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Still Use Snail Mail? Prepare for a Price Increase in May

This article was written by in Consumer. 8 comments.


In all likelihood, this will be a yearly reminder. The US Postal Service is no longer required to go through a lengthy approval process to raise postage rates if the increase is below the “inflation rate.” That presents a good chance that each May, we will be required to pay about one cent more for sending a letter.

In May 2008, the rate for mailing a standard letter will increase from $0.41 to $0.42. The “forever stamps” purchased at $0.41 will still be valid, however. So if you’re crazy enough to stock up to “beat the price increase” and use inflation to your advantage, then start hoarding stamps now.

This won’t affect most of the people I know. E-mail has been the main form of communication for me for 18 years or so. USPS hasn’t yet announced the increase for Express Mail and Priority Mail, most likely my only use for the postal service.

Snail mail gets more expensive [CNN Money]

Published or updated February 11, 2008. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Luke Landes, also known as Flexo, is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about him and follow Luke Landes on Twitter. View all articles by .

{ 8 comments… read them below or add one }

avatar SingleGuyMoney

Just another reason I am glad I use my banks free billpay feature to pay my bills.

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avatar Lily

I dunno if it’d be smart to hoard Forever stamps. To me, it seems like the equivalent of keeping cash under a mattress. Sure, you avoid inflation on stamps. But if you spent $1,000 buying Forever stamps, couldn’t you have done better by forgoing the stamps and putting $1,000 into any sort of an account (high yield savings, CDs, or the stock or bond market) that would likely earn a return higher than the inflation rate?

Of course, it’s probably equally costly (for the nation as a whole) to keep reprinting stamps for the correct denomination (or to manufacture a bunch of 1-cent stamps).

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avatar Fred

@ Lily:

No, it’s not smart to hoard Forever stamps. Slate.com has a longer explanation here: http://www.slate.com/id/2166475/

Poor ROI aside, the Forever stamps work out well for me. I pay all my bills automatically (like the majority of the readers here, I’d imagine), but still end up having to send about…I dunno, six to ten?…pieces of snail mail a year (not counting Christmas cards). So if I have a book of 20 value-denominated stamps, I’d always be scrambling for the penny stamps to paste all over the envelope whenever my next opportunity to use the USPS arises.

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avatar KC

Forever stamps are also good for autograph collectors. I know people who collect autographed sports cards through the mail. They always send a SASE (self addressed stamped envelope) with the card they are requesting to be signed. This way if a player or celebrity is slow answering their mail the stamps will still be good. When I used to do this some players would take years to respond – even after a rate increase.

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avatar Adfecto

Other commenters have touched on the topic but:

A quick bit of research reveals that the price of postage has not kept pace with inflation over time. Forever stamps are not a valid investment class. Buy TIPS if you are worried about inflation! If you want to drop something in the mail, buy stamps.

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avatar PT

Flexo,

I just saw this too. Seems the post office can’t find anymore ways to cut costs, only raise the prices. But I agree, who does this really effect since most have moved towards free bill pay and other forms of communication. I just wish whenever they made these increases the lines would get shorter and the employees would get nicer at the post office.

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avatar RacerX

This is such a vicious circle.

Postal rates are going up due to way to much capacity. People continue to do more and more electronically. eBill paying is on the rise and less and less traditional mail is being spent. They try to hit the 3rd class customer (catalogs) with the brunt of the hit, so those costs rise and lead catalog to cut circulation. All of which leads to lower demand which…

The hording isn’t a good idea because even if you assume an even increase now and forever (2.4%) you could earn a bunch more in a high-yield savings account. Now it could make sense to buy 90-days ahead. That gives you the equivilant of a 10% return.

Gosh I need a life :)

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avatar thomas

I love hearing stories about people buying hundreds of dollars worth of forever stamps. I guess they go good in xmas stockings.

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