PRICEY POSTAGE: In anticipation of today’s postage stamp increase, many people are stocking up on the U.S. Postal Service’s (USPS) “Forever Stamps.”

USPS will increase the price of first-class stamps by another penny, or 2.4%. It says it needs the increase to keep up with the inflating economy and to cover its rising business costs. To ease the pinch for consumers, post offices are selling Forever Stamps at 42 cents that can be used forever, no matter the cost of postage. (Up until yesterday at midnight the stamps cost 41 cents.)

Forever Stamps: Get ’em While They’re Hot

USPS offers Forever Stamps to provide some relief for the continually rising cost of stamps. Forever Stamps are valid for first-class postage despite the rate. So let’s say you bought a Forever Stamp at 41 cents last week, and next year postage goes up to 46 cents. Your Forever Stamps will still work.

Consumers bought an average of 30 million Forever Stamps—a total of more than 6 billion—since they became available in 2007.

The Pump is Bad Enough—Now We Have to Pay More at the P.O.?

The Postal Service is a quasi-government agency. A law enables it to adjust its pricing annually as long as it doesn’t exceed the inflation rate. Here’s how the national economy has impacted the Postal Service:

• Typically, the housing and credit industries produce lots of economic flow…and lots of mail.
• The current economic slowdown weakened the housing and credit markets. Now they’re sending less mail through the postal service.
• On top of the slowdown in large-market business, the Postal Service still has to compete with non-governmental mail carriers like FedEx and UPS.
• The rising cost of fuel affects USPS as well, since it uses 219,000 vehicles to deliver mail. “For every penny that gasoline goes up, it costs the Postal Service $8 million extra a year,” said Mike Cannone, a San Diego Postal Service spokesman. (San Diego Union-Tribune, 5/11/08)
• Like any other business, the USPS must also cover employee salaries and benefits.
• In response to all of the above, business costs for the Postal Service have gone up.

Copyright © 2010 Informify

Sources

U.S. first-class-mail rate to rise 1 cent to 42 cents (MarketWatch, 5/11/08)

Forever stamp popular as prices increase (Hattiesburg American, 5/11/08)

One cent stamps free (Tahoe Bonanza, 5/11/08)

Postal Service refuses to be licked (San Diego Union-Tribune, 5/11/08)

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