A Penny for Your Thoughts?

Filed under Cost, Revenue, and Rates, Mailing Services  

Tags: , ,

Half a penny for your throughts (picture of scissors cutting a penny)

Stamp prices are traditionally in whole cent increments. That means it is difficult to target a particular percentage increase. For instance, a one-cent increase on the 42-cent stamp would have been 2.4 percent; while the two-cent increase was 4.8 percent.

Postal price increases are now limited by an inflation-based “cap” for each class of mail, and in First-Class Mail, the price of a stamp is a major component of the average revenue per piece for First-Class Mail. As such, the price change for the “stamp” plays a large role in the calculation of the average for the class. Other prices in First-Class Mail have to be set to bring the average back to the cap. This can make it difficult to meet many of the other pricing objectives in the class such as setting workshare discounts equal to the cost savings. It might be easier to meet the objectives if the stamp price were in a smaller increment.

In any event, how important is it that the stamp’s price is in whole-cent increments?

Which of the following statements best expresses your opinion?

View Results

Loading ... Loading …

Since stamps are generally purchased in booklets or coils does it matter whether the individual price is rounded to a penny? Could increments larger than a penny be accommodated in the price cap environment? What other issues should be considered regarding the stamp price?

This blog is hosted by the OIG’s Risk Analysis Research Center (RARC).

Post to Twitter

 

Permalink | Comments (13) | Oct 5, 2009

 

 

13 Responses to “A Penny for Your Thoughts?”

Pages: [2] 1 » Show All

  1. 13
    jkbeck Says:
    October 26th, 2009 at 10:00 pm

    Several years ago I purchased a halloween costume for my son. At the time I ordered, the company told me they could not mail my purchase with the USPS. When I received my package, I was extremely mad. I was charged double the shipping, (it came by UPS), and the company I ordered it from, put my son’s costume in a FREE US Postal Service priority box. They had turned the box inside out and mailed it to me. My suggestion: the Postal Service needs to charge all customers (for example $3.00) for each box they want. WHen this customer returns to actually mail it, they will be given a $3.00 CREDIT towards mailing cost. The USPS is giving out free stuff with out and income. Just a suggestion. Thanks!

  2. 12
    RBriarcliff Says:
    October 22nd, 2009 at 5:40 pm

    As I have seen with many companies, the USPS needs to be customer focused to make money.

    I have three suggestions. 1) Simplify the rate structure. My biggest gripe is having to drive to the PO in this day and age just to weigh a letter because it might be heavier than an ounce or slightly outside certain “normal” dimensions. I would rather pay a penny or two more on the first ounce if I could just know it was flat fate for letters up to a certain much larger size (people have rulers. they tend not to have oz scales). 2) Partner with Hallmark and other card vendors to sell prepaid envelopes. I am not sure logistically how this could be done, but I am sure Hallmark could have a wall behind the cash register with colorful envelopes which match standard card sizes. This way, the consumer does not worry about weight and size, no stamps need to be printed, and the post office can set the price upfront with the card vendor to the extent of maybe even making the cost “included” in the card price. Once again, I do not have to expend extra effort to find and buy stamps. A lot of card stores already have PO boxes outside, but making sure that they do (maybe make sure they have it inside the store) would be great. 3) really market the personalized stamps. Once again, Hallmark and other card vendors could have in-store machines (no weights or packages–cards only) with SD/MMC, etc slots to read a digital image and print the postage. The machines could also print international postage.

    Personal letters are becoming a thing of the past. Card stores and the USPS should partner together on this front since they have the same objective when it comes to personal mail.

  3. 11
    Nostradamus Says:
    October 21st, 2009 at 7:39 pm

    I think that the price of the stamps need to go down anyway!!

Pages: [2] 1 » Show All

Leave a Reply