Gotcha Gang Revels in Shrinking Fund Annuities

Waterloo ON Monday, August 20, 2007

Over the past week, Inspector Hamish McMoney has been following a lead he picked up on the workings of the Gotcha Gang, and with a bit of successful sleuthing, uncovered a gotcha-goldmine! It seems that the gang have been living the high life off of their own version of a sinking fund annuity!

Unlike a conventional sinking fund annuity, which is designed to accumulate to a specific value over a set period of time, the Gotcha Gang openly admitted that their shrinking fund annuities were actually a vehicle to covertly withdraw funds from marketing and communication budgets without raising any suspicion whatsoever.

When asked if there was anything he could do to arrest the gang for living off of their ill-gotten gains, Inspector McMoney noted that the gang members were not actually doing anything, since the shrinking fund annuities were really being initiated by the victims themselves. He went on to say that he was doing all he could to forewarn and forearm these mailers, but that many were continuing to leave themselves vulnerable.

“Consider your corporate newsletter,” the inspector replied when asked if he could be more specific. “How do you mail it? Are you using Addressed Admail, Lettermail or Publications Mail? Do you know the differences? Basically, if you’re not using the most cost-effective product, you’re making a contribution to a Gotcha Gang’s shrinking fund annuity every time you mail!”

To help illustrate his point, the inspector explained that many smaller businesses are caught in the trap of mailing small volume newsletters as Lettermail. “It’s a common misconception,” he says. “Most people think they need a minimum of 1,000 pieces to qualify for Publications Mail. But the fact of the matter is that the minimum quantity for Publications Mail with NDG preparation is just 50 pieces! Beyond that, once volumes approach 1,000 pieces, there is a trade-off to consider between Addressed Admail and Publications Mail.”

Here’s another example. At 50 grams, Lettermail postage in the Short/Long category is $0.93 per piece. Compare that against the $0.38 that one could expect if mailing as LCP Presorted Addressed Admail. On 10,000 pieces the total difference would be $5,500 in extra postage. With four mailings a year, that is a hefty contribution to the shrinking fund.

But don’t think you are safe just because you are using Addressed Admail instead of Lettermail. Consider a corporate newsletter that weighs 200 grams and is being mailed as Admail. The postage would be about $0.83 per piece. However, if mailed as LCP Presorted Publications Mail, postage would be about $0.45. That is a drop of $0.38 per piece, or $3,800 on 10,000 pieces. And where does the extra money go? Straight to the Gotcha Gang.

A word of caution, though: there are some fundamental items to be considered if you want a newsletter to be categorized as Addressed Admail or Publications Mail. However, with proper planning, it is possible to structure your content to meet the requirements for the preferred product, prior to submitting the piece to Canada Post for a ruling. As the examples the inspector provided illustrate, this can have a huge impact as to whether or not you will be contributing to the Gotcha Gang’s shrinking fund annuity, and at what level.

“It’s a big challenge,” Inspector McMoney replied when asked what he planned to do about this newly discovered gotcha-goldmine. “There are many types of shrinking fund annuities out there, and if people aren’t made aware of them, the lost money’s just going to keep accumulating in the gang’s vaults. But we’ve won a few battles and I’m going to be working hard to win even more, by making sure that mailers are properly informed about where they’re losing money.”

For their part, the Gotcha Gang, who have never been embarrassed about living off of the misfortunes of others, showed little regard for Inspector McMoney’s bold statement, and were seen laughing together as they rolled out of town. Sources suggest that they are headed for a little rest and relaxation at the Desperado Spa and Resort, a world-class retreat for well-heeled rogues and villains.

Please note that the Gotcha Gang is not Canada Post. The Gotcha Gang represents the effect of decisions that result in paying excess postage, labour costs or minimizing opportunity. Most of these releases are based on actual events, though dates and locations may be fictitious.