ZIP Codes, those handy little five digits (okay, sometimes nine… ZIP+4) are something we use regularly, yet probably don’t think much about. They’ve existed since the beginning of time, right? Or at least since the inception of the Postal Service (USPS), right? Wrong! In fact, they have only been in existence for about 50 years. Since then, their use has reached far beyond the intention of their initial purpose, which was simply to improve the efficiency of mail delivery, but more on that in a bit.

The Zone Improvement Plan – ZIP Code system – has roots that reach back to WWII. In 1943, the Postal Service implemented postal zones for large cities as a way of making mail sorting easier for the new and inexperienced postal clerks who were filling in for those who had gone into military service. Cities were assigned a two-digit code. For example:

• Rochester, NY – 11
• Minneapolis, MN – 16
• Boston, MA – 24
• Los Angeles, CA – 54

This system remained in place until July 1, 1963, when the current ZIP Code system was implemented. The country is divided into ten geographical regions (groups of states), and the first digit of the codes designate the area: zero in the Northeast all the way to nine in the West. The second and third digits, combined with the first, identify a sectional center facility (SCF), which is a postal facility that serves as a processing and distribution center for an area. In most cases there is one SCF for every unique 3-digit ZIP Code range, although some SCFs cover several. The fourth and fifth numbers identify a much more specific area whether a district, city, town, village or a smaller area within these. There are currently over 42,000 ZIP Codes in use today.

Within a 3-digit ZIP Code region, the main town or city is typically assigned the first, or lowest, ZIP Codes in the region, with subsequent towns being assigned ZIP Codes in alphabetical order; which would explain why ZIP Code numbers often are not numerically adjacent to one another. ZIP Codes were introduced to streamline mail delivery only, and there are some exceptions to ZIP Code assignments based on the confines of geographical features and mail delivery routes. Therefore, ZIP Codes cannot be used to pinpoint exact locations, such as can be done with the lat/long system used in mapping and GIS technology.  One such anomaly, for example, is 00501 which is assigned to the IRS center in Holtsville, NY; most other NY ZIP Codes begin with 1.

There are four types of ZIP Codes: Unique; P.O. Box; Military; and Standard. Unique ZIP Codes are assigned to a high volume address including government agencies, universities and even some businesses such as 12345 for General Electric in Schenectady, NY (note: thousands of children send letters to this ZIP Code each year that are addressed to Santa Claus, because it’s the most logical ZIP Code for the North Pole, of course!). P.O. Boxes, which are located at post offices around the country are assigned a ZIP Code that is only used for those P.O. Boxes. Military ZIP Codes are assigned to a US Military Institution APO/FPO/DPO. The remainder of ZIP Codes are Standard, which are the most common and assigned to home and business addresses in the areas surrounding SCFs and other Post Office facilities.

During the 1960s and 70s, the USPS heavily promoted the usage of the new ZIP Codes, and even utilized a cartoon character mascot, Mr. ZIP, to encourage the adoption of the system by everyone. Ironically, the only time the USPS ever issued a stamp promoting the use of ZIP Codes, they didn’t utilize Mr. ZIP, though he was often depicted on the covers of stamp booklets, and in the selvage portion of stamp panes. Use of ZIP Codes was not required at first, however, beginning in 1967, mailers were required to pre-sort second and third-class bulk mail by ZIP Code.

Today ZIP Codes are required on:

• Express Mail
• Commercial First-Class Mail
• First-Class Package Service
• Periodicals
• Standard Mail
• Package Services and Parcel Select
• U.S. Military Addresses
• APO and FPO Addresses
• Official Mail
• Business Reply Mail
• Merchandise Return Service Mail

The only mail not required to have ZIP Codes is single-piece First-Class mail, Priority Mail, single-piece Parcel Post, and pieces with a simplified address (i.e. addressed to “Postal Customer” or other generic recipient) that do not fall in a category listed above.

In 1983, the system was expanded one more time with the introduction of the ZIP + 4 codes, which use the basic five-digit codes, plus four more digits to further segment geographic areas such as city blocks, apartment complexes, and in some cases individuals, such as a particular business, that receive high-volumes of mail, but do not have their own Unique ZIP Code. The ZIP + 4 is not mandatory except for certain presorted mailings. In a further effort to provide even more specific delivery point information, the USPS, through the use of sophisticated optical readers, applies an 11 digit Postnet barcode to most mail pieces, greatly increasing the speed and accuracy of mail delivery.

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ZIP Codes have become more than a string of numbers placed on an envelope to speed up delivery.  Though it was unintended, the use of ZIP Codes in sales and marketing applications, internet technology, data collection and analysis, GIS and more is far reaching.  Delivery companies such as FedEx, UPS and others require USPS ZIP Codes for routing their deliveries, rather than developing their own segmentation systems. ZIP Codes are also used in online applications such as locator software, which returns business and store location results and distances calculated from the lat/long center-points of ZIP Codes.

However, the most prolific use of ZIP Codes outside of delivery and location sourcing is marketing and data applications. The U.S. Census Bureau and many other statistical collection agencies use ZIP Codes as a way of tracking and amalgamating data. Direct mail campaigns use ZIP Codes to target potential customers (“birds of a feather flock together”). Retail stores regularly collect ZIP Codes as a way of determining the location of their customer base, and will often use this data when selecting new sites. When used in combination with credit card numbers, even more data can be collected by businesses. While many of us hesitate to share our ZIP Code at point-of-sale transactions, doing so enriches the data we use in our businesses to better serve our customers and to develop sound business strategies. So don’t be selfish – share that ZIP!