[Code of Federal Regulations]
[Title 39, Volume 1]
[Revised as of July 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 39CFR551.8]

[Page 196-197]
 
                        TITLE 39--POSTAL SERVICE
 
                 CHAPTER I--UNITED STATES POSTAL SERVICE
 
PART 551--SEMIPOSTAL STAMP PROGRAM--Table of Contents
 
Sec. 551.8  Cost offset policy.

    (a) Postal Service policy is to recover from the differential 
revenue for each semipostal stamp those costs that are determined to be 
attributable to the semipostal stamp and that would not normally be 
incurred for commemorative stamps having similar sales; physical 
characteristics; and marketing, promotional, and public relations 
activities (hereinafter ``comparable stamps'').

[[Page 197]]

    (b) Overall responsibility for tracking costs associated with 
semipostal stamps will rest with the Office of Accounting, Finance, 
Controller. Individual organizational units incurring costs will provide 
supporting documentation to the Office of Accounting, Finance, 
Controller.
    (c) For each semipostal stamp, the Office of Stamp Services, in 
coordination with the Office of Accounting, Finance, Controller, shall, 
based on judgment and available information, identify the comparable 
commemorative stamp(s) and create a profile of the typical cost 
characteristics of the comparable stamp(s) (i.e., manufacturing process, 
gum type), thereby establishing a baseline for cost comparison purposes. 
The determination of comparable commemorative stamps may change during 
or after the sales period, if the projections of stamp sales differ from 
actual experience.
    (d) Except as specified, all costs associated with semipostal stamps 
will be tracked by the Office of Accounting, Finance, Controller. Costs 
that will not be tracked include:
    (1) Costs that the Postal Service determines to be inconsequentially 
small, which include those cost items not exceeding $3,000 per invoice;
    (2) Costs for which the cost of tracking would be burdensome (e.g., 
costs for which the cost of tracking exceeds the cost to be tracked);
    (3) Costs attributable to mail to which semipostal stamps are 
affixed (which are attributable to the appropriate class and/or subclass 
of mail); and
    (4) Administrative and support costs that the Postal Service would 
have incurred whether or not the Semipostal Stamp Program had been 
established.
    (e) Cost items recoverable from the differential revenue may 
include, but are not limited to, the following:
    (1) Packaging costs in excess of the cost to package comparable 
stamps;
    (2) Printing costs of flyers and special receipts;
    (3) Costs of changes to equipment;
    (4) Costs of developing and executing marketing and promotional 
plans in excess of the cost for comparable stamps; and
    (5) Other costs specific to the semipostal stamp that would not 
normally have been incurred for comparable stamps.
    (f) The Semipostal Stamp Program incorporates the following 
provisions that are intended to maximize differential revenues available 
to the selected causes. These include, but are not limited to, the 
following:
    (1) Avoiding, to the extent practicable, promotional costs that 
exceed those of comparable stamps;
    (2) Establishing restrictions on the number of concurrently issued 
semipostal stamps; and
    (3) Making financial and retail system changes in conjunction with 
regularly scheduled revisions.
    (g) Other costs attributable to semipostals but which would normally 
be incurred for comparable stamps would be recovered through the postage 
component of the semipostal stamp price. These include, but are not 
limited to, the following:
    (1) Costs of stamp design (including market research);
    (2) Costs of stamp production and printing;
    (3) Costs of stamp shipping and distribution;
    (4) Estimated training costs for field staff, except for special 
training associated with semipostal stamps;
    (5) Costs of stamp sales (including employee salaries and benefits);
    (6) Costs associated with the withdrawal of the stamp issue from 
sale;
    (7) Costs associated with the destruction of unsold stamps; and
    (8) Costs associated with the incorporation of semipostal stamp 
images into advertising for the Postal Service as an entity.

[66 FR 31826, June 12, 2001, as amended at 67 FR 5216, Feb. 5, 2002]

[[Page 198]]