Customer Support Ruling

Nominal Rate Subscriptions - Periodicals
February 2009

PS-132 (707.6)

This Customer Support Ruling discusses nominal rate subscriptions for publications in the Periodicals general publications category.

Domestic Mail Manual (DMM) 707.6.1.2 states, in part, that general publications must have a legitimate list of subscribers who have paid or promised to pay at a rate above a nominal rate for copies to be received during a stated time. Publications primarily designed for free circulation and/or circulation at nominal rates may not qualify for the general publications category.

Nominal rate subscriptions include:

• Subscriptions sold at a price so low that it cannot be considered a material consideration.

• Subscriptions sold at a reduction to the subscriber, under a premium offer or any other arrangement, of more than 70% of the amount charged as the basic annual rate. The “basic annual rate” is the amount that entitles the subscriber to receive one copy of each issue published during the subscription period.

The value of a premium is considered to be its actual cost to the publisher, the recognized retail value, or the represented value, whichever is highest.

In view of the provisions of DMM 707.6.1.2, if less than thirty percent of the basic annual subscription price is charged for a subscription, that subscription will be considered to have been paid at a nominal rate. For example, if the basic annual subscription price is $20.00, a subscription being sold for $5.99 would be a nominal rate subscription.

Also, after deducting the value of any premium(s) offered with a subscription, if the net price is less than thirty percent of the basic annual subscription price, that subscription will be considered to have been paid at a nominal rate. For example, if the basic annual subscription price is $20.00 and a book the publisher represents as “a $15.00 value” is being offered as a premium with the subscription, the net price ($5.00) would constitute a nominal rate subscription because $5.00 is less than thirty percent of the basic annual rate.

As a footnote, it is permissible, on the other hand, to sell subscriptions at more than the basic annual subscription price. For example, a common practice of membership organizations that receive member subscriptions at the basic annual rate is to sell non-member subscriptions above the basic rate.

(Signed)
Sharon Daniel
Manager