Forever Postage Stamp - interesting idea
 

USPS GOVERNORS APPROVE MAJORITY OF POSTAL
REGULATORY COMMISSION'S PRICE RECOMMENDATIONS,
INCLUDING FOREVER STAMP

Request Reconsideration for Some Mail Classes
Approve Shape-Based Pricing
Board of Governors Set May 14 for New Prices
WASHINGTON, D.C. — The Governors of the U.S. Postal Service (USPS) today approved an increase in the price of a First-Class stamp to 41 cents, authorized the issuance of the Forever Stamp, approved shape-based pricing, and set May 14 as the date for implementation of these changes. (See chart below.) However, they delayed implementation of new prices for periodicals and requested reconsideration for some mail classes.

USPS proposed new rates on May 3, 2006, and the Postal Regulatory Commission (PRC) issued its recommendation on Feb. 26, 2007. The Governors spent considerable time deliberating the PRC's recommendations — meeting six times and rewriting several drafts of their decision over the past 22 days — before voting earlier today. (See complete decision of the Governors at usps.com/ratecase.)

"We praise the PRC for its early and thoughtful recommended decision," said Board of Governors Chairman James C. Miller III, "and appreciate the comprehensive analysis the Postal Service staff provided in its rate proposal."


The Governors approved the Forever Stamp, which will sell at the new 41-cent First-Class Mail one-ounce letter rate. The value on these stamps will always be the one-ounce letter rate and can be used for any future one-ounce letter mailing without extra postage.

"The Forever Stamp is a consumer innovation that delivers convenience and value and will help ease the transition for mailing letters when prices change," said Chairman Miller.


Shape-based Pricing - The new prices also reflect differences in the costs of handling letters, large envelopes (flats), and packages. Mailers are encouraged to consider options available to reduce postage costs. For example, if the contents of a First-Class large envelope are folded and placed in a letter-sized envelope, mailers can reduce postage by as much as 39 cents per piece.


The Governors, however, requested reconsideration of the PRC's rate recommendations for Standard Mail flats (catalogs), the Non-machinable Surcharge for First-Class Mail letters, and the Priority Mail Flat-Rate Box.
Standard Mail Flats - The Governors are concerned that price increases recommended by the PRC may impose an unnecessary degree of "rate shock" on the catalog industry, particularly small businesses. The recommended increase for some catalog mailers is as much as 40 percent, which is more than double what the Postal Service had proposed.


Non-machinable Surcharge - The PRC decision on First Class Mail two-ounce and three-ounce letters does not differentiate between machinable and non-machinable. The Governors believe this warrants further analysis to ensure there are incentives for mailers to provide letters that can be processed at lower cost on efficient sorting equipment.


Priority Mail Flat-Rate Box - The PRC recommended a rate of $9.15 for the Priority Mail Flat-Rate Box, which is $1.05 above the current rate and 35 cents higher than the Postal Service proposal of $8.80. The Governors believe a rate below $9 would be more appropriate for this popular consumer and business product and would be cost-justified.
Delayed Implementation


The Board of Governors also delayed until July 15, 2007, implementation of the new prices for Periodicals (magazines and newspapers) to allow time for the publishing industry to update computer software and adjust to the complexity of the PRC-recommended rate structure for periodicals. USPS had proposed a single container charge for periodicals to encourage efficiency, but the PRC recommended 55 different prices based on container type, entry point, and level of sortation.


Note: The Postal Service has nine Governors who are appointed by the President with the advice and consent of the U.S. Senate. They are members of the Board of Governors, which also includes the Postmaster General and the Deputy Postmaster General. Only the Governors can approve a PRC rate case recommendation, but the full Board sets the implementation date for the new prices.


An independent federal agency, the U.S. Postal Service is the only delivery service that visits 146 million homes and businesses, six days a week. It has 37,000 retail locations and relies on the sale of postage, products, and services to cover its operating expenses. The Postal Service has annual revenues of $73 billion and delivers nearly half the world’s mail.

EXAMPLES OF NEW PRICES FOR POSTAGE
Effective May 14, 2007
Current New

First-Class Mail ®
Letters, Bill Payment; Greeting Card $ 0.39 $ 0.41

Wedding Invitation (2-ounce) $ 0.63 $ 0.58

Postcard $ 0.24 $ 0.26

Priority Mail ®
Flat Rate Envelope $ 4.05 $ 4.60
Flat Rate Box $ 8.10 $ 9.15 **
12-pound (Chicago to Los Angeles) $19.80 $24.10

Express Mail ®
Flat Rate Envelope $14.40 $16.25
1-pound package $18.80 $19.50

Parcel Post ™
1-pound package $ 3.95 $ 4.50
5-pound (Chicago to Los Angeles) $ 9.11 $ 9.50

Bank Statement
(2 ounces, 3-digit, barcoded) $ 0.545 $ 0.459

Utility Bill
(5-digit, barcoded) $ 0.293 $ 0.312

Just wait and watch the sales of the stamp when the next price increase is announced. I will buy some for stockpiling when this happens... but not a lot.

I tried that yesterday, but no news stamps yet, so I had to buy the old and try and use them up before I have to add extra:(

My thinking is that the "forever" stamp will be useful only when the next rate hike (beyond 41 cents for a 1st class letter)...so penny pinchers may want to pick up a few thousand, but don't use them until after the next rate hike.

Between January 1, 1980 and January 1, 2007 (a period of 27 years), stamps saw an average annual increase of 3.6023%.

Between January 1980 and January 2007, inflation saw an annual average of 3.6046%.

So there is not a lot of difference. The main difference is that inflation is fairly steady and stamps go up in jumps every year or 2. So, the trick is to buy a years worth just before the price goes up.

However if your time is worthy anything at all, just forget the whole thing and buy stamps when you need them.

Good point KB...I usually buy stamps a couple of hundred at a time...because I hate standing in line at the post office.

You might lose considering inflation.

I think you mean "just AFTER the price goes up."

After wouldn't make sense. Stock up before a price increase so you buy them at the lower price.

What's this stamp you speak of???

I use maybe 10/month... I do most stuff on-line if possible.

No, I would buy them before the price goes up. This is assuming that the USPS will announce the price increase and they have the stamps in stock.

The post office is not supposed to make money. When gas goes up they need to charge more. If their workers need a pay raise/pension/health care, they charge more. That is why the cost of stamps follows inflation so closely.

The new forever stamp will cost $.41. When the price of stamps goes up again it will probably cost $.45. I will be able to still use the old forever stamps that I bought for $.41 untill I run out. Maybe I should buy a bunch of stamps for my kids to use. When I was very young, stamps cost 4 cents. In roughly 50 years the cost has multiplied by 10. That means my kids will be buying $4.00 stamps in 2057. Should I buy a lifetime of stamps? Well, let's say I use one stamp per week. That's 52 stamps per year. Let's say I live for another 45 years. I'll need 2,340 stamps. For these 'Forever' stamps at 41c each that's a cost of $949.40. If I lose them in a house fire, they are worth nothing. On line bill payment has decreased a lot of peoples postage buying habits. I don't use a lot of stamps anymore. Christmas cards are the big expense.


There will be a savings for the USPS in 1 cent stamps that cost more to make and market than they are worth. There will be a savings of my time as well. THe USPS is hoping people will buy greater quantities of the stamps and they will have a temporary boost in revenue. France and UK already do something like a forever stamp.


We are assuming that "forever" really means "forever". This is a government agency speaking you know!

stamp prices are the least of my worries.

Wait. I think we're talking about different things. I assumed KB was talking about buying 39 cent stamps right before a price increase (i.e. to 41 cents). So in my mind, I was wondering why you'd want to do that.

I guess you and KB are referring to buying the "forever stamp" right before a price increase. That would make more sense.

However, KB also points out that with the cost of inflation, you'd have to wonder if that was worth your while. Online billpay makes it a bit of a moot point, though.