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Expanding on Papitou's answer, it is a postal zone system put into place in the United States during the period 1960-65. ZIP (or Zip) is short for Zone Improvement Program. A zip code consists of either five or nine digits (typically just the five-digit zip code is used). The first two digits indicate the state (New Mexico, for instance is 87), the next three indicate the postal region (as set by the United States Postal Service as delegated by the US Congress) within the state. The optional four digits follow a dash (-) in what is called ZIP+4, and indicates a specific delivery instruction, i.e., a rural route, specific building delivery (perhaps a corporate mailroom) or some other special-delivery zoning consideration as established by USPS.
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