If you’re a family who still enjoys the charm of mailing letters or a small business owner who relies on the postal service, make plans to adjust to the latest stamp price increase. The price of a stamp is going up by 3 cents Sunday, marking the third price hike in the last 12 months. This is the 17th rate change since 2000 and the shortest time between stamp increases in the Postal Service’s history.
The Postal Service has justified the stamp price increase as a necessary measure to “offset the rise in inflation” and to address “continued elevated inflation and prior years defective pricing model.” However, critics argue that these hikes are causing a rapid decline in mail volumes, a phenomenon they’ve dubbed ‘stampflation.’
Kevin Yoder, executive director of the advocacy group Keep US Posted, points out that each time the price of a stamp goes up, mail volumes decrease at a faster rate than projected. After January’s stamp price increase, mail volume immediately decreased nearly 9% year-over-year, while expenses increased by 16%.
The number of pieces of mail handled by the post office has been on the decline in recent years as more people pay bills online, email Evites for parties and send fewer physical thank you cards. In 2022, USPS handled 127.3 billion pieces of mail compared to the high of 213.1 billion in 2006.
So, what does this mean for you? Starting Sunday, July 9, the price of a stamp for a 1-ounce letter will be 66 cents, up from 63 cents. The first-class stamp will be double the 1999 rate of 33 cents. Other increases include metered 1-ounce letters, which will cost 63 cents, up from 60 cents, and postcards sent domestically, which will be 51 cents, up from 48 cents. International postcards and 1-ounce letters will be $1.50, a 5-cent increase.
But it’s not just the stamps. The cost for Certified Mail, Post Office Box rental fees, money order fees, and insurance are also increasing.
If you’re feeling a bit overwhelmed by this stamp price increase, here’s a tip for you: stock up on Forever Stamps. The Postal Service first started selling Forever stamps in 2007, when they cost 41 cents. Since 2011, all first-class commemorative stamps have been issued as Forever stamps. These stamps will always be valid for the first-class mail postage rate, no matter how much the price of a stamp increases in the future.
Unfortunately, this may not be the end of the price hikes. More stamp price increases are expected as part of Postmaster General Louis DeJoy’s 10-year Delivering for America plan “to achieve financial sustainability.”
So, whether you’re a family sending out holiday cards or a small business shipping products, it’s time to strategize. Consider investing in Forever stamps, explore digital alternatives, or adjust your budget to accommodate the stamp price increase. The postal service is still a vital part of our communication infrastructure and with a little planning, you won’t even notice the stamp price increase today.
Today, the New York Times has a report on how states pay the USPS to mail ballots to voters.
Senator Chuck Schumer of New York, the minority leader, said the Postal Service under the postmaster general, Louis DeJoy, a major donor to the Trump campaigns, had “informed some states that they may need to pay a first-class rate to deliver ballots rather than the normal rate — nearly tripling the cost.”
Important note: As a voter, know that regardless of how you get your ballot delivered to you, you’ll be returning it to your local voting authority with First Class mail. The debate is over how states get the ballot to you in the first place. There are two ways states have been distributing ballots to voters:
First Class mail — This is the same mail service that delivers consumer letters you mail every day. It’s the same service you get by paying the price of a stamp and attaching it to a letter. It usually takes 3 to 5 days.
Marketing mail — This service is meant for bulk mailing and most “junk mail” and the USPS defines this to include “printed matter, flyers, circulars, advertising, newsletters, bulletins, catalogs and small parcels.” It’s cheaper, but it can take up to 10 days to reach its destination.
Because marketing material is a lower-priority than other mail mail, USPS officials have been recommending that states use the more expensive First Class postage option. That way, they’ll get ballots to voters promptly and reliably. For some states, the more expensive First Class option is too expensive.
It’s a difficult time to stay in touch with loved ones and continue to operate a business as the Coronavirus outbreak forces many people to shelter in place or self-quarantine at home. The USPS is an essential service that has committed to continuing to operate but if you’re trying to send mail without leaving home it can be difficult.
There’s one solution with three incredible benefits during this tough time:
Stay home – Weigh, purchase and print postage without leaving your house
Send official postage – Print official USPS postage domestic or international
Save money on stamps – Save money on postage with stamp discounts you can’t get at the Post Office
“Be like a postage stamp. Stick to one thing until you get there.”
― Josh Billings, 19th-century American humorist
Effective 1/27/19, the United States Postal Service (USPS) has made changes to the price of a stamp. While some decreases can be found, the big change came in the largest-ever stamp price increase in history. And some prices have seen no changes at all. Read on for a complete guide to the price of a stamp and other postage increases 2019!
USPS Postage Price Changes – At a Glance
Mailing Services Products – approximate increase of 2.5%
Priority Mail Express – approximate increase of 3.9%
Priority Mail increased approximate increase of 5.9%
Stamp Prices Are Low – An Overview
The USPS reportedly has some of the lowest postage rates in the world and offers competitive rates for shipping. The USPS, unlike other carriers, does not add extra fees for things like fuel, residential delivery, weekend delivery, or holiday season delivery. In addition, seeing zero tax dollars for operations, it subsists solely on sales of postage, products, and services to support its entirety. Before
we get into the new prices, to whet your appetite, here are a few other USPS
493.4 million mail pieces are
processed each day
That is 20.6 million each hour
Per minute, 342,638 are processed
And 5,711 mail pieces are
processed every second
So, when you send your grandmother a letter letting her know you’re doing just fine, and yes you did get that $5 she mailed last week (thanks, Oma!), that’s factored into these statistics. When you sell your DVD boxset of The Nanny on Ebay because you have a digital copy now, and you ship that on to Utah, that’s another tick on the ol’ USPS fact sheet. When your hand has uncramped enough to finally get around to physically mailing out those thank you notes from your graduation party six months ago, those too are included in the 493.4 million mail pieces process each day!
Price Increases for First Class Mail
Here’s a recap of what First Class Mail gets you, at just the price of a stamp:
Best priced service for mail up to 13 oz
Delivery in 1 to 3 business days
Insurance for loss or damage up to $5,000 for merchandise only
Can combine with extra services to confirm delivery
Up to 3.5 ounces free with commercial priced letters and cards
Changes to Price of a Stamp for Letters and Postcards
With the 2.5 percent price increase for Mailing Services products, the most notable of the new rates is a five-cent increase to the price of a First-Class Mail stamp, from 50 cents to 55 cents. The 10 percent hike is the largest price increase in the history of the USPS. The second largest price hike was in 1991, when the price of a stamp increased from 25 cents to 29 cents.
Even though the basic 1-ounce price of a stamp went up, another part actually went down. The “additional ounce” price for letters will see a decrease of six cents, from 21 cents to 15 cents. Additional ounces cover anything that weighs more than 1-ounce which is typically a larger document or invitation. This means the 150 wedding invitations (typically a 2-ounce stamped letter) you need to send out may only cost 70 cents a piece, rather than 71 cents. And who doesn’t want to save $1.50?
Complete Pricing Breakdown
Letters (1 oz.) $0.55
Letters – Additional Ounces: $0.15
Non-Machinable Surcharge: $0.15 (see below!)
Letters (metered 1 oz.): $0.50 (metered mail is when a postage meter stamps directly onto the letter)
Outbound (Outgoing) International Letters (1 oz.): $1.15
Domestic Postcards: $0.35
Please note the base price of $0.55 is for a standard-sized, rectangular envelope. If your envelope is square, oversized, or unusually shaped, costs for stamps begin at $0.70. This factors in your non-machinable surcharge (see below).
In the same vein, stamps for standard-sized, rectangular postcards start at $0.35. Any oversized postcards require letter stamps, which as we’ve now learned, start at $0.55.
Complete Sizing Guide
Letters qualify under the following dimensions:
Length – minimum 5”, maximum 11 ½”
Height – minimum 3 ½”, maximum 6 ⅛”
Thickness – minimum .007”, maximum ¼”
Cards qualify under the following dimensions:
Length – minimum 5”, maximum 6”
Height – minimum 3 ½”, maximum 4 ¼”
Thickness – minimum .007”, maximum 0.016”
What is a “Non-Machinable” Surcharge?
If you have
unusually shaped mail pieces – like uneven, stiff, square, or vertical
envelopes – and the machine is unable to sort them into the correct pile, or if
your mail has extras – like buttons, clasps, or string – it must be
hand-cancelled (processed by a human being). These mail items are considered
“non-machinable,” and a fee of $0.15 may be applied, even if they weigh less
than the standard letter 1 oz.
What About Forever Stamps?
If you’re wondering about First-Class Mail Forever stamps – introduced in 2007 and designated for 1 oz letters that don’t expire even if stamp prices increase – they will still be available for purchase, but at the increased rate of $0.55. Forever stamps purchased before the increase on 1/27/19 will, of course, be honored.
Changes to Priority Mail Prices
First, here’s a quick recap of what the USPS Priority Mail service includes:
Delivery in 1 to 3 business days
Delivery available seven days a week in most locations
Prices starting at $7.35
Can combine with extra services to confirm delivery
Domestic Priority Mail Retail Flat Rate (Boxes and Envelopes)
In an attempt to simplify things, the USPS introduced the first flat rate envelope in 1991 and the first flat rate box in 2004. As their name indicates, there is a flat rate – a one-time fee – and no further weighing or calculating is needed. If they fit in the box, the price is locked and predictable. These ship in 1-3 business days.
Small Flat Rate Box
8 11⁄16″ x 5 7⁄16″ x 1 3⁄4″
Medium Flat Rate Box (top loading)
11 1⁄4″ x 8 3⁄4″ x 6
Medium Flat Rate Box (side loading)
14″ x 12″ x 3 1⁄2″
Large Flat Rate Box
12 1⁄4″ x 12 1⁄4″ x 6″
APO/FPO Large Flat Rate Box*
12 1⁄4″ x 12 1⁄4″ x 6″
Regular Flat Rate Envelope
12 1⁄2″ x 9 1⁄2″
Legal Flat Rate Envelope
9 1⁄2″ x 15″
Padded Flat Rate Envelope
12 1⁄2″ x 9 1⁄2″
*The USPS offers a discount of $1.50 per Priority Mail Flat Rate Box to those who want to send loved ones serving in the military a special delivery. Just look for the abbreviation APO – which stands for Air or Army Post Office – or FPO – which stands for Fleet Post Office (Navy).
A Note On First-Class Package Service and Zone-Based Pricing
First-Class Package Service, the light, fast service primarily used by businesses for fulfillment purposes will move to zone-based pricing. These zones are predetermined and factor the distance from where shipping begins to the package’s destination. According to USPS, this is to better align with the cost of service and is intended to improve value based on distance.
Concluding Thoughts on Stamp Price Increase
According to the New York Times, within the last ten years, the number of first-class mail pieces sent through the United States Postal Service has fallen by more than 50 percent. If you don’t include invitations and holiday cards, the average American household receives only 10 pieces of personal mail each year. Although the statistics presented earlier certainly seem staggering (5,711 mail pieces are processed every second?!), the fact of the matter is Americans just aren’t communicating the way they used to. And yet, a postal worker visits every mailbox several days a week, regardless of the volume.
One needs only to briefly visit the USPS website before discovering that, though the information is certainly helpful, it isn’t the most navigable or consumer-friendly. Perhaps if data was arranged in a one-stop, confusion-free way, folks would be able to move past the terms “non-machineable” and “automation,” and quickly reference whether or not their letter or package fits in a particular category, and how much that category costs. Yeah, someone should probably make that quick-reference…
So, here it is! Our Ultimate Guide to the 2019 Price of a Stamp.
The United States Post Office (USPS) has announced that stamp prices will increase this weekend. What does that mean for the typical household who mails greeting cards, thank you notes, bills, and letters? For starters, the price of a stamp will now be 55 cents, up 5 cents from the previous price. You can also expect to pay anywhere from 2.5% to 5.9% more for shipping services with the USPS such as Priority Mail or Priority Mail Express.
Read on to learn more about how you can ensure that yourmail has sufficient postage with the imminent stamp price increase.
When will the new stamp price be effective?
The new price of a stamp will take effect Sunday, January 27, 2019. This is the date when the price changes are slated to take effect. Whether your post office will continue to postmark and deliver mail that has been dropped off in post office boxes before Sunday with the old pricing depends on your local post office’s practices. Many post offices will return mail with insufficient postage to the sender and others will let some letters through for the next few days.
Those who have already mailed First Class letters which have been postmarked before Sunday, January 27 will not be affected by the price increase. A postmark is meant to cancel affixed postage and indicate that the USPS has taken custody of the letter or package for its delivery. You can read more about postmarks in the USPS handbook here.
Individuals who use a Forever Stamp to mail letters weighing less than 1 oz. will not be affected by the price change, and can continue to use their old Forever Stamps which they bought at the lower stamp prices.
How much are postal rates increasing?
The most significant change to the postal rates for those who regularly pay bills by mail, send greeting cards, etc., is the price increase for the cost of the Forever Stamp. Forever Stamps were created by the USPS in 2007 to mail First Class letters regardless of the postage rate. On January 27, 2019, the price of Forever Stamps will increase from 50 cents to 55 cents.
Does this increase apply to any other postage pricing?
First Class letters that are metered will undergo a rate increase from 47 cents to 50 cents for metered mail weighing less than 1 oz.
First Class outbound international letters will not undergo a rate increase and will remain at the current rate – $1.15 for letters weighing up to 1 oz.
First Class Domestic Postcard stamps will remain at their current rate – 35 cents.
Priority Mail and Priority Mail Express services will also see a price increase. Priority Mail Express prices will go up by 3.9%, while Priority Mail will increase by nearly 6 percent. This includes both Priority Mail flat rate boxes and envelopes as well as “zone-based” Priority Mail pricing (which is based on geographic location as well as the weight of the letter or package). In general, as reflected by its most recent price increase, the USPS is moving toward zone-based pricing for both consumers and businesses to improve its efficiency. Check with your local post office for specific zone prices.
Will my stamps still work the same way?
Because the Forever Stamps were designed to work regardless of the exact “price of a stamp,” those who use Forever Stamps will largely remain unaffected by the rate change. You can still use your old Forever Stamps, regardless of how much you paid for them and when you bought them, to mail First Class letters weighing up to 1 oz. without affixing additional postage to the envelope.
First Class mail which weighs more than 1 oz. will require additional postage, but the price for additional ounces of mail will decrease with the most recent stamp prices which go into effect this weekend – down to 15 cents for each additional ounce rather than 21 cents. Therefore, using the old pricing rate for mail greater than 1 oz. will still ensure that your mail arrives promptly without interruption (because you’ll be paying a little more!). However, it’s best to consult with your local USPS office or use a postage scale to determine the new rate you will need to pay for letters weighing more than 1 oz.
The bottom line is that unless you are mailing heavier envelopes that are greater than 1 oz., you can continue to use your Forever Stamps with no interruptions or changes. You can continue to use the old pricing for extra ounces on First Class Mail (as the additional ounces pricing has decreased in the most recent price updates). For First Class letters greater than 1 oz., obtain the most up-to-date postage pricing to ensure that your mail is delivered without interruption and at the lowest price.
What do I do with old stamps worth 50 cents or less?
For stamps you have purchased at the post office that are not Forever Stamps – for example, specialty stamps or extra postage you may have received at an Automated Postal Center – you will need to ensure that you affix at least 55 cents of postage – the current Forever Stamp rate for 1 ounce letters. This will ensure you’ll have no interruptions in mail delivery, such as your mail being returned to you as undeliverable due to insufficient postage.
What are my options for buying the new stamps and postage?
Your options for buying the new stamps and postage remain exactly the same as before. Postage can still be purchased at a local post office, online at usps.com, though a postage scale and at a variety of local retailers such as drugstores and grocery stores. On the USPS website, you can continue to purchase stamps and postage at the most up-to-date rate.
Why is the stamp price increase so large this year?
The postage rate increases were approved by the US Postal Regulatory Commission, the US Postal Service’s regulating body, last fall. The USPS is constantly balancing competitive pricing with making sure the operation actually works. The across-the-board average increase of 2.5% is meant to ensure that the USPS postal prices can keep up with inflation.
Before this weekend’s price increase, the largest stamp price jump occurred in 1991, when postage stamp prices increased 4 cents to 29 cents (a 16% hike). Therefore, this weekend’s First Class stamp price increase, while only a 10% hike, is the largest increase – 5 cents — in USPS history.
The Bottom Line
The USPS is raising postage prices in an effort to keep up with inflation, stay competitive, and be able to deliver the best services to customers while also generating enough revenue to operate.
In summary, for those who are mailing normal-sized envelopes using Forever Stamps, with a weight of both less than or greater than 1 oz., you do not need to make any changes as your mail will still have sufficient postage and therefore be delivered without delays or interruptions. Those using Priority Mail or Priority Mail Express services to mail packages and letters can expect to pay anywhere from 2.9-5.9% more.
Customers can obtain the most up-to-date pricing at a USPS location or bookmark our homepage to make sure they always know the price of a stamp!
Beginning today, the price of a stamp has increased by two cents to a grand total of 49 cents. Any new purchases of Forever Stamps will now cost customers 49 cents each although any Forever Stamps bought before today will increase in value and cover the cost of mailing a letter — requiring no action by you.
This stamp price increase clocks in at 4.2%. Although 2 cents and a few percent don’t sound like much, when Forever Stamps are purchased in rolls of 100, the increase will cost consumers and businesses an extra two dollars. Organizations that depend on mailing standard letters and consumers who buy lots of stamps will be impacted the most.
Other postage prices are changing too
Discounted “metered mail” letters will actually go down by half a cent (this is usually reserved for businesses and bulk mailers). First Class mail “flats” will increase by 4 cents and settle at 98 cents. Postcards will remain the same price and the cheapest way to send mail at only 34 cents.
The price of a stamp before today’s increase
The price of a stamp has actually been exactly this high before. In a strange and unprecedented move, the price of a stamp actually went down in April of 2016. It was 49 cents at that time too and the change last year caused the price to settle at 47 cents after pressure in Washington forced the U.S. Postal Service, which controls the price of a stamp, to move the price down. In other words, just before this increase, the price of a stamp was 47 cents.
Forever Stamps maintain their value even when stamp prices go up.
This stamp price hike has been inevitable and we’ve known about it ever since the USPS announced it in October. The U.S. Postal Service is allowed to raise the price of a stamp to keep pace with inflation. That’s the rationale the USPS cited in their press release explaining the price change.
But behind the scenes, the USPS has been eager to make price changes upward because of the rising cost of maintaining their business. The huge burden that makes the mailing service challenging to maintain is a ballooning retiree health benefits program that costs billions per year. For bureaucratic reasons, their retirement health program isn’t integrated with Medicare and hasn’t been revised by Congress. Additionally, technology like email, unpredictable oil prices and the increased competition from other services like Amazon and FedEx have made it hard for the USPS to balance their budget. In 2016, they posted a massive $5.6 billion net loss. Any price increases, including adjustments of just a few cents, can help make up for this loss.
It doesn’t matter your mail volume! Every business needs, at minimum, a digital scale to be effective and efficient in handling daily mailing needs. This article dives into the 4 most prominent reasons. We’ll cover one really striking situation where you could be paying double for postage if you don’t invest in a digital scale. That hurts.
Save Time and Money by Sending Mail from the Office
The most important reason to own a digital scale is to save time and money by avoiding the post office. While it’s great to work with a USPS postage pro who can answer questions and help you decide on the right mailing services for you… you’ve heard the truth a hundred times here on Price of a Stamp: going to the post office is unfortunately a waste of time and money.
The reason you’re wasting money is simple: by shipping from home, the USPS offers you some deep discounts. For instance, a 15-ounce letter shipped Priority Mail within Los Angeles would cost $5.60 if you brought it to the post office. It would only cost $5.05 if you weighed it, labelled it online and shipped it from home. That’s the difference of a price ofa stamp right there! (Imagine how the price difference would add up over hundreds of shipments!)
The digital scale I use every day in my business.
And the reason you’re wasting time is by travelling to the post office and waiting in line. The USPS offers pick-up options for nearly any situation. Small items can be left in your mailbox for the postal worker to collect during his or her regular drop-offs.
Avoid Overpaying for Postage
Many small businesses only carry a few items — maybe even just one item. So they spec out approximately how much these items will weigh based on historical postage prices at the Post Office or product specifications and then use these numbers on a daily basis. Or, they use a bathroom scale (since they’re easy to obtain) and use that to weigh a few items, then round up to account for a bathroom scale’s margin of error (which could be as bad as +/- 10%). Some businesses print out the same weight’s worth of postage for every shipment or load on postage stamps until the price of the stamps exceeds the required postage.
If you weigh your packaging and products this way or pay for postage like this, you could be vastly overpaying for postage. Generally, the reason is obvious: by rounding up, you’re naturally adding weight to your shipments and then buying extra postage or stamps to compensate for it. Another factor that contributes to your rounding error is packaging. Day-to-day, the amount and type of packaging you and your employees use will fluctuate.
Using a scale will give you exact weight measurement for each shipment and avoid rounding up and over-paying.
Testing and Refinement of Postage Pricing
If you use a digital scale on a daily basis in your business, over time, you and your employees will discover cheaper, lighter packaging solutions. By simple virtue of the fact that you and your team will be measuring your postage pricing and weights every day, attention will be brought to how much money is wasted and where.
“What gets measured gets managed.” – Peter Drucker
Given this advantage, push it to its limit by experimenting with different packaging (paper, bubble wrap, peanuts) and different containers (envelopes, cardboard, paper stocks). Over time, you’ll learn how these things impact the cost of mailing.
Underpaying for Mail Damages Your Business — How to Avoid It
Under-paying for postage can wreak havoc on your business in many ways. It’s one way you can guarantee to pay more than 200% the regular postage rate. Here’s why: sometimes, if you put too few stamps on a package or pay for less postage than a package needs, the item will be returned to your doorstep. You aren’t reimbursed for the first round of postage and its value will be “cancelled” (stamped with a logo, rendering it useless). When you mail the package to the customer again, you’ll have to pay for more postage — effectively doubling the cost of mailing that item.
Another way that underpaying for mail can impact your business is when the package actually arrives at your customer’s door… because sometimes, the USPS will deliver the item with “postage due.” This means the postman will ask your customer to pay for the additional missing postage. This involves a somewhat convoluted process that could cause your customer some trouble. It’s bad customer service and it’s generally very unprofessional to leave your fans and prospects with such a headache.
Don’t wait another minute — invest in a digital scale so you can start saving your business’s valuable resources. You’ll avoid over and underpaying for postage, empower your biz to test packaging solutions and get discounted rates from the USPS.
The price of a stamp went up by 7% this Sunday, January 26th from 46 cents to 49 cents. Compared to typical standards enforced by the Postal Regulatory Commission, this is an enormous increase — all in the name of helping the USPS stay afloat as they face competition and economic challenges. And while the stamp price will have the most direct impact on consumers and businesses it isn’t the only the rate the Postal Service earmarked to hike this year. Surprisingly, some rates even went down.
Changes to Common Postage For Consumers: Forever Stamps, Postcards & Additional Ounces
While the price of a stamp for a 1-ounce letter went up by 3 cents, the changes are less observable in case of additional ounces and postcards, because the 2014 rates for each went up by only 1 cent. The change is 21 cents from 20 cents in case of additional ounces and 34 cents from 33 cents for postcards. This is not too much for a single mail piece, but multiplying the actual rate per additional ounces by ten (or any other value) will result in 10 cents (or more) paid in addition in 2014 by all consumers using USPS services. T
New Metered Mail Discount — One Way to Save
This year introduces a new loophole for the ordinary price of a stamp: by metering mail at home, a 1-ounce letter can be sent for 48 cents. This is a 1-cent saving now that the price has gone up.
Priority Mail — Nearly Unchanged; Deeper Discounts Online
The 2014 Priority Mail rates will remain largely the same since the product was recently re-vamped in 2013 to include tracking, insurance and predictable delivery dates. Except from the Priority Mail Large Flat Rate Box and APO/FPO/DPO Large Flat Rate Boxes, which both increase by 0.60 cents, and 3-pound Priority Mail, which goes down in price by about 10 cents, all the other rates for 2014 Priority Mail Flat Rate stay the same and see no increase nor decrease compared to the last year.
Deeper discounts will come with printing postage online in 2014. Savings came to a maximum of 20% for folks printing Priority Mail postage from home and in 2014, savings will increase to up to 35%.
Many Changes to Priority Mail Express and Flat Rate Services
The Priority Mail Express rates are facing an average increase of three percent in 2014. These changes are spread across weight ranges and mailing distance, or “zones.” Even though the rates for 0.5 pounds stay the same, they are going up by 59 cents, 98 cents and 66 cents for one, two and three-pounds packages respectively for Zone 3 packages. The rates go up by 1.79 dollars for Zone 4 mailing, 1.98 dollars for Zone 5, 2.32 dollars for Zone 6, 2.15 dollars for Zone 7 and again 2.32 dollars for Zone 8 – all prices are applicable only for one-pound packages. The increases might not correspond very much –- for instance, the rate for 2-lbs packages in zone six is higher (1.49 dollars) compared to the rate for 3-lbs packages in the same zone (1.29 dollars) — so it may be worth looking over the USPS’s full breakdown.
Among Flat Rate Express services, the Flat Rate Boxes rate is the only one that suffered a change in 2014 compared to the previous year, going up by 5.00 dollars (from 39.95 dollars to 44.95 dollars). The other rates, Flat Rate Envelope, Legal Flat Rate Envelope and Padded Flat Rate Envelope, remain at 18.11 dollars in 2014, which is the same rate as in 2013.
Wait! Didn’t the price of a first class stamp increase about, oh, five minutes ago? So why has the Postal Service announced yet another stamp cost increase?
If it seems postal rates increase every year, you’re right. On January 26th, the cost of a first class stamp went from 46 to 49 cents. This 3 cent rate hike in the price of a stamp is the Postal Service’s largest in more than a decade. Last year’s increase was by only 1 cent. It is now more expensive to mail a postcard as well, though that fee has only increased by a penny, to 34 cents.
Clearly, the mailing public didn’t make this decision. The Postal Service has been asking for a larger price hike for about three years now. Requests for these increases must go through the agency’s watchdog, the Postal Regulatory Commission (PRC). And the PRC is a tough overseer: they turned down the Postal Service’s 2010 request for an abnormal rate increase, claiming that they didn’t provide sufficient evidence of financial hardship. And the Postal Service was persistent — they then filed an appeal with the U.S. Court of Appeals, which agreed with the PRC and turned it down.
For this go round, the Postal Service presented evidence claiming that the agency had a loss of $22 billion between the years of 2008 and 2012. They also estimated a loss of $44 billion for the period between 2013 and 2014. The PRC uses a different calculation method than the Postal Service, however, and their grand profit loss total came in at just under $3 billion…
Therefore, they’re finally allowing the Postal Service to make only this amount in profits over the next eighteen months using higher than normal pricing. The Postal Service, which is hoping to keep this large rate hike permanent (the PRC says no, although this doesn’t mean postal rates will go down) is in the process of appealing the PRC’s decision to allow permanent increased rates.
So what did the PRC decide justified a stamp price increase at all? There are four main factors in their order granting the increase and they include losses suffered due to the economy, legal ramifications, the typical rate hike according to inflation and business risks around the USPS’s ability to operate.
Losses Due to the Great Recession and E-mail
The PRC agreed with the USPS that the recession was to blame for some profit losses in shipping, mailing letters, and doing business by mail; but they also blamed “electronic diversion” for much of the agency’s losses. This term refers to doing business over the Internet, e-mailing, etc. You should have seen this coming folks, and you didn’t, the PRC told the Postal Service. This reasoning plays a part in why the PRC thinks the Postal Service has lost much less money than they’re claiming.
The Stamp Price Increase Meets Legal Guidelines
Legally, the Postal Service’s rates are not permitted to rise at a greater rate than that of inflation and the PRC is required to enforce that. However, if the Postal Service can provide evidence of extreme financial hardship if capped by inflation, than this legal rule can be suspended (although this is somewhat debatable). The Postal Regulatory Commission says they have been provided with enough justification by the USPS to use this loophole. This is why they’re calling it an “exigent” rate hike.
Prices Can Go Up with Inflation Too
Despite all these mailing increases, the Postal Service actually hasn’t been keeping up with inflation over the years, so the decision issued by the PRC allows for an additional bump in price by 1.7%, just to keep up with inflation. This blends with the “exigent” part of the hike for a grand total of a roughly 7% increase.
USPS Services Were at Risk
In the PRC’s December decision, it was stated that the Postal Service “lacks a sufficient level of liquidity”(money) to provide services (like delivering packages and letters), and that the inflation-based rate alone will not be sufficient to finance operations. Because the USPS could show that their basic services were at risk, the PRC could justify a larger increase.
The PSRC will be reviewing this case to determine the fate of the exigent hike in May. In a strange twist in events, it’s possible that the price of a stamp will go down. Stay tuned…
While I’m not one to dole out financial advice (and neither is this blog), there’s one investment you should probably make in the next 7 days unless you’d like to address all your bills, thank you notes and wedding invitations to Ripoffsville this year. The price of a stamp is about to skyrocket on Sunday, January 26th and your best way around it is to invest in some Forever stamps before the postage increase.
What do I mean by “skyrocket”? Ultimately, the price of a stamp is only going up by 3-cents… from 46 cents to 49 cents. Doesn’t seem like a big deal, right? Well, percentage-wise, this is a 7% stamp price increase! By buying Forever stamps, you’d save 6 percent! …You still don’t seem persuaded. I get it… It’s barely even as good as a Bed, Bath and Beyond coupon.
Let’s look at it this way: historically, the price of a stamp has barely even kept pace with inflation — so, in a way, first class letter postage has actually gotten cheaper and cheaper each year. For instance, a 32 cent stamp in 1995, adjusted for inflation, would have been worth worth 49 cents in 2013. By comparison, this makes our actual 2013 rate, 46 cents, look like a bargain. And this historical pattern of inexpensive postage has persisted for quite a long time. In fact, something called the Postal Accountability and Enhancement Act of 2006 was supposed to force the USPS to raise stamp prices no faster than the rate of inflation. Forever stamps should never be a good deal, because legally speaking, stamp price increases should never exceed inflation.
Counter to all this, the USPS filed a request for an “exigent” price increase (by complaining about the Great Recession) and it was approved by the Postal Regulatory Commission. So, now the price of a stamp is actually bumping up to a full 49 cents — an increase of 6.5% — clearly higher than the rate of inflation. Inflation over the course of 2014 (which we can assume will be at least 1%) will remove the purchasing power of your postage budget as the year wears on. These economics will finally make this stamp price hike a bad one for consumers.
TL;DR: Buy some Forever stamps this weekend and thank me at the end of the year when you’re sending Christmas cards at a 6% discount. If not for the sake of beating the system, saving one more trip to post office hell will easily pay for many more stamps.