May 12, 2009, - 11:03 am

Selling Forever This Way is a Loser: Post Office Stupidity Continues

By Debbie Schlussel
So, yesterday, the price of a First-Class stamp went up two cents to 44 cents. Makes me feel old that I remember when stamps were ten cents.
But, despite the price increase, the United States Postal Service continues to decline and lose money. And it’s not just the internet, faxes, and scans over e-mails that are putting it out of business.
It’s horrible mismanagement by USPS brass, at the expense of the mailman. And it’s not just the absurd six-figure bonuses and perks the top Postal execs, including Postmaster General John E. Potter, awarded themselves.
In my view, one of the Post Office’s biggest missed opportunities and biggest loss centers is the Forever Stamp. It’s the only stamp I buy anymore, and the USPS is selling tons of them.

foreverstamp.jpg

Selling forever @ Current Market Rates is a Loser

But every time they sell one, it’s a loser. I have the Forever stamps I bought for 42 cents, the same price as any First-Class stamp at the time I bought them, and now they are worth 44 cents. I’m gaining value, and the Post Office is losing value . . . without charging a premium for that assured gain in value. People are stocking up on and hoarding the Forever stamp, diluting the full value to the Post Office of a stamp price increase like yesterday’s.
And yet, the Post Office doesn’t charge a premium for the extra value of the Forever stamp–the fact that, unlike currently-priced First-Class stamps, it will never lose value and will always be good for full First-Class. It’s like a company issuing a never expiring coupon to buy a good at a pre-inflationary price from several years ago. Companies don’t even issue non-expiring coupons for a few cents off anymore. On the contrary, they’ve moved up expiration dates, because the longer a coupon is good, the longer they lose money.
So, if they were smart at the USPS–and that’s not seemed to be the case–they’d charge one cent over the current price for a Forever stamp. I’d pay it, because I’d know that those stamps would last me past all future price increase, so it would be worth the investment. And if I wouldn’t pay it, the Post Office still wouldn’t lose money on me because I’d pay the current price on current First-Class stamps, which is the same price as the Forever Stamps, right now.
But don’t expect the Postal Service to get wise. That’s part of why the quasi-governmental, regulated service is losing and dying faster than it should. They’re giving away value–like the future value of a Forever Stamp–without harvesting that value in any way.
And it’s running a business that way–not like a business–that will be the death of the Postal Service.
They’re already considering canceling Saturday delivery to save money. But just think if they charged 1 cent extra per Forever Stamp. I’d bet they could cover the cost of Saturday delivery or at least a good chunk of it.
It’s simply brainless to sell a forever-lasting First-Class stamp at the same price as the current price for First-Class postage. And that’s why we all keep buying them in droves.
And part of why the Post Office’s death is being sped up.
Selling Forever at non-forever prices is a loser.

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7 Responses

[So, if they were smart at the USPS–and that’s not seemed to be the case–they’d charge one cent over the current price for a Forever stamp.]
Shhh.. Debbie, don’t ruin a good thing!;)
[It’s simply brainless to sell a forever-lasting First-Class stamp at the same price as the current price for First-Class postage. And that’s why we all keep buying them in droves.]
It’s not brainless. They get the cash now and most people will have to buy stamps now or eventually later.

Norman Blitzer on May 12, 2009 at 11:40 am

These are the same yahoos that will be running National Health Care.
“Be afraid….very afraid.”

SamAdams on May 12, 2009 at 12:47 pm

I disagree. They have “use” of your money until you use the stamp. The price increase they are not collecting is less than 5%, which means any losses are negligible and they may in fact be making money. This is elementary finance as taught in any MBA program.
The fact of the matter is that the post office will never operate efficiently as long as they charge everyone the same price low price (at least relatively) no matter where they live and where they are sending stuff and everyone has the same expectation of daily delivery no matter where they live.
If FedEx or the other competitors had to operate the way the Post Office is required to they would be just as bad off.

i_am_me on May 12, 2009 at 2:17 pm

The forever stamp is for regular people and small business who don’t do a lot of mailing. Bigger companies are using postal meter machines, there is no “forever” meter, so they can’t horde, buy early and take advantage of it.
There are still people using .34 stamps, they claim “oh I didn’t realize” but they think they will get away with it. Most don’t, they don’t realize that whoever they sent that letter to has to pay the difference.
Then they try the no return address with low or even no postage. If not accepted and paid for at the delivery point it goes to the dead letter bin.
Mismanagement is what is going to kill the post office. It used to be called the Postal Service but service has pretty much gone away. They claim mail volume is down but are spending hundreds of millions of dollars for new machines to sort mail. They want to do this so they can fire the help.
Currently a carrier spends approx 2 hours in the office and 6 hours on the street (total 8 hours). So they feel with these new sorter machines to cut the office time by at least an hour or more and have the carrier on the street longer. More like 1 hour office and 7 hour street.
This will require routes to be redesigned, cut and move deliveries from one to another. Now you can fire 20% of your workforce. Management see’s this as a win. But they fail to see the whole employee on the street longer is more apt for problems. Traffic accidents, personal injury, like heat or cold injuries and don’t get me started on the dogs. So the people who actual carry the mail will be carrying more. a lot more.
Now the best part. Toss in some injuries and vacations and those routes have to be split up and carried by someone else. So you, the carrier do your 8 hours on your route and then go do an hour or more on another route, that you may not even know. Getting dark, people are complaining the mails late, that business closed and didn’t get their mail. But none of that is a problem because they no longer care about service.
None of that is as bad as the contracting out or privatizing of routes. Management wants to fire the city carrier and then hire someone to deliver that route. They do this now in some areas. In one area they guy won the bid for the route and then sub leased it to 2 other guys. One of them decided he didn’t like the job so he just left the mail and told the guy he quit. Another guy won a route bid, then refused to actually deliver all the mail, just what he thought was important.
My favorite guy was the one they followed to Home Depot and picked up a couple of guys. He gave them the mail and dropped them off at the end of the street and waited at the other end for them.
So who is actually delivering your mail? Do you even know?
Just remember it is people who have never actually touched the mail making these decisions. All the carriers are doing is what they are told so they don’t get fired. No matter how stupid the order.
after all, it was the post office that came out with a muslim stamp at Christmas.

ender on May 12, 2009 at 10:19 pm

I kind of disagree. I couldn’t crunch the numbers but if the post office has to spend more money on printing and servicing one cent stamps how much do they profit off the one cent stamp. I would suppose not much. The profit margin would be minimal on all the people that have 42 cent stamps and need to add 2 more one cent stamps. So as a consumer you feel you got a deal and the post office feels they can raise the price and not feel guilty about it because they can say just buy the forever stamps. Also if they charged one cent extra for the forever stamp, then can it really be called a forever stamp? And I think the Post Office, contrary to many is actually a good deal. But this is just my opinion.

californiascreaming on May 12, 2009 at 11:01 pm

I remember the 4 cent stamp, although I was a little kid.
What a better place America was. John Wayne, Howdy Doody and love for the country of our birth. God, I miss that America.

interestinconundrum on May 13, 2009 at 10:44 am

I must be getting old. I remember when first class stamps were 3 cents and letters posted this afternoon were delivered tomorrow morning, but then everyone working at the post office was’t a “tokens”.

Burt on May 14, 2009 at 12:07 pm

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