Stamps

The Postal Service has come up with the interesting idea of selling a defined service instead of a piece of pseudo-money. The “forever stamp” will be good for a first class letter indefinitely, so when rates go up, you won’t have to find and affix an extra two- or three-cent stamp. [Please note that I am not making the obvious joke about the name of this stamp actually referring to the time it will take to get your letter delivered. If you like that joke, you can make it yourself.]

I’ve now heard an NPR, and read two print media, stories on this and none of them explains what a great deal this is for the Postal Service, instead parroting their official line on customer value (of course, both can be true) and recounting worries from this and that opiner about whether the Postal Service might lose money on the deal.

Lose money? That would take some doing. What’s not being mentioned is that a stamp is an interest- free loan from you to the Postal Service, rather like a traveler’s check. They should sell all they can, rolls and rolls of them, and hope everyone stashes a lifetime supply in the drawer, as long as they have a place to put the revenue that earns more than rates will go up. If they do, they’ll have enough to deliver your letter when you finally mail it, and money left over. As it happens, first-class postage has increased 29c since 1974, only about 3.125 percent per year, so interest rates would have to be historically low for this stamp not to be a bad financial bet for you and a good one for the Postal Service. Not to mention the stamps that will be eaten by the dog or just lost, which are all gravy.

Actually, I think this is a good idea on the whole, as long as one just buys a reasonable supply, purely to avoid the inconvenience of having to top them up when rates increase. But I wish our reporters would tell the story properly.

Author: Michael O'Hare

Professor of Public Policy at the Goldman School of Public Policy, University of California, Berkeley, Michael O'Hare was raised in New York City and trained at Harvard as an architect and structural engineer. Diverted from an honest career designing buildings by the offer of a job in which he could think about anything he wanted to and spend his time with very smart and curious young people, he fell among economists and such like, and continues to benefit from their generosity with on-the-job social science training. He has followed the process and principles of design into "nonphysical environments" such as production processes in organizations, regulation, and information management and published a variety of research in environmental policy, government policy towards the arts, and management, with special interests in energy, facility siting, information and perceptions in public choice and work environments, and policy design. His current research is focused on transportation biofuels and their effects on global land use, food security, and international trade; regulatory policy in the face of scientific uncertainty; and, after a three-decade hiatus, on NIMBY conflicts afflicting high speed rail right-of-way and nuclear waste disposal sites. He is also a regular writer on pedagogy, especially teaching in professional education, and co-edited the "Curriculum and Case Notes" section of the Journal of Policy Analysis and Management. Between faculty appointments at the MIT Department of Urban Studies and Planning and the John F. Kennedy School of Government at Harvard, he was director of policy analysis at the Massachusetts Executive Office of Environmental Affairs. He has had visiting appointments at Università Bocconi in Milan and the National University of Singapore and teaches regularly in the Goldman School's executive (mid-career) programs. At GSPP, O'Hare has taught a studio course in Program and Policy Design, Arts and Cultural Policy, Public Management, the pedagogy course for graduate student instructors, Quantitative Methods, Environmental Policy, and the introduction to public policy for its undergraduate minor, which he supervises. Generally, he considers himself the school's resident expert in any subject in which there is no such thing as real expertise (a recent project concerned the governance and design of California county fairs), but is secure in the distinction of being the only faculty member with a metal lathe in his basement and a 4×5 Ebony view camera. At the moment, he would rather be making something with his hands than writing this blurb.

7 thoughts on “Stamps”

  1. Weird. I thought that those denomination-free stamps labeled "First Class" already worked that way. I wonder if, in practice, they do. Do the postal workers canceling envelopes know that "First Class" with the flag is $0.37, and with the flower is $0.34? (Ah, here's a link: http://alphabetilately.com/G2.html)

  2. Already the case in the UK – we've had stamps marked "1st" and "2nd" for years. I'm guessing it's probably the same in a bundle of other countries, although I haven't the time now to check.

  3. Hmm, how about just declaring a first class stamp *now* as a "forever stamp." When I buy it, it is good for one first class letter of standard weight forever. Why have two different kinds of first class stamps? Begin with the newest series and go. Perhaps limit the number a consumer can buy at one time to 100 stamps. I have to wonder how much producing 2 & 3 cent stamps costs, and how the elimination of that cost would affect the USPS budget.
    Right now, I simply throw away my old stamps rather than hassle with going to the Post Office to buy the 2/3 cent extras. I just buy a new book of stamps when I'm at the grocery store. This means I toss three to five stamps every few months.

  4. "What's not being mentioned is that a stamp is an interest- free loan from you to the Postal Service, rather like a traveler's check."
    Or, more precisely, a gift certificate. But yeah, it sounds like a great deal for the USPS and a good deal for the consumer.

  5. It just has to cost more for USPS to print those two-cent stamps and to junk all their existing printing plates than whatever they 'profit' on people who discard a few stamps. (If you have a brand-new $37 roll I'll bet you'll go buy the add-ons, I did.) Meanwhile, I've never seen a US stamp that said "First Class." only ones with specific denominations. (except when they printed "'B' postage" when they didn't know for sure what increase they'd be getting a few years ago.) And there is the problem of stamps for overweight/oversize postage. Somebody would need to crunch some serious numbers, but it certainly *sounds* like a good plan.

  6. Your interest free loan argument only holds if people will stash away more forever stamps at any time than they already currently do with normal stamps. So you have to compare the number of incremental forever stamps purchased and held (per your interest free loan argument) relative to the lost payment from not charnging all forever stamp holders from a price increase. Regardless, the real savings will be in not having to deal with the logistics of managing 1,2,and 3 cent stamps – which I would guess is a big, costly pain.

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