Yes, and it runs on an image with a shadow occluding half the cap, held in someone's shaky hand, with low-contrast colouring. AFAIK, postal scanning is done in good lighting with known optical parameters of blue/black on white. The main part used for sorting the postal/zip code, which is relatively clear and in caps/numerals. Almost all mail has printed labels. Accuracy rates are not published, many people are hired to sort through the ones that cannot be automatically classified.

It may not seem like a huge jump conceptually but in engineering terms it's a big deal.