Is First-Class Mail Still Enough for Unclaimed Property Due Diligence?

For decades, First-Class Mail has been the foundation for unclaimed property due diligence efforts. It’s written into statutes, embedded in compliance workflows, and widely accepted as the standard way holders attempt to reconnect with owners before assets are transferred to the state.

However, the environment that made First-Class Mail so effective has fundamentally changed.

As communication habits evolve and the U.S. Postal Service (USPS) continues to shift its focus toward package delivery, it’s worth asking a simple question: Is First-Class Mail still sufficient to meet the intent of unclaimed property due diligence?

A System Built for Another Time

The requirement for pre-escheat outreach dates back to the early 1960s, when states began formalizing due diligence obligations following the Uniform Disposition of Unclaimed Property Act of 1954. At that time, reliance on the USPS was both logical and practical.

The postal system was ubiquitous, affordable, and reliable. Nearly every individual had a mailing address. Delivery was consistent. Returned mail provided timely feedback. A First-Class letter sent to an owner’s last known address was, quite simply, the best available tool for reaching them.

For many years, it worked well.

However, that system was built for a world where physical mail was the primary form of communication. That is no longer the case. Since then, the world has become increasingly “paperless,” with communication shifting to texts, emails, and digital platforms. At the same time, competition from companies like FedEx and UPS has intensified, and USPS has increasingly adapted its operations to accommodate growing package volume as First-Class Mail declines.

The Purpose of Due Diligence

At its core, unclaimed property law is about one outcome: returning control of assets to their rightful owners.

Due diligence is the first and most critical part of that process. Before property is turned over to the state, holders are expected to:

1. Identify dormant or inactive accounts, and
2. Make a good-faith effort to reengage the owner

In most jurisdictions, that “good-faith effort” is still defined as sending a First-Class letter via the USPS.

Historically, that requirement aligned well with the goal. Mail was dependable, widely understood, and capable of reaching a broad population. It offered a scalable way for holders to meet their obligations while giving owners a reasonable opportunity to respond.

The question now is whether that alignment still holds.

The Reality of Today’s Mail System

Recent USPS performance trends suggest growing limitations.

In fiscal year 2025, approximately 89% of First-Class Mail was delivered on time. While that may seem high, it represents a meaningful downward shift from the reliability levels that originally supported its central role in due diligence.

More importantly, due diligence doesn’t depend solely on outbound delivery. Returned mail, which is critical for identifying invalid addresses, must move back through the same system, effectively doubling the impact of delays.

Add to this the fact that, as the U.S. Postal Service continues implementing operational changes in an effort to shore up its finances and modernize its infrastructure, the agency expects an increase in delays between when you mail something and when it is postmarked, according to a public notice in the Federal Register that took effect December 24, 2025.

Although USPS reforms may improve performance in some areas, timelines remain a concern, and timely notices are exactly what compliance frameworks depend upon.

Timing Matters More Than It Used To

Due diligence requirements are tightly tied to reporting timelines.

Many states require holders to send notices within a 60- to 120-day window before filing their annual reports. Under Revised Uniform Unclaimed Property Act (RUUPA)-based statutes, that window may extend to 180 days, but the principle remains the same: outreach must occur within a defined period that allows owners time to respond.

As mail delivery and return times lengthen, that window becomes more compressed in practice.

A letter sent at the beginning of a 60-day period may not generate a returned-mail response for several weeks. By the time that information is received, there may be little opportunity to take additional action before reporting deadlines.

If this trend continues, it raises an important possibility: current timelines may no longer align with real-world mail performance. When that happens, states will want to respond.

A Shift Toward More Stringent Requirements

In some jurisdictions, that response is already underway.

States such as New Jersey, Ohio, and Illinois have introduced certified mail requirements for certain types of due diligence. Florida has adopted similar requirements for assets valued above $1,000.

These changes are designed to increase the likelihood of delivery and provide stronger proof of outreach, but they also come with trade-offs:

• Higher costs
• Increased operational complexity
• Longer processing times

If First-Class Mail becomes less reliable, it’s reasonable to expect more states to move in this direction or to introduce additional requirements such as repeat mailings or expanded notification windows.

The Owners Who Never Hear From You

Even when First-Class Mail works as intended, it doesn’t reach everyone.

Most states impose minimum value thresholds—often around $50, but sometimes higher—before due diligence is required. That means a significant volume of lower-value property never triggers outreach at all.

For those owners, the process is entirely passive. Property is transferred to the state, processed, and eventually made searchable. Only then can owners take action to reclaim it.

This delay can stretch months or longer, and many assets are never recovered.

From a compliance perspective, thresholds make sense. Yet, from an owner-outreach perspective, they highlight a limitation: the current system is not designed to reach all owners before escheatment, only some.

Moving Beyond a Single Channel

Recognizing these gaps, some states have begun to expand the scope of what qualifies as due diligence.

RUUPA Section 501(b) allows holders to supplement First-Class Mail with email outreach, provided the owner has consented to receive electronic communications. Many states have adopted this dual-channel approach, and a few, like Colorado, allow email to serve as a substitute under certain conditions.

This is a meaningful step forward, but it is also limited.

Email outreach depends on having accurate contact information and documented consent—conditions that may not exist for many dormant accounts. As a result, electronic communication often enhances due diligence rather than replacing traditional mail.

Still, the direction is clear: reliance on a single communication channel is beginning to give way to more flexible approaches.

Rethinking What “Good-Faith Effort” Means

At a broader level, these changes point to a larger shift in thinking.

Due diligence requirements exist to give owners a real opportunity to reclaim their assets before those assets are transferred to the state. If the methods used to provide that opportunity become less effective over time, then the definition of “good-faith effort” may need to evolve.

That evolution does not necessarily mean abandoning First-Class Mail. It still offers advantages, such as legal recognition, broad reach, and a well-established role in compliance processes.

Yet it suggests that relying solely on this method may no longer be sufficient to fully achieve the underlying goal.

What Comes Next

Some industries are already exploring alternative models.

In the retirement space, centralized databases now allow individuals to search for unclaimed benefits across multiple providers. Federal and state initiatives have begun to adopt similar approaches, creating new ways for owners to proactively locate assets.

These efforts represent a shift from one-way outreach to two-way engagement—from trying to reach owners to making it easier for owners to find and regain control over what’s theirs.

More broadly, for unclaimed property, this raises an important possibility: that the future of due diligence may not be defined by a single outreach method but by a combination of overlapping approaches that improve visibility, accessibility, and response rates.

A System in Transition

First-Class Mail is not going away. It remains deeply embedded in statutory frameworks and will continue to play a role in due diligence for the foreseeable future. However, the context in which it operates has changed.

Postal Service delivery performance is less predictable. Communication preferences have shifted. Regulatory expectations are evolving. The limitations of a mail-only approach are becoming more apparent.

Taken together, these factors suggest that unclaimed property due diligence is entering a period of transition. The core objective of reconnecting owners with their assets has not changed, but the tools used to achieve it likely will.

For holders, the question is no longer just how to comply with existing requirements but how to prepare for what comes next.

Note: This article is intended for informational purposes only and does not constitute legal advice. Holders should consult with qualified counsel regarding due diligence requirements applicable in each jurisdiction where they report.