‘Junk Mail’ Firms Fear Postage Hike Will Ruin Business : Marketing: Catalogue retailers and others in the industry say the increase may force some into bankruptcy.

The people behind “junk mail” feel like sending a nasty letter to the U.S. Postal Service.

Direct marketing firms, which includes catalogue houses and sellers of mailing lists, say the proposed postal rate hike--which would raise the price of a first-class stamp to 30 cents from 25--will hurt their industry and drive some into bankruptcy. The firms, which mostly use third-class mail, face increases as high as 30%.

“We are trying to get the rate down,” said Richard Barton, senior vice president of the Direct Marketing Assn., which sponsored a strategy meeting Thursday with its Los Angeles area members to fight the increase. “The biggest overall problem is it’s an average rate increase that is too high. It’s above the rate of inflation.”

While the direct marketers met, U.S. Assistant Postmaster General Frank Heselton spoke to other Los Angeles postal customers and explained his agency was not out to harm third-class mail users.

“It’s a valuable business for us,” said Heselton in an interview before his speech. “It more than covers its costs. We’re certainly not trying to put them out of business.”

Groups ranging from the direct marketers to public utilities to newspapers will try to wrangle changes and decreases in the proposal before the U.S. Postal Commission approves the final rates, expected early next year.

“These postal rate battles are very long and very fierce,” said David Stigler, senior vice president for legal and public affairs at Advo-Systems Inc., which sends out 15 billion pieces of mail annually. “We don’t plan on it being a done deal.”

But the industry’s effort to fight a 1988 postal increase failed. In fact, the U.S. Postal Commission boosted the rate hike for third-class mail above staff proposals, said Heselton. Direct mailers ended up watching rates soar 25% to 33%.

What’s worse, the postal hike in 1988 put the brakes on third-class mail growth, and officials expect it to slow down even further under new rate increases.

“It stopped in its tracks a successfully growing industry,” said Barton. “It hurt some of our businesses.”

“Our customers cut back,” said Stigler. “They mail less often or” reduced the weight of their mailers.

Under the proposed hike to take effect in 1991, the average rate for third-class mail--which includes most advertisements, coupons and catalogues--will rise an average of 17%. The rate will actually drop if mailers take advantage of new discounts given to those who take steps to speed up mail delivery.

But some catalogues, which cannot take advantage of the discounts, face a 30% increase. “There will be some medium-size catalogues that might go out of business,” said Barton.

Catalogue companies also are testing different routes to get their ads and catalogues to consumers. Sharper Image, which specializes in trendy gifts and gadgets that appeal mostly to men, is considering distributing small catalogues through newspapers and already distributes catalogues to airline passengers.

Despite the opposition to the postal hikes, some direct marketing firms stand to benefit from the increase.

Kris O. Friedrich, president of Huntington Beach-based Money Mailer, which mails packets of coupons and ads to 50 million households, said his business increased about 80% as a result of the last postal rate increase. Friedrich said the marketers share the cost of postage by mailing in groups.

“I won’t tell you that we like an increase,” said Friedrich, “but it really is very good for our type of business.”