What is a Postal Code, and how is it different from a ZIP Code?

Postal Codes vs Zip Codes: Explained

6 minute read

Postal codes and zip codes are essential elements found at the end of addresses, often serving as the unsung heroes of mail delivery. These critical codes assist mail carriers in pinpointing geographic locations, determining delivery points, and establishing mailing routes.

However, one may wonder about the distinctions between zip codes and postal codes, and what exactly each of them entails. In this article, we’ll delve into the specifics of these codes, shedding light on their differences and helping you understand their importance.

What is a postal code?

A postal code is a series of letters, digits, or both, assigned to a specific geographic area to facilitate mail sorting and delivery. Postal codes are widely used across the globe, with their first introduction dating back to as early as 1932 in war-time Ukraine.

While some countries, like the United States, have a predominantly numeric system, others such as the United Kingdom and Canada utilize an alphanumeric format. Though the format of postal codes varies from country to country, their primary purpose remains consistent: to streamline the mail delivery process by identifying precise locations and sorting mail efficiently.

What is a zip code?

A zip code, introduced in the United States in 1963, is a specialized postal code system designed to streamline mail delivery and improve its efficiency. The term “ZIP” stands for “Zone Improvement Plan,” which highlights the primary goal of implementing this system: to enhance mail sorting and routing across the country.

The Philippines also refer to their postal codes as zip codes, though the format used is different from that of the United States. We will be breaking down the format of the zip codes used by the United States in this article.

The zip code is comprised of five digits, with each digit representing a specific piece of information about the destination:

  • The first digit corresponds to a group of U.S. states, known as the National Area.
  • The second and third digits signify a Sectional Center Facility (SCF) – a mail processing and distribution center.
  • The fourth and fifth digits represent a more localized area, such as a city or a neighborhood, known as the Delivery Area.

Some ZIP Code History

The original ZIP code contained five digits. The first three digits designated a regional USPS sorting facility, and the last two digits identified the USPS Post Office or delivery unit. Each five-digit ZIP code corresponds to a USPS delivery location. You may have noticed that a five-digit ZIP code is usually displayed on the physical buildings of your local postal facilities.

In the continental US, the lower ZIP codes are in the east, with larger numbers designating western states.

Implementation of the original ZIP code improved the USPS’ ability to sort and deliver the mail on time. Before 1963, employees sorted the mail based on their knowledge of addresses that appeared on the mail. As mail volumes grew, it became increasingly difficult to continue handling the mail without adding some automation, and that’s what the ZIP code provided.

The original ZIP code served its purpose until 1983, when the USPS added four more digits. The ZIP+4 codes identify city blocks, an office building, or the side of a street. Individual residents were never required to memorize or use the new four digits for their consumer mail. The USPS was more concerned with finer sortation on the large volumes generated by commercial mailers.


By the time the Postal Service introduced ZIP+4, businesses had moved much of their customer information to computers. Veteran computer professionals may recall the new added digits forced some companies to change their mainframe computer programs to make room for the extra four bytes of information. They had designed their fixed-length data records to accommodate only the five-digit code, with no room for expansion!

After the USPS introduced ZIP+4, they began offering postage discounts to mailers who encoded the nine-digit code into the Postnet barcode they printed on the mailpieces. The Postnet barcode allowed the USPS to sort mail by machine. This innovation replaced large rooms of USPS employees who read the ZIP codes printed on mail and entered them into workstations that then controlled mail routing.

11-Digit ZIP Codes

Most of us never see the last two digits of an eleven-digit ZIP code. This information is included in the barcode but not printed as part of the visible address block. The data is meant for machine processing and has little value for humans.

With the 11-Digit ZIP code, the Postnet barcode has been replaced with the Intelligent Mail barcode (IMb). The IMb now includes all the ZIP code data plus other information used to recognize and track individual mailpieces as they progress through the postal delivery network. The last two digits of our current ZIP code single out individual delivery locations. For residential houses, for instance, the ZIP+4+2 code includes the last two digits of the house number. Machines can now sort mail into delivery sequence, relieving postal carriers from much of the manual work of putting the mail in the right order before beginning their daily routes.

Zip codes vs postal codes: what is the difference?

Both zip codes and postal codes serve a similar purpose in facilitating mail delivery.

Zip codes are a type of postal code primarily used in the United States, whereas postal codes of various other types are used globally.

The format of zip codes, typically a five-digit numeric sequence, can differ significantly from the varying formats of postal codes, which may include alphanumeric combinations depending on the country.

The Importance of Postal Codes

It’s easy to take postal codes like ZIP codes for granted. Today we’re used to seeing them on every piece of mail we produce. Most people have a general idea about what ZIP codes do, even if they are unaware of what goes on behind the scenes at the US Postal Service.

Postal codes were the item that allowed the US Postal Service to modernize their operation and led to the development of the postal barcodes. The IMb now powers all the Postal Service’s most advanced features, including sortation, delivery, ancillary services, Informed Delivery, Informed Visibility, Address Correction Service, postal promotions, and more. Without the original ZIP code and all the enhancements that followed, commercial mailers and the Postal Service could not offer the level of service and the data today’s mailers demand.

What began as purely a method to expedite mail sortation and delivery has now become a de facto geographic location method, though not a very accurate one. Governments and businesses use ZIP codes in all kinds of applications to approximate the physical locations of people or buildings. Identifying the nearest bank branch or government office serving a general geographical area, for example.

Obviously, an accurate postal code is important for mailers and non-mailers. Software and official data sources can apply ZIP codes to addresses or verify the codes on file are correct. This requires the other elements of a postal address to be correct and complete. That is where software like Firstlogic’s Address IQ comes into play. Address IQ and the rest of the software that comprise the Firstlogic Data Quality IQ Suite allow companies to standardize and correct postal addresses and to assign accurate ZIP codes and postal barcodes.