A three-year “Negotiated Service Agreement” between the U.S. Postal Service and Capital One was approved yesterday by the Postal Rate Commission. Under terms of the proposed deal, Capital One will receive volume discounts between 3 cents and 6 cents per piece, depending on mail volume. The deal caps the discount at $40.6 million for the three year term. The proposed agreement also requires Capital One to receive address corrections electronically instead of having undeliverable mail returned. The deal, if approved, is unprecedented and will likely produce a number of similar deals for major direct mail users such as MBNA, Bank One, and Citibank. The Capital One agreement still needs the approval of USPS Board of Governors which meets in early June. Reportedly, Capital One is the largest producer of First-Class mail and the USPS’ fourth-biggest customer. Capital One mails out more than 1.2 billion pieces of mail annually, and currently pays 29 cents for First-Class mail. Industry wide, nearly five billion credit card solicitations were mailed in the USA last year, according to CardWatch ([www.cardwatch.com]).