USPS Rate Hike: The Forever Stamp

The USPS wants to raise the rate of first-class stamps $.02 to $.41, and while they’re at it, they’d like to introduce the “Forever Stamp.” From BusinessWeek:

A new “forever” stamp — good for mailing a letter no matter how much rates go up — was recommended Monday by the independent Postal Regulatory Commission. A forever stamp would not carry a denomination, but would sell for whatever the first-class rate was at the time.

For example, if the 41-cent rate takes effect, forever stamps would sell for 41 cents. If rates later climbed to 45 cents or more, the price of the forever stamp would also go up at the counter or machine, but those purchased before the change would still be valid to mail a letter.

Sounds like a good idea, but we wonder if it wouldn’t make the USPS more cavalier about raising postage rates…—MEGHANN MARCO

Postal panel wants 2-cent stamp hike [BusinessWeek]
(Photo:Maulleigh)

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  1. adamondi says:

    This is not a new thing at all. I have a whole sheet of stamps at home that don’t say a monetary value on the front. Instead, they say “FIRST CLASS” where the normal cent value would go. The Postal Service has been doing this since at least 1999, in my experience.

  2. karmaghost says:

    @adamondi: I have the exact same kind of stamps at home and was wondering what would happen with them if the rate went up. Short of saying “oh, those are the American Flag First Class stamps, we don’t make them anymore and I know you paid $.39 for them,” I don’t know how they’d determine whether I could use them or not.

  3. Falconfire says:

    Yes but they only count for a transition, use them later and they ARE sent back as postage due (they have machines who read the stamp and kick them out once it goes past a year or two.)

    That being said, I know a lot of places the USPS could cut back so as to not raise the rates, but they couldnt bare to lose the things they take as perks.

  4. adamondi says:

    @Falconfire: The ones I have were stamps that I bought from my ATM. There was no transition going on at the time. They simply say “FIRST CLASS” and I have never had one returned to me for unacceptable postage. I just recently found a whole sheet (that was bought more than two years ago) in a stack of papers and the stamps still work fine.

  5. timmus says:

    Interesting graph on postage vs. inflation.

  6. dohtem says:

    I usually get the breast cancer stamps, they cost a wee bit more (3c per stamp more iirc) but the never expire and that extra money goes to a good cause.

    Yay for health lucious breasts!

  7. muddgirl says:

    @adamondi: I have the same stamps! Maybe I’ll hold on to one for awhile and see if it’s still useable.

    @timmus: So, the price of stamps is a pretty good first-order approximation for M3 money levels!

  8. TPIRman says:

    Contrary to previous commenters, this is indeed a new thing. The non-denominational stamps that just say “FIRST CLASS” were printed in advance because USPS didn’t know what the new rate was going to be, but they wanted to have plenty of stamps to sell. This has been standard practice for some time in advance of rate hikes. You might remember older stamps that sported a letter “G,” for instance. Those were printed in expectation of the “G” rate revision, naturally.

    Anyway, the point is that these non-denominational stamps retain their initial value even if the first-class rate increases. A 39-cent stamp that says “FIRST CLASS” is only going to be worth 39 cents. Here’s a USPS document that outlines the actual value of non-denominational stamps.

    The new “forever” stamps will increase in value whenever the postal rate goes up.

    You got away with using the old “FIRST CLASS” stamps, adamondi, because the post office delivers letters with insufficient postage. Underpaid letters are supposed to be marked “postage due,” with the difference being paid by the recipient. But often, marginally underpaid letters are just delivered anyway. This is why you haven’t had any trouble so far.

  9. TedSez says:

    As with store gift cards and airline miles, they’re expecting that a lot of customers will acquire them and not use them…. In this case, because they’re waiting for the next rate hike. So that’s free money for the Post Office.

    Of course, what will happen a few years from now is that they’ll realize, “Uh-oh, there are millions of dollars worth of those stamps out there with no expiration date, and they could be used at any time without us getting any more revenue. We’d better raise our first-class rate by double the usual amount this time around, just in case.”

  10. TPIRman says:

    @dohtem: Didn’t see your comment until after I posted mine, but the breast-cancer stamps are also worth only 39 cents regardless of future rate hikes. (See the USPS page I linked to above.)

  11. TedSez says:

    P.S. Yes, I realize that holding on to the stamps over a long period of time would cause people to lose money versus inflation. But I bet they’ll do it anyway.

  12. k8supergrover says:

    They’re doing it in canada, it’s called the permenant. Seems to work pretty well up here :)

    oh, and it’s currently 52 cents to send a letter within canada. Enjoy your postal rates, america.

  13. krunk4ever says:

    One thing I’m not sure that most people know about is that you can buy stamps at supermarkets. With a 5% cash back credit card, you can also get 5% back on stamp purchases contrary to the 1% you get back from the post office.

    //krunk (^_^x)

  14. Firstborn Dragon says:

    Canada Post just started doing this up here. Given they up the price by a couple of cents every January, I’m not sure if it will last or not.

    Then again, they make up with the price of package shipping. Which is a fortune up here.

  15. VG10 says:

    why not just make it 50 cents and leave the cost alone for like 10 years.

  16. faust1200 says:

    I’m curious as to why USPS doing this. I’m guessing it is a consolation prize we get with the rate increase. I’m not an economist but I think USPS is going to shoot themselves in the foot with this. I suppose the USPS could always discontinue the “forever” stamp if they need to. I just don’t trust anyone when they say “forever” especially the gov’t.

  17. clbarrientos says:

    I have been a victim of USPS rate hikes…on my hand I am holding Chinese New Year’s Stamps book they cost me $.37 each stamp, now I have to place 2X$.37 stamps just to make sure my San Francisco ‘wheels not straight’ $35 parking ticket and my rent do not get returned and I get charged extra fees for lateness…two letters $1.48 instead of paying $.39 X 2 =$.78; How many people like me need to do this? I think USPS is getting high on my free money.

  18. Greasy Thumb Guzik says:

    @krunk4ever:
    You can buy a roll of 100 37¢ at Costco for $36.75 a savings of a whole 25¢!

  19. Greasy Thumb Guzik says:

    And what I meant was You can buy a roll of 100 39¢ at Costco for $38.75 a savings of a whole 25¢!
    Dumb, dumb brain freeze dumb!

  20. Adam Fields says:

    I don’t understand the point behind the “Forever Stamp”. Couldn’t the post office simply honor older stamps, and thus make those stamps equivalent to whatever the current rate is, regardless of the printed value?

    If they’re not going to charge a different rate for it when you buy it, why differentiate it from a numbered denominational stamp?

    To put it another way, if you’re going to mail a letter with a stamp you purchased when the price was 41 cents, and the Post Office is going to deliver it even if rates have gone up to 45 cents, what difference does it make if the stamp says “41 cents” or “Forever Stamp” on it?

  21. CyGuy says:

    I beg to differ with Johny regarding Breast Cancer stamps. While they are shown in the table of displaying examples of the stamps, they aren’t listed in the table of “Nondenomination Stamp Values”. That it says $.39 next to them is just a coincidence, as that is what they cost when first issued. But I believe they cost a bit more now ($.45 currently, with a proposed hike to $.55 per https://hdusps.esecurecare.net/cgi-bin/hdusps.cfg/php/enduser/prnt_adp.php?p_faqid=7676&p_sid=BA97fgvi ).

    As the stamp has not changed since its original issuance AND it is still being sold currently, it MUST be treated the same (i.e. valued at full First Class postage) regardless of whether you are using one from 1998, or one bought today. I have on several occasions asked postal workers if this was the case and been told it was. Thus I always choose to buy them – both to support the charitable cause, and to fend off the need for make-up postage after a rate change.

    Of course, at any time they could alter the stamp and thus freeze its value but they haven’t chosen to yet since 1998.

  22. DutchFlat says:

    FUCK THE USPS. I bought a record on eBay. It was properly packaged. USPS delivered it pretty much folded in half. It was a very rare fifty-dollar record. I took it to the post office. They said: “No insurance? Tough shit, Bucko!”
    UPS insures everything up to $100. I assumed USPS undertook SOME responsibility.
    No, they take your money, and then they fuck you. If you want what you are mailing to arrive safe-and-sound, you have to pay extra.
    Only the government. Well, the USPS tells me they work this way because the government makes them do it.
    How’s this sound: you get an estimate to have a new roof put on your house: $10,000. But, if you want to be “insured” against it leaking, it’s $14,000. What kind of crap is that? Well, that’s your USPS at work.
    Wouldn’t you love to run a busiiness where you could collect hefty fees for services, fail to fulfill the service, keep the money you collected, and then tell the customer to go fuck himself?
    DO NOT USE USPS. Ship UPS, or FedEx, or whatever.
    Or, do use USPS. But, the first thing you’d better order is vaseline. No, buy that locally; if the USPS has to deliver it, it’ll come broken for sure. What a mess that’ll be. And, they won’t pay for it.

  23. Kevin_b_er says:

    The USPS has a mandate to be revenue-neutral. They can’t really make a long-term profit. So they can’t raise rate whenever they feel like it. Their price is only determined by what they need to not run a massive deficit. Unlike normal corporations, they can’t just raise rates. The last two years or so, they’ve made profit, but its mostly gone into paying a couple decades of debt. The stamp is just to make it easier to avoid the pains. Its far from an attempt to just make price hikes easier.

  24. amazon says:

    Canada Post has already introduced this. What I really like about it is the small print on the back of the sheet where CP has “reserved the right to cancel the ‘Permanent Stamp’ program at any time”.

  25. Kierst_thara says:

    The other half of this initiative, (in Canada at least,) is that they aren’t going to print 1 cent stamps any more. Printing and distributing the 1 cent stamps costs Canada Post more than they make on them, so the whole idea is that the ‘forever stamp’ will eliminate the need for such small denominations.

  26. AcidReign says:

    …..This “forever stamp” thing is a stop-gap, ill-advised move that is designed to balance the Postal Service’s books now, and fuck the future. Typical government.

    …..They will either default on the stamps in the future, or need bailing out, or a need a bigger increase. And that’s assuming people actually go out and buy tons of these things. I wouldn’t be surprised if Capital One, MNBA, and all the junk-mailers will be the ones taking the most advantage of this!

  27. tz says:

    These might be a better investment than TIPS. Does postage usually lead or lag the CPI.

    I bet someone could make a lot of money. Just like that guy in the 1920s who noticed he could arbitrage international postage. His name was Ponzi.

  28. synergy says:

    So… if I hear the post office is about to up the rate, I should run out and buy as many stamps as I think I’ll use for the next year right? Or maybe buy a bunch and sell them at the higher rate once it kicks in?

    I know, it’s pennies, but I’m just sayin’.

  29. Eugene says:

    I avoid using the USPS as much as I can anymore. We got tired of finding out mail in our neighbor’s yard or getting a late fee because payment didn’t make it. I had to sign up for internet banking back when we had to pay for it to keep from mailing utility payments.

  30. nelsonj1998 says:

    I don’t understand why people complain about postage rates. If you don’t like the price, then find somebody else who will come to your house, pick up a letter, and deliver it to a doorstep on the other side of the country for less than 41 pennies.

  31. Dustin L. says:

    @karmaghost: I think the more important question is how the consumer is supposed to know the value of a stamp with no monetary value printed on it. I found a book of “first class” stamps while going through some old papers. I have no idea what I payed for them.

  32. TPIRman says:

    @CyGuy: Coming back to this a little late but I remember the thread and wondered if people had more questions. You are correct, mostly. I should have been a little more clear. The value of the breast-cancer stamp has been adjusted by the USPS over its lifetime. It originally cost 40 cents (not 39 cents) for 32 cents of postage value.

    However, it’s not a “forever” stamp because there’s no guarantee that they will keep raising the stamp’s postage value. When you buy the stamp now, you are guaranteed 39 cents worth of postage, that’s it. If they raise the rates, there is no promise that the breast-cancer stamp will go up in value. They may choose once again to increase the postage value of the stamp; they may not — they could release a redesigned breast-cancer stamp, for instance.

    Just saying that you shouldn’t assume that the breast-cancer stamp or other semi-postal (they’re called that because part of the purchase price goes to a cause other than the post office) stamps will automatically go up in value over time. The breast-cancer stamp has done so at the post office’s discretion. That said, even if the USPS doesn’t bump up the postage on these stamps, as I mentioned above, there is a strong likelihood that your letter will be delivered anyway. So you can enjoy the thrill of saving 2 cents.