Etcetera

Get Your Postage Stamps Now!

skeeter1.

Posted to Etcetera on Fri Feb 15, 2008 at 07:18:33 AM EST (promoted by port1080). RSS.

The US post office is raising the price of mail once again.

Yes, it's only a penny this time, but why not get some forever stamps now? (Slate says why not!)  I stocked up on a hundred.

I don't particularly like the USPS, but have to use it sometimes.  That old bologna about "Neither snow, nor rain..." is BS where I live.  If the weather isn't perfect, I don't get mail.

While the USPS is required to be self-supporting (it doesn't receive any money from the US government), it does have a statutory monopoly on the delivery of letter mail, so don't expect competition to drive the prices down any time soon (although, it's not certain that it would anyway - US first class mail service and rates compare pretty favorably to the rest of the world, in many cases).

How do you feel about the US Postal Service (or Canadapost, or whoever your local mail provider is?). Are you stuck under a government monopoly? Do you feel you're getting a reasonable amount of bang for your buck?

Tags: edited by Port1080, written by skeeter1, USPS, mail, rates (all tags)

This story: 20 comments (5 from subqueue)
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1

Awkward!

pO157.

Fri Feb 15, 2008 at 07:27:08 AM EST

4.00 (interesting)

I had to go to our local late night USPS Air Mail facility to drop off our 8453-OL because H&R Block recommends sending it certified. I talked to the guy at the counter who commented that why didn't I trust the IRS? I explained how H&R Block wanted the form sent in via certified mail because the IRS lost too many last year.

The mail clerk told me how he sent in his tax returns this year 100% electronically, which is a good thing because he doesn't know where his wife is to sign the forms. hasn't seen her in months. He then started telling various details me about how last time he hears she was in Vegas "having fun without me." I noticed he was conspicuously not wearing a wedding ring.

I backed away from the counter slowly.

Oh, and on topic: I bought 40 forever stamps to stock up. I saved 40¢. Ka-Ching!

Spread it on!

6

^ 1

Chatty Postal workers

postillion.

Fri Feb 15, 2008 at 08:09:01 PM EST

4.00 (informative)

I was just talking about the chattiness of postal workers with a friend when we went to the post office to drop off an envelope.

It seems that only a few years ago, all USPS clerks did was grunt at me whenever I went to do anything there.

Now, I wonder if they are all required to go through some customer service training because I get asked things like: "Would you like some stamps with that?"  "Any insurance, certified mail, return receipt needed?"

I swear none of this used to happen 5 years ago.

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Re: Chatty Postal workers

port1080.

Fri Feb 15, 2008 at 08:37:09 PM EST

5.00 (informative, informative, informative)

Now, I wonder if they are all required to go through some customer service training because I get asked things like: "Would you like some stamps with that?" "Any insurance, certified mail, return receipt needed?"

Yes, totally - it's all about the up-sell now. Insurance, certified mail, and return receipt are all big profit centers for the P.O. as well - all those added services barely cost more than just regular delivery, so they all end up being a significant markup. USPS insurance is a huge ripoff - companies like U-PIC will insure your USPS packages for less than half of what the USPS charges, and yet they still make money on it - so clearly the USPS could charge much lower rates than it actually does. They also like to push as many stamps on you as they can, because, well, people lose stamps (that's money that you pay the PO for a delivery they never make - how great is that!), and even if they don't lose them, if you buy more stamps than you need it's basically as if you're loaning the post office that amount of money, until you actually stick the stamps on something and mail them out. The PO sells far more in stamp postage each year than it receives back on mailed parcels (stamp collectors contribute to this as well, of course). All in all, it's a win-win for the PO.

The increased emphasis on retail has also come as the post office has gone through successive rounds of belt tightening as the increased use of e-mail and online bill payments has drastically cut down the amount of first class mail being sent. First class mail used to be the #1 revenue earner for the post office, but now it's slowly sliding down on the list. The biggest earner now is bulk mail (junk mail). This is one reason we should all be happy to get junk mail - it helps keep the rates of FCM down, as the profits from that subsidize some of the other rate classes.

Back when I was selling a lot on eBay I spent far too much time mailing parcels out of my local post office, and got to know the local post master really well. She was constantly being pressured to increase her sales and cut down on her costs to help keep the PO within budget. The USPS is completely self-supporting now - it gets no taxpayer subsidies - so if revenues go down, costs have to go down too, somehow (which is difficult, since the USPS still has a universal service mandate - they can't just cut back service in unprofitable areas like UPS or FedEx can). On thing they've also done is to really cut down on the pension benefits and other perks that postal employees used to get, as well as pushed a lot of old-timers into early retirement so they can hire younger, cheaper workers at lower pay grades. They've also moved to sub-contracting out a lot of rural delivery to private contractors (rather than hiring people directly) to further cut down costs.

A few tips and tricks for mailing with the USPS. First off - if you're sending a parcel, send it by Priority Mail. Priority Mail is usually only a little bit more expensive than Parcel Post if your recipient is close, and if your recipient is far away, Parcel Post will probably take two or three weeks for delivery (if the item doesn't get lost). Priority Mail is just plain more reliable and it's really the way to go. Finally, if you ship Priority Mail, you can get free boxes and mailers. That said, if your item is light enough, send it First Class Mail instead of Priority Mail. The deliver times are almost exactly the same (both Priority and FCM are shipped via air for long distances, while Parcel Post always goes on the ground, via truck), but FCM can be up to two or three dollars cheaper. FCM doesn't have to be in letter form - you can ship small boxes that way as well. Finally - if you're selling something on eBay, make sure to get delivery confirmation and insurance (I would recommend U-PIC, but USPS insurance is fine too). That's the only way to protect yourself - if you don't have insurance or proof of delivery, if your buyer says the item wasn't delivered, eBay and PayPal will side with them every time. If you have DC and insurance, then you can at the very least file an insurance claim, and if you're doing that the buyer will be much less likely to mess with you (since it will put them on the hook for insurance fraud, if they're lying and actually did receive the item).

Ce n'est pas une pipe. C'est une signature.

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Re: Chatty Postal workers

thefadd.

Fri Feb 15, 2008 at 09:03:06 PM EST

none

If you get insurance isn't delivery confirmation effectively duplicative?

It is easy to buy small plaster models of what you think life is like.

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Re: Chatty Postal workers

port1080.

Fri Feb 15, 2008 at 10:23:24 PM EST

5.00 (informative, informative)

No, it's not.  Believe it or not, USPS insurance does not provide proof of delivery.  The insurance tags do have barcodes on them, but they're not always scanned when the item is delivered, and in any case, whatever information can be had from those bar codes is only for "internal use" - they won't reveal that information to third parties.  So, if your buyer claims that he or she did not receive the item, your insurance claim is much more likely to be honored if you have paid for delivery confirmation.  If you don't have DC, you're protected against damage to the package, but not necessarily protected against non-delivery (or at the very least, it'll be more difficult to collect than if you have DC).  It's a ripoff, but there it is.  Also, eBay and PayPal will not accept insurance as proof of delivery - so if someone files a complaint against you, you really need a delivery confirmation number (or even better yet, signature confirmation).  If it bothers you, ship by UPS, DHL or FedEx - they're held partially liable by law (a law which the USPS is exempted from, actually) for their shipments.  They can limit this liability to $100 (and they do), but that means that you effectively have $100 "free" insurance on your shipment.  Plus, they all have much more effective online tracking & delivery confirmation than the USPS does (all USPS DC gives you is proof of delivery - it doesn't really allow you to track the package's progress or give you an expected delivery date).

Ce n'est pas une pipe. C'est une signature.

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Re: Chatty Postal workers

thefadd.

Sat Feb 16, 2008 at 02:22:09 AM EST

none

all USPS DC gives you is proof of delivery - it doesn't really allow you to track the package's progress or give you an expected delivery date

You can say that again. I once had a priority package with delivery confirmation take THREE MONTHS to get across the country. Until it gets delivered, the online tracking also says simply "Your package has been accepted at [city where you mailed it]." Moron customer thought that meant it had been delivered to someone else but thankfully paypal actually finally returned their payment to me once the package was successfully delivered THREE MONTHS late. Hey, it happens. At least it got there. I've had some things never arrive.

It is easy to buy small plaster models of what you think life is like.

10

^ 9

Re: Chatty Postal workers

pO157.

Fri Feb 15, 2008 at 10:10:58 PM EST

none

Is it? I was downselled from buying delivery confirmation on a men's watch I had to return for repairs last month. I insured it for market value ($350) and also tried to get delivery confirmation. The woman said to forget it because I would be throwing my money away. Something about a mandatory internal paper trail on all parcels insured above ~$200?

Spread it on!

12

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Re: Chatty Postal workers

port1080.

Fri Feb 15, 2008 at 10:31:48 PM EST

4.00 (informative)

Yeah - that's one caveat I should have added.  If it's insured over a certain amount then DC is more or less redundant.  I believe that they require a signature for delivery for any item over $200 (although that may have changed, it's been about two years since I quit doing heavy mailing).  Also, if you ship it via Express Mail, there's $100 insurance automatically included, plus good online tracking functions.  I'd highly recommend Express Mail for shipping any insurable valuables.  It is important to keep in mind that some valuables aren't insurable (cash, some jewelry - I forget the other items, I'm too lazy to look it up) - those (as well as anything that needs to be insured for more than the standard insurance limit) need to be sent Registered Mail if you want to have any chance of getting your value back if the shipment is lost.  Registered Mail is damn expensive though, and actually a bit slower than most of your other shipping options.

Ce n'est pas une pipe. C'est une signature.

7

^ 6

Re: Chatty Postal workers

thefadd.

Fri Feb 15, 2008 at 08:27:08 PM EST

none

I go to a lot of different post offices somewhat frequently because I occasionally sell things on ebay or need a money order. The friendliness/competence of the clerks varies immensely.

I use the post and don't see much sense in buying the forever stamps. Sadly, though, they have lost a decent amount of my mail just between myself and my landlord whose office is only two towns over, which is rather annoying.

It is easy to buy small plaster models of what you think life is like.

3

reliable post

shane.

Fri Feb 15, 2008 at 02:18:13 PM EST

3.00 (informative)

The post here is pretty good - send a letter to "Shane, V0P1K0, Canada" and I'll probably get it.  

Of course, we only get mail three days a week, due to being so far away from civilization...

2

I love the UK

wetkarma.

Fri Feb 15, 2008 at 08:58:39 AM EST

none

This is a bit OT, but I'd like to say that after living in the UK for closer to a year, I've yet to get any junk mail although I still have my mail forwarded from America.

Evidently it becomes too expensive for the USPS to forward the 'trash' that it is paid by the bulk retailers to push in my mailbox. I've spent serious time while living in the states trying to get those "missing kid", "shopwise" and other assorted junk mail crap from filling my mailbox, now opening the mail is a stress-free experience.

Combined with online payments/billing for nearly every bill (bank routing is much more clearly implemented in the UK), its a mailbox nirvana.

Memory is a strange bell, jubilee and knell.

4

Re: Get your postage stamps now

skeeter1.

Fri Feb 15, 2008 at 03:25:54 PM EST

none

I did indeed read the Slate commentary when it first came out.  AFAIC, the logic is flawed.  If you can get first-class USPS stamps now for 41 cents/ea, that will work just as well as 42 cent stamps come May, or forever after that matter, then why not?  

I might not be the brightest star in the sky, but to me this just makes common sense.

there's only one way to find out...

5

^ 4

Re: Get your postage stamps now

port1080.

Fri Feb 15, 2008 at 04:20:17 PM EST

4.00 (interesting)

It makes sense to stock up for the short term, but it doesn't make sense to stock up for the long term, because eventually inflation will catch up to you.  So, if you buy a bunch of stamps now @41 cents, that's good for maybe a few months, but you have to remember that there's almost always at least a little bit of inflation, and also that you can get better returns by investing your money in a bank.  If you tie up $500 in stamps, that's $500 that's not earning any interest in your savings account.  You're much better off leaving the money in the bank and then buying the stamps as you need them - the stamps will cost a little more, but the extra interest you'll earn will more than make up for it.  So really the only advantage you can gain is in maybe a one or two month window around the time of the change-over.  After that point, you're losing all sorts of potential interest profits.

Ce n'est pas une pipe. C'est une signature.

15

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Re: Get your postage stamps now

eduardo.

Mon Feb 18, 2008 at 03:08:29 PM EST

4.50 (informative, interesting)

f you tie up $500 in stamps, that's $500 that's not earning any interest in your savings account.  You're much better off leaving the money in the bank and then buying the stamps as you need them - the stamps will cost a little more, but the extra interest you'll earn will more than make up for it.  So really the only advantage you can gain is in maybe a one or two month window around the time of the change-over.  After that point, you're losing all sorts of potential interest profits.

That's what I thought too, and I was about to reply to SKeeter with an example, but turns out the math proves you wrong ;)

According to Bankrate.com, the highest-yielding 6 month CD has the nominal annual rate of 3.92%. Since this is not APY, we can simply divide by 2 to get the actual rate of increase for the 6 months = 1.92%

40 cents invested in such a CD will be worth 40 * 1.0192 = 40.768 cents in six months, which will NOT be enough to purchase the 41 cent stamp!

However, longer time horizons stop favoring the stamps. The current 12-month CD rate is 3.5%. Investing 40 cents today would yield 40 * 1.035 = 41.4 cents worth a year from now.

Conclusion - assuming today's CD rates and the stamp cost being constant for a year once it rises to 41 cents, the "forever" stamp is a better investment for the 6 month horizon but a bad investment for the 12 month horizon.

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Re: Get your postage stamps now

eduardo.

Mon Feb 18, 2008 at 03:25:30 PM EST

4.00 (interesting)

Ah crap, I am good at finance but I got the stamp prices wrong. Let's do the math with the correct present and future stamp cost:

6 months:
41 * 1.0192 = 41.7872
Which still means that you're better off buying a stamp today rather than investing in a 6-month CD, as you will not make enough to buy the 42-cent stamp in 6 months.

12 months:
41 * 1.035 = 42.435
It would appear that buying a 12-month CD is preferable to buying the "forever" stamp as it would generate enough to buy a stamp in 12 months and leave .435 of a cent in excess returns.

However it's not as clearcut as it may appear. The investment in the CD generates an interest income  of 1.435. If your Federal tax rate is 28% and pretending there's no State or Local tax, you will only get to keep 1.435 * .72 = 1.0332 of that gain, so the after-tax value of your investment is only 42.0332. It's still enough to buy the stamp in 12 months, but barely so. If you happen to be in the 33% tax bracket and/or have to pay some state and city taxes, your after-tax returns from the 12-month CD will not be enough to purchase the 42 stamp in one year - and that's assuming the stamps don't go up in price within those 12 months.

So after some analysis, it sounds like even those with the ~12 month stamp usage horizon can benefit or at least break even with the "forever" stamp, given today's rates outlook.

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Re: Get your postage stamps now

port1080.

Mon Feb 18, 2008 at 06:06:14 PM EST

none

If your Federal tax rate is 28% and pretending there's no State or Local tax, you will only get to keep 1.435 * .72 = 1.0332 of that gain, so the after-tax value of your investment is only 42.0332. It's still enough to buy the stamp in 12 months, but barely so.

Damn, good point, I forgot about taxes. Still, even with taxes there's going to be a point where the investment potential goes down. I never meant to imply that they weren't a good investment for the short term, just that you should be dropping three or four thousand dollars on stamps right now and expecting that to be a wise choice five years down the road.

Ce n'est pas une pipe. C'est une signature.

18

^ 17

Re: Get your postage stamps now

eduardo.

Mon Feb 18, 2008 at 06:45:05 PM EST

2.50 (funny, astute)

I never meant to imply that they weren't a good investment for the short term, just that you should be dropping three or four thousand dollars on stamps right now and expecting that to be a wise choice five years down the road.

Totally agree. In fact, I was shocked when my own analysis suggested that the "forever" stamp is a good idea under -any- circumstances. But as a good scientist, I must report my findings even when they contradict what I set up to prove.

And I am a damn good scientist.

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Re: Get your postage stamps now

port1080.

Mon Feb 18, 2008 at 06:52:03 PM EST

none

"just that you shouldn't be dropping three or four thousand dollars on stamps right now and expecting that to be a wise choice five years down the road."

Oops

Ce n'est pas une pipe. C'est une signature.

20

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Re: Get your postage stamps now

skeeter1.

Mon Feb 18, 2008 at 07:57:57 PM EST

4.00 (informative)

""just that you shouldn't be dropping three or four thousand dollars on stamps right now and expecting that to be a wise choice five years down the road."

Oops"

No that was never my intention.  I've got a pretty good idea of my consumption rate, and for the short term, like 6 months-1 year, it does make sense to get the number of stamps you need now.  Five year's worth?  That would probably be stupid.  

Oh, and BTW, I've got a bunch of money in mutual funds, and they've been in the shitter lately.  I like to save a buck here, there, wherever, when I can.  

there's only one way to find out...

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Re: Get your postage stamps now

skeeter1.

Sat Feb 16, 2008 at 02:18:59 PM EST

none

"It makes sense to stock up for the short term, but it doesn't make sense to stock up for the long term, because eventually inflation will catch up to you."

I can't disagree with you there.  100 stamps for me is a 6-month supply.  Still, it saves me a couple of bucks.  There's also no telling when the USPS will invalidate the "forever" stamps, and then they'd be useless.  I have no idea who controls that.

Still, for the short term (say, 6-months to a year) it makes sense to pick some up.

there's only one way to find out...

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