This Customer Support Ruling discusses alternative methods used to substantiate the payment for subscriptions by membership organizations.
Domestic Mail Manual (DMM) 18.104.22.168 provides that general publications must have a legitimate list of subscribers who have paid or promised to pay, at a price above nominal, for copies to be received during a stated time. Publications primarily designed for free circulation and/or circulation at nominal prices may not qualify for the general publications category. Publications are considered primarily designed for free circulation and/or circulation at nominal prices when more than 50% of all copies circulated are provided free of charge to the ultimate recipients, or are paid for at nominal prices by the ultimate recipients, or when other evidence indicates that the intent of the publisher is to circulate the publication free and/or at nominal prices. The distribution of all copies of a publication is considered, whether circulated in the mails or otherwise.
A publisher of a general Periodicals publication, or one seeking mailing privileges for a general publication, must maintain records adequate to establish that the publication complies with the above circulation standards. A list of subscribers does not, in itself, constitute adequate evidence that the publication is being distributed under the circulation standards prescribed for Periodicals general publications.
Although it is desirable that subscribers pay directly for their subscriptions separately from other payments, arrangements may be made for them to pay in connection with the payment of dues or contributions, provided the dues or contributions and the subscription's price are so separated as to permit an exact ascertainment of all the facts, including the amount paid for the subscription. To determine whether a subscription is genuine, it must be so separated from all other business transactions as to constitute a distinct, voluntary act.
Publishers of general publications must be able to show that subscriptions have been voluntarily made, that the subscription price has been paid or definitely promised, and that the subscribers clearly understand and fully agree to the subscription arrangements, as follows:
When subscribers pay for their subscriptions as part of their dues or contribution to an organization, the application and dues transmittal forms used by the organization should include an appropriate clause that reads substantially as follows:
(Statement to be printed on membership application form) "I, [member name], hereby apply for membership in [organization name] and enclose $[amount] as my annual membership dues (contribution) for the year [20xx]. $[amount] of my dues (contribution) is for a one-year subscription to [publication title]."
(Statement to be printed on a membership dues (contribution) notice) "Annual dues (contribution) for membership in [organization name] for the year [20xx] are $[amount]. $[amount] of this amount is for a one-year subscription to [publication title]. Return this portion with your remittance."
When a membership organization that collects dues or contributions chooses to solicit and collect subscription monies in this manner, actual records of the yearly dues payments or contributions by members must also be maintained and available for review.
When copies of the publication of a rural electric cooperative association that is operating under the Rural Electrification Act of 1936 are sent to the individual members, it is suggested that the association amend its bylaws, and the contract signed by individual members, to read substantially as follows:
(Amendment to bylaws) "Payment of $[amount] for a one-year subscription to [publication title] shall be paid annually by each member from the patronage dividend accruing to the member."
(Statement to be printed on contract signed by members) "$[amount] of the patronage dividend accruing to me each year is for a one-year subscription to [publication title]."
When a rural electric cooperative association chooses to solicit and collect subscription monies in this manner, actual records of the yearly distribution of patronage dividends must also be maintained and available for review.
If publishers are unable to use the appropriate alternative methods described in this Customer Support Ruling, they must adopt a method of bookkeeping available for postal inspection, which clearly shows that payment or promises to pay have been made by the persons the publishers claim as subscribers to their publications. DMM 22.214.171.124 lists examples of the types of records that publishers should maintain, including print orders, individual and bulk orders for subscriptions, sales records and returns for over the counter sales, stubs or copies of receipts issued, newsstand sales and returns, cash books, bank deposit receipts or similar records, and records of copies of the publication destroyed.