This Customer Support Ruling discusses nominal price subscriptions for publications in the Periodicals general publication category.
Domestic Mail Manual (DMM) 220.127.116.11 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 price 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.
Nominal price 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 price. The "basic annual price" is the amount that entitles the subscriber to receive one copy of each issue published during the subscription period.
Except for coupons, 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.
For example, if a publication had a basic annual subscription price of $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 of the subscription would be $5.00. In this example because the subscription is now sold at a reduction of more than 70% of the amount charged as the basic annual price it would constitute a nominal price subscription and be considered a nonsubscriber copy.
When a coupon is used as premium offer, the value that the Postal Service recognizes is five percent of the coupon amount. For example, if the coupon is valued at $100.00, the value that Postal Service will recognize of the coupon for the premium offer is $5.00.
As a footnote, it is permissible, to sell subscriptions at more than the basic annual subscription price. For example, a common practice of a membership organization that receives member subscriptions at the basic annual price is to sell non-member subscriptions above the basic price.
Lizbeth J. Dobbins
Headquarters, US Postal Service
Washington, DC 20260-5015