Incorrect / No Discount on Regional Shipping Rates

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I'm setting up shipping for a client on a new Shopify store. Regional rates of labels are not discounted, even though Shopify says there's a discount. For instance: Shipping a package to someone in our Zone 4 costs $9.42 via the USPS postage calculator, and is the exact same price in Shopify (the discount of $2.30 isn't reflected in the actual label price). Please see the included screen shots. Flat rate purchases and First Class rates are properly discounted (the price of the label is less the discount from the retail rate).

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