Going Postal – On Rate Increases and Forever Stamps

The US Postal Service wants to raise the price on stamps, from 39 cents to 42 cents, after having just raised them this year. First-class stamps have gone up 13 times since 1974, when the price to mail a letter went from 8 to 10 cents. Kearney said rate increases soon could become an annual affair.

To help offset the pain of always having stamps that are not current, the post office is proposing a new type of stamp to supplement the regular first class stamps. The post office says these ‘forever stamps’ would cost the same as a first-class stamp but would provide a hedge against future postal rate increases and end the search for 2 and 3 cent stamps every time there is a price increase.

There are two problems I see with this idea. First and foremost, this is a great deal for the post office if people stock up on stamps. This will increase current year income without any matching expense since people are ‘hoarding’ the ‘forever’ stamp. Of course, if people hold on to the stamps for a couple years and then use them, the post office will have to increase rates because they have expenses but no corresponding income. Of course that is a new postmasters problem.

Second problem is that there is an inconsistency in their story. Since these are ‘special’ stamps, they do not replace regular postage stamps for 39, 42, or whatever cents. If I have a bunch of regular 39 cent stamps now, and they raise it to 42 cents, I am still going to need 3 cent stamps. They will need fewer of these if everyone is buying ‘forever’ stamps for the 3 months before a rate increase, but not reduce the need to none. Also there is no talk of a ‘forever’ stamp for post cards, and our small office mails out 100 of those a week and they need additional postage every time the rates go up.

The only way I see this really working is if the post office quits putting values on all first class mail stamps and instead put, say, a gold star on it. So any gold star stamp is always good for mailing a first class letter whether the stamp has a flag on it, mickey mouse, or Elvis Presley.