To constrain an image to fit within a given size, create a single-cell table with a fixed height and width to wherever you want the image to go, then insert the field code into that. The inserted images will resize, at the correct aspect ratio for the picture, to fit the space available. No VBA or post-merge processing required.

To create a single-cell table with a fixed height and width, use Insert|Table and choose one cell. Then, for the:
• rows, set the exact row height under Table Tools>Layout>Properties>Row>Specify Height>Exactly.
• columns, set the preferred column width under Table Tools>Layout>Properties>Columns,
and uncheck the 'automatically resize to fit contents' option under Table Tools>Layout>Properties>Table>Options. You might also want to set the cell margins to 0 all round. It's also a good idea to format the table paragraph with 0 before/after spacing.

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Cheers,
Paul Edstein
[Fmr MS MVP - Word]