The Effect of Returned Mail at Credit Unions

Credit union returned mail with xdi and cu 2.0

2.5% of all First-Class Mail® is returned. That may not seem like a significant amount. I assure you that it is. In the volume that credit unions send statements, notices, forms, and other documents, thousands of envelopes may be returned each month.

Even with bulk postage discounts, that’s a money pit. And members may miss critical communications. Perhaps most importantly, someone—or some people—at your credit union must process that returned mail. That’s no small feat!

Here’s a deeper look into the problem. (And a special thanks to Xpress Data, Inc. for their insight!)


Resources Dedicated to Returned Mail

Let’s say a credit union has 10,000 members. At a 2.5% return rate by mail, the CU would get 250 returned envelopes each time they sent out a monthly statement. At 50,000 members, that’s 1,250 returned mailpieces.

Naturally, many of your members have opted into eStatements and notices. That reduces the amount of returned mail, right?

Right, except for one little caveat: Your CU is sending out more than just statements. It’s also sending notices, tax forms, and other documents as well. So, although eNotices and other digital communications offset the cost, credit unions still deal with a lot of paper mail.

The overall cost is much more than just postage, too. Processing returned mail is a tedious, manual task. Someone must collect envelopes, organize them, and read every label. Then, the label information must be put into the core software. After that, the person has to match the address correction with the appropriate member number, which means opening the mail…

Of course, many credit unions speed up this process by calling on several people to handle it. In either case, that’s a lot of employee time devoted to sorting through mail and updating addresses.


How to Streamline the Returned Mail Process

The best way to ensure that you never get any returned mail is through eStatement conversion campaigns. It virtually eliminates the chances of undeliverable mail, and it’s also faster and more reliable.

But there are other ways of reducing returned mail, too. For example, the USPS recently debuted their Address Change Service (ACS). The ACS skips physical stickers and mailpieces altogether. Instead, they deliver address correction information digitally. Yes, even the USPS is undergoing massive digital transformation!

What ACS guarantees is less physical mail to deal with. Literally. If you ask, they will destroy the undeliverable mail for you.

However, you’ll still need a system to match member IDs with addresses. This is (we are assured) possible to automate. However, how to automate that process is not something we can outline here. It will depend entirely on the technology and resources you have available to you. (For example, XDI developed their Enhanced Address Change Service (EnACS) for this purpose. If you’re curious about what that entails—or how they set it up—they’d be happy to discuss!)


Additional Resources

We recommend reading XDI’s article about this in their publication, the XDI Insider. They’ve helped credit unions with this issue for 25 years, so their insight may prove valuable!

How does your credit union handle its returned mail? We’d love to hear from you. Join our Facebook Group, Credit Union 2.0 Strategists. It’s a friendly group of credit union professionals who share stories and trade advice. It is not a sales or marketing group!

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