Stamp Price Increase in 2014 — Going Up at Unprecedented Rate

On Christmas Eve, the Postal Regulatory Committee (PRC) officially approved an unprecedented increase to the price of a stamp — a full 3-cent increase — to take hold at the end of January 2014. This will bring the total price of a first class stamp to 49 cents from the current rate of 46 cents. The official change takes place on January 26th.

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Three cents may not seem like a lot but this is a 6 percent increase to the price of a stamp which is unprecedented.

The USPS is not ordinarily permitted to increase its prices beyond the rate of inflation. The ordinary price restrictions would have only raised prices by 1.7 percent — only enough to add one cent to the price of a stamp. Although a 3-cent increase sounds like nothing, the rate increase that the PRC approved comes to about 6 percent price hike which is unprecedented in USPS history… and an increase like that can have a real impact on businesses that depend on mailing letters.

The PRC made clear that this is a temporary increase to the price of a stamp and that it may only last 2 years although they did not outline a plan or guidelines for how the USPS will reverse the new rate. Instead they place the onus on the USPS to “report quarterly on revenues generated by the rate increases” and to come up with their own schedule to “phase out the rates once they have produced the revenue justified by their request.” Since the 1-cent portion of the price hike was in line with inflation, only 2 cents worth of the price increase will have to be rolled back.

The USPS has been suffering for a variety of reasons — from technology to inefficiencies in how it operates — however the regulatory committee that approved the USPS’s stamp price increase blamed the Great Recession for what they’ve been calling an “exigent” price hike. The agency believes that the financial harm caused to the USPS during the recession is an extenuating circumstance that justifies an extreme price increase.

Postage Rate Increase in 2014 — USPS Hopes to Hike Stamp Price by 3 Cents

Today, the USPS announced a proposal requesting permission to increase the price of a stamp by 3 cents in January 2014. That would hike the price of a stamp from 46 cents to 49 cents. But don’t jump the gun and invest in forever stamps just yet — the rate increase might not get approved.

It’s no secret that the Postal Service is losing tons of money — some say up to $15 billion per year. The reasons behind these losses run the gamut: from truck fuel and retired employee healthcare to competition from email, social media and private mail services. This increase request is another attempt at raising revenue to help cover ballooning costs and impossible margins. According to the USPS, these new price changes will add $2 billion in revenue in 2014.

When the USPS wants to enforce a postage rate increase, it proposes them to the “Postal Regulatory Commission” or PRC. The commission is an independent government body which regulates how the Postal Service operates and it’s required by law to prevent the price of a stamp from increasing by more than the rate of inflation each year. This is what would makes this proposal so controversial: the dollar has only inflated about 1% in the past 12 months and isn’t expected to deviate much more than that by 2014. Unfortunately at 1% inflation, the USPS should only be allowed to increase the stamp postage rate by one cent. Instead, they’re asking for 3 cents. The last time this happened, this year in January, the USPS raised the stamp price to 46 cents from 45 cents… which was copacetic with inflation and approved by the commission.

3-Cent Postage Rate Increase in 2014

The USPS is hoping to increase stamp prices to 49 cents.

Mickey Barnett, the Chairman of the Postal Service Board of Governors, called this a “last resort” to help deal with the USPS’s financial challenges. They’ve made attempts at reforming the organization through legislation, including a threat to end Saturday delivery, which wasn’t successful. The Postal Regulatory Commission has the latitude to raise prices faster than inflation if circumstances are “extraordinary or exceptional,” and while the Post Office’s fiscal situation may suit that qualification, it hasn’t been a sufficient justification in the past. So, it seems unlikely that you’ll find the stamp price increasing by more than one cent in January. If your business depends on mailing letters, do count on a postage rate hike early next year (and stock up on forever stamps!) but it’s unlikely to outpace inflation.

The USPS hopes to enforce the new postage pricing on January 26th, 2014. The full proposal also includes a one-cent hike to the postcard rate, making it 34 cents; and a one-cent increase on additional weight for letters, making it 21 cents per ounce. They’ll submit the proposal to the PRC tomorrow.

Update 9/26/13: The USPS submitted their proposal today, as promised. The chair of the House Oversight & Government Reform Committee commented, pointing out that such a hike is a desperate measure and will push businesses away from using the USPS all together. Other blogs are posting about how buying forever stamps in advance of the increase could be a scheme for making quick cash.

USPS Improves Priority Mail Without Price Increase

The USPS has improved its Priority Mail service without even raising the price of a stamp. If you use the post office frequently, you hardly expect improvements without a postage rate increase. There’s now faster, better Priority Mail service without a single penny added to the postage price.

What’s New with Priority Mail

There are many new features and benefits for Priority Mail including: new packaging, better tracking and free insurance. Also new to Priority Mail  is faster service — packages may arrive a day earlier. Before, Priority Mail could take two to three days. Now depending on from where and to where you are mailing, your Priority Mail could arrive overnight. In many cases Priority Mail service will now compete with the big overnight delivery companies like FedEx an UPS. And — you won’t be shocked by how much it costs!

Real Overnight Service without Price Hike

There is no postage rate increase for Priority Mail Service (yet!) even though packages could arrive as soon as overnight. While packages may arrive early, you won’t have a deliberate choice between overnight, two-day, or three-day delivery. This is always determined by the market you live in and you’ll get an estimate of the service speed when you purchase it. So if you are in a big city, chances are that you will get all the perks you are looking for with none of the punch to your pocketbook. The postage price for Priority Mail will remain flat, even though packages are expected to reach their destination sooner.

USPS Packaging, Tracking and Insurance Improved

The stylish new priority mail boxes.

The stylish new priority mail boxes.

The packaging at the Post Office has gotten an update, the tracking is better and there is now automatic insurance for all Priority Mail. For now, you can still use your old Priority Mail boxes but the new, stylish ones are already on the shelf at your local post office branch. In general, the tracking services for Priority Mail has also improved. New barcodes on the labels make finding your package easier and you will learn your expected delivery date as soon as you place your order. The free insurance depends on which payment method you use. You can get up to $50 of insurance for shipments sent at the Post Office or sent using Commercial Base Pricing. Businesses can get up to one hundred dollars worth of free insurance for shipments sent using Commercial Plus Pricing. (Commercial Base and Commercial Plus services depend on mailing volume.) You can always buy more insurance but this new feature will surely give you peace of mind.

Express Mail Changed to “Priority Mail Express”

The USPS has also rebranded Domestic Express Mail as Priority Mail Express. It’s still the same service but there is new packaging for this service as well. The USPS did a good deal of market research and found that the old packaging and service details were often confusing for customers. All of these changes were made in order to streamline the options for post office customers.With so many shipping services that compete with the USPS, making these changes seems like a smart move.

To stay competitive, it will be important for the USPS to continue to listen to its customers and to create valuable services in the future. Don’t be surprised if the prices go up, though. It is well known that the USPS is struggling and it will be a big win for their growth if people are satisfied with the changes. The best advice is to check out the new Priority Mail while the old pricing is still in effect.

First-Class Postage — What Exactly is First-Class Mail?

First-class postage is a type of mail which indicates the level of service a package or letter is supposed to receive from a postal service. Most folks in the US think that all mail is sent first-class and that the label is a kind of misnomer. That’s because most consumer-facing mail is sent this way. (In the UK, there’s an actual distinction between classes of postage for consumers, so it’s different.) You’re about to find out what first-class mail really is.

First-Class Postage and Other Classes of Mail

First-class mail gets higher priority in terms of delivery time over other classes of mail. While the USPS doesn’t explicitly break other types of mail into classes, there’s a rough hierarchy which can be broken down in to four main classes of mail:

  • First-class mail — Letters, postcards or packages up to 13 ounces qualify as first-class mail. Put a postage stamp on a standard letter and you can send it anywhere in the United States for the price of a stamp.
  • Second-class mail — Officially known as the “Periodical” class of mail. The USPS reserves second-class mail for newspapers magazines and any other periodical that is published more than four times a year at regular times. Special categories of periodical mail (eduction, nonprofits) get lower postage prices.
  • Third-class mail — The USPS calls third-class mail “Standard Mail.” Its bulk pricing is designed for catalogs, newsletters, flyers and advertising.
  • Fourth-class mail — Also known as “Media Mail,” fourth-class mail is an inexpensive way to ship educational materials. Books, film, audio recordings and even loose notes are eligible but delivery times can span up to 8 days because of the low priority.

It’s obvious, but most consumers wouldn’t encounter anything but first-class postage since the other classes of mail are primarily for businesses or special needs.

First Class Postage Rates

Pricing for first-class mail varies quite a bit but you can calculate all sorts of mail prices with this handy postage calculator. Basically, the price of a stamp is standard (keep track of that here on the homepage!) and that covers most first-class mail — all letters under one ounce in weight. The only exception is a postcard which you can mail for 32 cents. Other letters range in price based on weight up to about $1.

Flats and boxes range in postage price from about $1 to up to about $4, depending on how many ounces the item weighs, as long as it’s less than 13 ounces overall. This is why it’s best to just use a calculator.

How Long Does It Take?

According to the USPS, first-class mail takes two to three days to arrive with its recipient. Unfortunately, there’s no guarantee around this — so you won’t get your money back if it doesn’t get there in time. But some first-class mail arrives in only one day.

The postal service only factors their transportation into their estimate so other variables like when your mail gets picked up aren’t a part of the equation. To eliminate that issue, it’s best to drop mail directly at the post office. Official mail boxes or your own mailbox can have sporadic pick-up times so it’s harder to get a reliable timeframe using those methods of drop-off.

Another variable that can impact first-class postage delivery times are days that the postal service doesn’t operate. Sundays aren’t a working day for the post office. The USPS also observes the long list of federal holidays, which can add to delivery time. Exceptions like severe weather and high-volume seasons like Christmas can also cause delays.

In the UK, first-class mail is an actual delivery time upgrade over second-class and it’s priced likewise. The Royal Mail delivers mail with first-class postage the day after it’s sent — though, like in the US, this isn’t guaranteed.

Overall, you can get a lot more detailed information about prices, regulations and dimensions on first-class mail from the USPS here and here.

Stamp Price Increase — How to Prepare for the New Price of a Stamp

On January 27th, 2013, the US postal service will officially enact a brand new stamp price: 46 cents for a standard 1-ounce letter. A slew of other new postage increases are also a part of the change and they’re detailed here.

The same exact thing happened this week one year ago — a one-cent increase to the price of a stamp — so it’s pretty certain that every year around mid-January, you’ll have to scramble to take advantage of the imminent change. Make sure you’re not losing out because of the price change!

What You Need to Do Before the Price of a Stamps Goes Up

Stock up on forever stamps: Now’s your last chance to grab forever stamps for the lower price of 45 cents. Forever stamps are always valid for mailing a letter regardless of future postage increases — they’re always good for mailing a standard 1-ounce letter. However, because of the price adjustment, buying a single forever stamp will cost one cent more. A roll of 100 stamps next week will cost a dollar more. If the price of a stamp increases at the same rate, in a decade, that same roll could cost about $10 more. Buying stamps now, especially if you do a lot of mailing, will save some cash and hassle in the long run.

Use up your old stamps: If you still have official 45-cent stamps that aren’t labelled “forever” (most novelty, collectable or themed stamps aren’t forever stamps) you need to use them quickly! Send out your bills early or drop other letters you’ve been procrastinating on in the mail. Even though the price of a stamp officially changes on Sunday, since many corner mailboxes aren’t serviced on Sundays, there’s a short implicit “grace period.” If you can get your mail in the box on Monday, January 28th, it will probably reach its destination — just make sure you’ve listed a return address just in case. So, you’ve got time. If you have any leftover stamps on Monday, you’re still in luck. The USPS offers one-cent stamps which you can also add to the corner of a letter to bring your postage total up to the new 46-cent requirement.

History of the Price of a Stamp

Generations before us, folks paid pennies to send a letter across the country. But times have changed and over the decades, the price of a stamp has ballooned from only a few cents to almost half a dollar. The table below charts the precise stamp price increases and the dates of their introductions. Using the table, you can get an idea of how the price of a stamp has changed over a timeline of over 100 years in the United States.

Before you see the table, you might like to understand the changes it demonstrates. Although it seems like the price of a stamp has risen at an alarming rate, this mostly has to do with inflation. Let’s find out why. The graph below depicts the price of a first class stamp in two different ways: the dark blue section shows the actual price of a stamp as it’s listed in this table against the year the price was in effect; the second shaded section in light blue shows the inflation adjusted price of a stamp using the value of US cents in 2008.

Stamp Price History

The price of a stamp over time compared to its inflation-adjusted price.

This inflation-adjusted graph proves that the price of a stamp has remained surprisingly stable over more than a century. This is because even though the cost of postage was increasing steadily, the value of the US dollar was inflating. That inflation means that the purchasing power of the cent was going down. With the purchasing power falling and the prices going up simultaneously, the net result is a stable stamp price.

Some of the sudden jumps up and down in the graph can just be explained by some of the the earliest stamp price changes. If you look at the table below you can see that since the stamp price was so low, an increase of just a cent means a relative increase of 50% or more. Were it reasonable to change the price of a stamp in increments of partial cents, there would be a less perceptible change in those areas of the graph. So, these changes had less to do with irrational inflation or pricing and more to do with relative changes in price.

Date of Price Change Price of a Stamp in Dollars
03/03/63 .06 (.03 per half ounce)
03/03/83 .04 (.02 per half ounce)
07/01/85 0.02
11/03/17 0.03
07/01/19 0.02
07/01/28 0.02
07/06/32 0.03
01/01/52 0.03
08/01/58 0.04
01/07/63 0.05
01/07/68 0.06
05/16/71 0.08
03/02/74 0.10
09/14/75 0.10
12/31/75 0.13
05/29/78 0.15
03/22/81 0.18
11/01/81 0.20
02/17/85 0.22
04/03/88 0.25
02/03/91 0.29
01/01/95 0.32
01/10/99 0.33
01/07/01 0.34
07/01/01 0.34
06/30/02 0.37
01/08/06 0.39
05/14/07 0.41
05/12/08 0.42
05/11/09 0.44
04/17/11 0.44
01/22/12 0.45
01/27/13 0.46

Here’s just one of many excellent resources on the stamp price’s history and its changes relative to inflation.

New Price of a Stamp 2013 Starts Tonight!

A stamp price change is imminent! Tomorrow, the price of a stamp will rise one cent to 46 cents.

This is why I made Price of a Stamp — the stamp price changes every once in a while and it’s an easy number to forget. So that’s why the homepage is always accurate and up to date. Tonight will be no exception! The stamp price is always correct on Price of a Stamp so you don’t have to remember it.

Postage Increases — Why the Price of a Stamp Keeps Rising

Nearly every year since the 1990s, the US stamp price has risen steadily. While the differences are basically nominal — only a few cents — the yearly changes cause an uproar because of their logistical impacts on companies that depend on sending mail as a part of their business. Even though the price of a stamp’s frequent rise is controversial, it is necessary to keep the USPS running and in fact, it barely rises enough to meet the US postal service’s costs.

One of the main reasons the price of a stamp rises in such small increments so regularly is because the US postal service’s price hikes are regulated heavily by the US government. An independent part of the executive branch regulates the price. It’s called the Postal Regulatory Commission and its sole purpose is to regulate the Postal Service. It was created in the 1970s by the Postal Reorganization Act of 1970 and then restructured by the Postal Accountability and Enhancement Act of 2006. The act and the commission enforce what’s effectively a price cap on postage rates. This has forced the postage stamp’s price history to basically track with inflation over the years. The USPS can only increase the price of a stamp as much as the dollar has inflated over the past 12 months.

The problem with forcing the postal service to bind its stamp price to inflation is that it ignores the realities of the mail and shipping business today. The Postal Service can no longer cover its costs because profit margins are limited by the caps — and those profits can’t come back to cover the USPS’s overhead in other areas of the business. For instance, if inflation is low and mail volume decreases (and it currently is) then the USPS can’t increase the US stamp’s cost to balance the expenses associated with lower demand. An ordinary private business could increase its prices to deal with lower demand. In fact, the USPS can easily demonstrate that these increases don’t cover their overhead for several products. Competitors like email, electronic bill pay and other private companies mean that mail volume is decreasing, so the USPS will continue to loose money under the strict price cap of the Postal Regulatory Commission.

Another reality for the Postal service is the cost of fuel. Fuel and gas is one of the Postal Service’s largest costs since they depend on an enormous network of trucks and planes to shuffle mail all over the world. Fuel prices are rising more quickly than inflation so the economics here can’t work out for the USPS as a business.

In spite of all of these facts, the USPS is still regulated by the Postal Regulatory Commission and prevented from increasing the price of a stamp enough to cover its costs. Even though the historical timeline of the Postal Service’s increases frustrate consumers and businesses, the regulations according to inflation are outrageously restrictive and keep the US post office from running a stable business. Every year, in spite of postage stamp price increases, the USPS loses billions of dollars.

Stamp Price 2013 — New Postage Rates

The 2013 stamp price will be 46 cents in January — a new postage rate and an increase of one cent compared to the current price of a stamp. The postal service also announced a number of other postage increases and new services coming in 2013.

The USPS receives no tax dollars to operate so these increases to the price of a stamp are the only way the USPS can continue to pay for its operating expenses. Additionally, the postal service isn’t allowed to increase the price of a stamp more than the rate of inflation — even while enormous costs mount with Americans using the internet to pay bills and communicate — causing the postal service to lose a projected $15 billion.

The USPS has asked for a special postage rate increase of 5 cents but Congress hasn’t followed through. $15 billion reaches the USPS’s borrowing limit, after which they have to operate solely off of sales and other new products.

Other new postage rates and services in 2013:

  • There’s a new “First Class Mail Global Forever Stamp” which will deliver a letter weighing about 1 ounce anywhere in the world for $1.10. This is unique since the current international price of a stamp varies depending on the country you’re sending to.
  • Parcel Post (now called “Standard Post”) and Priority Mail will include free tracking and delivery information, though they will also experience a postage increase which depends on an item’s size.
  • First Class Mail International (now called “First Class Package Service International”) is eligible for discounts online and commercial pricing but also has a significant postage rate increase, which depends on weight
  • Flat rate packaging, which is free to customers who pay for the service, can now request expedited delivery for a fee of $2.50

Some other details surrounding 2013 stamp prices are in the USPS’s official press release on the matter.

The new postage rates and price of a stamp will become effective January 27th, 2013. The new products will be released in January.