order to review options and look at modification proposals. You are encouraged to attend this session as well as the AGM to follow, however, you must register for this meeting separately. Please FAX 416-977-4513 or email executive@nammu.org and you will receive registration details.