How Can the Postal Service Reduce the Costs Associated with Postage Stamps?

Homer Simpson saying "Get Rid of Stamps???"

How much does it cost to develop, print, ship, inventory, secure, sell, and cancel a stamp used to mail a letter? What about the stamps that are never sold? The Postal Service destroys billions of stamps each year because they are obsolete. In FY 2008, the Postal Service printed 37 billion stamps, which cost $78 million to print. In that same year, they destroyed old stamps, some of which were printed more than 10 years ago, that were valued at approximately $2.8 billion. Those stamps were printed, shipped, counted multiple times in various inventories, and finally shipped back for destruction under secure conditions. How much does this cost and does the Postal Service benefit from the expense?

Are there better alternatives to stamps? Business customers often rent postage meters and use permits for bulk mail. Now, the advent of online postage vendors has given individual customers an alternative to stamps. Customers that use online postage can customize their postage and incorporate approved language or pictures.

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Not everyone has access to a computer. What can we do for people who do not have access to online postage or who simply do not want to use online postage? One answer may be simplifying the Postal Service’s current stamp inventory. What if all postage stamps were “Forever Stamps”? Stamps would never become obsolete and have to be destroyed, and production costs would never eat up their contribution to overhead. After a rate increase — now generally an annual event rather than every 3 or 4 years — there would be no 1-cent or 2-cent stamp shortages or rush to produce the next generation of denominated stamps.

What about stamp collectors? Would philatelic sales suffer if the Postal Service reduced the denominations it offered? Commemorative Forever Stamps could be issued in limited quantities to satisfy collectors. Some commemorative stamps could be sold locally, while others could only be ordered and shipped direct from a central location. Forever Stamps that marked holidays or other special events such as birthdays would be very useful for people who wanted to stock up. And what could be more appropriate for wedding invitations than “Forever Love” stamps?

Do you know of a better method of postage payment, convenient and available to everybody that could be implemented?

Tell us what you think.

This topic is hosted by the OIG’s Field Financial East directorate.

Topic was revised to indicate that 37 billion stamps not $37 billion worth of stamps were printed in 2008.

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110 Responses to “How Can the Postal Service Reduce the Costs Associated with Postage Stamps?”

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110
sto guide Says:
July 16th, 2010 at 1:48 am
Are there better alternatives to stamps? Business customers often rent postage meters and use permits for bulk mail. Now, the advent of online postage vendors has given individual customers an alternative to stamps. Customers that use online postage can customize their postage and incorporate approved language or pictures.
109
Mike Says:
May 3rd, 2010 at 11:14 pm
1st, Im a philatelist! But not so much of a buyer of ALL the new issues. I couldnt keep up w/ the cost for the volume i wanted. And I reduced my volume per issue as it got more expensive. There are tooo many issues per yr! Only a few issues are worth having, issue less and make each issue more appealing, subjects of importance in our history, culture and future. More engraved stamps. Has any US stamp won an international award for its design? Look to see what other countries who do win,.. are doing. Allow for sufficent time for an issue to be out. Let PO’s swap issues for what their customers request, or send all the old issues to a centralized main office or philatelic center. I have been told there is a new cashier/inventory system, 1 clerk could not sell me an item in his drawer simply because it was not in his inventory! He couldnt scan it! Lost sale right there!
Make sure clerks are up on what issues are out. I hate an ignorant USPS clerk!
108
Doug Says:
May 2nd, 2010 at 12:08 am
Make more of them forever. Perhaps commemoratives released just after a rate change could still be denominated and ones released closer to an impending rate chage could be forevers.

And stop silly things like have one Priority rate be $4.90 and another $4.95. It is confusing (I can’t even remember which is the small box and which is the envelope) and no one is going to run off to UPS if both were $4.95.
107
Bill McKay Says:
April 27th, 2010 at 6:24 pm
I believe we can largely eliminate stamps, save the customer time and the USPS costs.

Rather than have the customer (individual or corporate) determine postage and affix stamps for mail, have the customer identify themselves through a 3D barcode that is attached to the piece of mail or package and have the USPS determine proper postage and bill the customer through an account they have created at the USPS. The mail would be scanned/processed when entering the postal system. The customer would not have to buy anything in advance, wait in lines at the post office to determine correct postage, etc. The customer identifier would be the minimum info required on the barcode. A sheet of these barcodes could be printed on any home inkjet printer and used as a ’stamp’ for letters and/or packages having no predetermined value. Additional information could be (optionally) included on the barcode such as insurance, certified mail, return receipt request, etc. Optionally the barcode could contain the 9 digit destination zip to gain postage discounts.

Provide an option for anyone to create an account with the USPS using a credit card (or?)as payment. Return address would be required information for mail needing to be returned due to inactive accounts.

Provide a small application to the customer that will run on a local PC or web based application to enable the customer to locally print 3D barcodes.

Provide an on-line detailed or summary statement for each customer of items mailed, where they were scanned, additional information included on the barcode (if any)
106
Caleb Stoever Says:
April 26th, 2010 at 4:44 pm
What if the post office developed a system similar to the print labels at home system. So that every post office printed their own stamps right in the store through a machine. It comes with blank tape and the image that is the most current say every three months it can change (keep stamp collectors on their feet) It also eliminates the possibility of fraud and encourages non-postal center locations.
105
Erin Says:
April 15th, 2010 at 3:50 am
I think “Forever Stamps” are a good idea.
104
Gayle Says:
April 6th, 2010 at 11:45 pm
Sounds like a terrific idea. I especially love the wedding invitation stamps idea of ‘forever love’.
103
Ward D. Wilcox Says:
March 26th, 2010 at 8:13 pm
Collectors buy , and do not use for mail , at least for long periods of time , giving the PO a FREE loan . Huge quantities of the 3 cent commemorative issues overhung the philatelic [ stamp ] market for over fifty years . By that time , few were used as primary postage as it took 13 to frank a 1 oz. 1st class letter . Any product that costs $900,000.00 to generate over 1/4 BILLION $ in revenue is a winner ! Keep the stamps . Forever stamps are fine and should be produced for all popular classes of mail : Priority , Express , 1st Class , Bulk , etc. and should be supplemented by stamps of fixed values from .01 all the way to $50.00 or $100.00 to facilitate the mailing of Registered and heavy parcels and letters . Both the Forever and the denominated stamps should be printed in quantities estimated to last about 2 years. When running low , a new design should be used if the PO wants to garner the sales to collectors of MINT US Stamps . And stamps should be engraved , with themes that make us proud to be Americans as the stamps issued prior to 1960 usually were . You might even consider cutting down on the number of supervisors and giving the delivery people enough work to do so that they don’t have to ” coop ” in restaurants and HUD High-rises for hours every day because they;re not supposed to bring their trucks in until 2:30 PM or some other specified time .
102
Wendy Says:
March 17th, 2010 at 6:35 pm
I’m a spouse of a postal worker & here are my ideas to save money on stamps:

- Make stamps black & white or 1 or 2 colors; especially for the forever/generic stamps.

- Only use forever stamps: people are only looking at them when they buy them & when they stamp the envelope. Collectors are the ones that most appreciate the different stamps.

- If folks want stamp variety,let them order them or pay extra for them.

- Only have a small amount of special stamps for holidays or custom ones for folks to print/order for their special events.

- People will not stop buying stamps b/c there are no “cutesy” stamps for their cards. There is no other company that mails letters & catalogs.

- Many stamps are not available in post offices; especially smaller offices & they often run out.; 3 different ones would be enough & have each office post what is available. I never know what is available – many just buy/are offered the generic ones. Make the “cutesy” ones cost more than the forever stamp.

- Make all of the designs forever stamps.

http://voices.washingtonpost.com/federal-eye/2009/08/is_this_why_the_postal_service.html?hpid=news-col-blog

In the link to the above article, Dave Failor,Postal Service’s Executive Director of Stamp Services, has been quoted as saying said it costs

$40,000 to make a a commemorative stamp & $5,000 for artist design; for20 stamps that year that’s $900,000!!The stamps generate $250-$300 million year. How much is generated from collectors?

- Last year $2.5 billion worth of obsolete stamps were destroyed! That’s 1 quarter of your losses last year.

- Print stamps on demand saves on overstock.

- It is waste of time & employee hours having to inventory & count these obsolete stamps – cost & time to ship & destroy these; why are 10 years worth of obsolete stamps sitting in post office?

- Sell stamps to dealers for collectors to buy; eliminating USPS overstock.

- Print limited amounts of commemorative stamps that will run out of stock in say Sept. & then use forever or holiday stamps til end of the year.

- Encourage folks to print postage online esp. businesses.

- Eliminate ALL management bonuses until USPS gets out of trouble.

- Get rid of making the postal gifts are they really worth it? Or just stick to the stamp magnets/maybe pens for collectors.

- Only offer stamps in coils or books at the post office – indiv stamps can be to order. This saves the work of clerks time counting indiv stamps in inventory.

- For folks that bring letters/packages to post office – instead of stamps, use refillable cards (like gift cards) – this would save time in
clerks servicing customers & reduce customer wait times, reduce clerks dealing w/ money & counting drawers (& drawers being short).

- Suspend mystery shop program.

I look forward to these changes being implemented soon.

Leave the employee salaries alone. They work hard & many long term employees encounter injuries from repetitive use & heavy lifting. They
do not need to be hassled by management to hurry up delivering mail(during Christmas times volume is higher) so that management can get their bonuses! They cannot afford salary reductions. My spouse lost
$10,000 in salary – we can’t afford this loss especially in this economy (what a thanks & appreciation for her 25 years of service). This used to be a great job to have – no more.
101
jay kahn Says:
March 13th, 2010 at 12:46 am
at regional post offices, drill holes in sheets/booklets/etc. Staple then in blocks of 25 by denomination.

At destruction facility, books can be spot checked and destroyed by “untrusted” temporary workers