Price of a Stamp Increases by Two Cents — Forever Stamp Value Going Up

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.

Here’s a summary of the recent changes:

  • As of January 22nd, 2017: 49 cents per stamp
  • As of April 10th, 2016: 47 cents per stamp
  • As of May 31st, 2015: 49 cents per stamp

The last time our stamp price was 49 cents was considered an “exigent” increase permitted by regulatory agencies largely due to the U.S. economic recession. We’ve explained the larger history of stamp prices in a previous post.

Why is the price of a stamp changing so much?

Forever stamp increased to 49 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.

Stamp Price Increase — Why the Change in Postage Prices?

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.

USPS Corner MailboxesFor 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…

2014 Stamp Price — How Much is it Going Up? When’s the Change?

If you’re following USPS news and the price of a stamp closely, you’d know that the first class rate for postage stamps is rising this year. But even the Postal Service is making it hard to answer the two most fundamental questions: By how much is the price of a stamp increasing? And when is this all happening?

The simplest answer is: 49 cents and January 26th, 2014. That’s not all — so read on.

The Stamp Price Increase

The new price for a first class stamp will be 49 cents. That’s a never-before-seen 6% increase to the old price which was only 46 cents. It might not seem like that much of a hike but for a rate that businesses depend on, it’s huge. If the USPS were following the convention typically enforced by the Postal Regulatory Commission, the price would only go up by 1 cent. The real change is 3 cents. So, relative to expectations, the new price is a 300% rate surprise!

20140113-154122.jpg

Forever stamps will increase in value when the price of a stamp changes this year.

Don’t forget that the USPS has already helped us deal with its constant price changes by selling Forever stamps. If you own Forever stamps (or buy them before the price changes!), their value will automatically rise with the price increase. However, if you go to the post office even just the day after the price increase to buy Forever stamps, you’ll pay the new price of a stamp: 49 cents.

When the Price Changes

The price of a stamp increases to 49 cents on Jan. 26th, 2014 according to the USPS, but what does that really mean? Jan. 26 is a Sunday — very few corner mailboxes are serviced on Sundays and nearly every single post office is closed. The postal service doesn’t even deliver mail on Sundays.

The USPS’s wording suggests that the new 49-cent price takes effect on January 26th, so we can assume that the actual change takes place at midnight or close-of-business on Saturday, Jan. 25th. In other words, if you drop something in the mail on or after Jan. 26th, you should plan to apply postage valued at the new price: 49 cents. Or, if you buy stamps at a kiosk or at a post office that’s open on Sunday, you’ll get charged the new price of a stamp.

However, we know from past price increases that the USPS permits a very unofficial “grace period” where it will continue to deliver mail stamped for the old postage price. If you’re lucky, this will last all day Sunday, Jan. 26th. On Monday, Jan. 27th, be sure that all of your mail has 49 cents of postage attached or it might be returned or discarded.

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.

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.