Effective Business Applications for the Zip Code Database

Effective Business Applications for the Zip Code Database

Zip codes are now a ubiquitous part of every address in the United States, so it may be surprising to many people to learn that they have only been used since 1963. Prior to that time, certain large metropolitan areas had postal zones, but as the country and infrastructure grew, this simple system proved inadequate, and the US Postal Service created what we know today as the zip code database. In the 1980’s an additional four digit suffix was added to the five digit zips to further aid in mail sorting.

While the Postal Service creates, maintains, and updates postal codes, most people are only familiar with a handful of zip codes they use regularly. For businesses that use mail every day and ship to thousands of people, a company database is necessary. A company database ideally mirrors the master listing of codes maintained by the Postal Service, but because these codes change and new ones are added, keeping a company postal database up to date with the Postal Service can be difficult. Information is always published by the Postal Service when a change is going to take place, however monitoring all the changes to postal data and geographical boundaries can be quite difficult, especially for small and medium sized businesses.

For these smaller enterprises the highest quality and most cost effective option for maintaining an accurate and up to date zip code database is to purchase it from a third party company that works closely with the Postal Service to ensure that the information is always correct. With such a large body of data that is constantly changing somewhere, this is extremely important. High quality zip code database products will always include free updating after purchase.

While basic postal and zip + 4 listings are useful, there are actually some other pieces of information associated with zip code databases that can be extremely useful as well. The better zip code database providers will usually also offer access to this additional information. Additional information includes area code, city name and type, state abbreviation, and even longitude and latitude coordinates.

Companies conducting billing and shipping procedures nationwide often run into issues involved with calculating sales tax in the locations where their customers are ordering from. Postal codes are the first and most basic method of knowing what tax rates to use when calculating sales tax, but this information is limited, because tax rates vary by city and county, and about 25% of postal codes in the United States cross county lines. This makes it extremely important for companies to be able to identify which county an address is in, regardless of the postal data. This is typically a service that is offered in addition to the basic level product.

Finally, some businesses find that they need to associate SIC and NAICS codes with addresses in certain ZIP+4. There are only a few zip code database providers that offer this valuable service as well, and fewer that do so for a reasonable price.