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A letter or parcel without a zip code is highly likely to never reach its intended destination. This is because of how the US Postal Service's automated systems process addresses.

The first number, between 0-9, denotes a geographic area of the U.S. The second two numbers of a zip code specify a specific region within that geographic area and the last two are meant to indicate a specific Post Office.

The ZIP in ZIP Code stands for Zone Improvement Plan, and it was introduced July 1, 1963, as part of a larger Postal Service Nationwide Improved Mail Service (NIMS) plan to improve the speed of mail delivery.

What each number means. The first digit designates a broad area, which ranges from zero for the Northeast to nine for the far West. The two following digits are the code of a central post office facility in that region. The last two digits designate small post offices or postal zones.

The first digit of a five-digit ZIP Code divides the United States into 10 large groups of states (or equivalent areas) numbered from 0 in the Northeast to 9 in the far West. Within these areas, each state is divided into an average of 10 smaller geographical areas, identified by the second and third digits.

?the five-digit ZIP number is a structured code in which the first digit identifies one of ten large areas of the Nation, and the second digit indicates a State, a geographic portion of a heavily populated State, or two or more less populated States.

Why Stores Want Your Zip Code. According to Ann Carrns in her article for The New York Times: Stores want your ZIP code because, combined with your name from your credit card, they can use it to find out other information about you from commercial databases, like your full mailing address.