4. SUBSCRIPTION BASED PRICING
A significant new development in the way Postal Service prices are set occurred in the fall of 2002 when subscription-based pricing for Confirm went into effect. Confirm allows customers to track letters and flats as they move through the mail processing system. Data generated from PLANET barcodes on mailpieces is made available to individual subscribers so they can find out where their mail is in the delivery process.

Traditionally, the Postal Service has set prices by first determining its costs and then applying a markup. For Confirm, the pricing structure was based on mailer needs and the value of the service. Research was conducted at various price levels to determine price sensitivity, which led to the proposed prices that were submitted to the Postal Rate Commission.