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?”

Pages: « 11 10 9 8 7 [6] 5 4 3 2 1 » Show All

60
Josh Says:
February 3rd, 2010 at 3:31 pm
The convenience of postage stamps is without dispute. The clunky, inconvenient online procedure to purchase postage is no answer to this situation. Several thoughts:

To lower costs, print stamps with ordinary gum on the back–that’s right: lick-n-stick! This must be less expensive than self-adhesives, and they’re better for collectors as well. If the USPS is concerned about reuse by unscrupulous persons (of inadvertantly uncancelled but postally used stamps), the use of difficult to soak gum is an option (think of the 11c printing press from the 1970s “Roots of Democracy” series and all of the “Transportation” coils of the 80s/90s).

As to the “waste” of stamps returned for destruction, there’s a solution, one that collectors might not like, but certainly a way to recoup the cost of production (and maybe a little extra to boot): cancel-to-order! Many other countries do this, maybe the US should get on the bandwagon. Those extra stamps remaining unsold are returned as usual, but instead of burning them, these stamps are “postmarked” and sold at lower prices as collectibles. This would be a great way for collectors to get full sheets of commemoratives for their collections (imagine a CTO sheet of twenty of the $17.50 Express Mail stamps!!), and the USPS would be able to sell excess stock to break even–or better. To work best, gummed stamps would be nice, though self-adhesives would be okay.

In order to stimulate interest in collecting, encourage clerks to sell the many issues produced–not just those ridiculous “forever” booklets! No wonder the USPS whines about excess inventory–customers always get the same design over and over and over…

Finally, stamps could be wonderful public service tools–to educate users about…almost anything! Imagine a series (or a booklet set–even rendered as “forever stamps!) with images of poisonous snakes, or a set with plant names under images of common plants native to our fair land! As so many people would potentially see commonly sold stamps, these little bits of paper are under-utilized as information vehicles in and of themselves. Let’s dispense with the “Liberty Bell” and use that space in the faces of stamps for something constructive instead!
59
IGC Says:
February 3rd, 2010 at 9:53 am
Print less stamps and have more variety in less quantities for collectors. This will create more demand.

Do not destroy the remainder.

Raise the price of stamps to 54 cents.

Cancel stamps to the order like other countries do instead of destroying them.

After rate changes continue selling the stamps.

Stop providing envelops, labels, etc. for priority mail.

Dont offer discounts for metered mail, etc.
58
Steve B. Davis Says:
February 3rd, 2010 at 8:34 am
- print way fewer for each issue.
- make glue soluble for collectors to soak
- stress quality design
- issue fewer stamps each year
- make more stamps available in booklets for convenience of mailers.
All of these will make them more desirable to collectors
Remember most collectors buy stamps and in most cases the post office doesn’t have to provide a service in exchange because the collectors don’t use them on mail.
Stamps are an expression of a country’s culture and a celebration of its accomplishments. Do Not get rid of stamps.
57
bob Says:
February 2nd, 2010 at 12:28 pm
A few more thoughts: put the water soakable layer back. Give kids a chance to collect US stamps. It will only lead to more mail later and more stamps purchased.
Make the APC’s more friendly. When they first came out I purchased 10ea 1′s, 2′s, 3′s, all the way to 20′s.Then was told nothing under postal card rate. I enjoyed using these APC’s to friends, collectors and myself, all profit without the “Clerk” overhead.
Stop treating the American public like fools. At least 100 million of us know there’s such a thing as First Class Mail, that bulk rate stamps can be used with a permit, that letters can be insured, etc. Instruct your clerks that these things do exist. Your campaign of “Shipping Ain’t Complicated” is turning many an American to no longer regard Postal People as friendly, knowledgeable Government workers into money grubbing thieves, only interested in squeezing every penny out of this monopoly. Besides, you advertise this stupid commercial, over and over and over. Have pride in what you do, turn out a good product and service. Have pride in the Post Office, as I have had pride to be a American Stamp Collector for over 40 years.
56
Mike Says:
February 2nd, 2010 at 11:42 am
One though is to track the number any given stamp produced, then track the number ultimately destroyed. Then adjust the next production accordingly, we’ll never get it perfect but maybe we can reduce the waste. Case and point the USPS makes series of stamps yearly; Flags of our Nation, Nature of America, Legends of Hollywood, Madonna & Child just to name a few. Do we know specifically how many were manufactured verse how many were destroyed for each stamp? If there’s a large gap, then reduce the number manufactured; continue the process until we get right. We honor distinguish American’s that nobody knows who they are. Ask 100 people on the street have they ever heard of William Hart, Joseph Story, Mary Lasker, Edna Ferber, heck ask anybody your office have they heard of these people. You got to ask, are we in the field to promote supposedly famous people, or to sell stamps? I’d love to see the destruction numbers on these stamps. We have the Citizens Stamp Advisory Stamp Committee which are the people who decide what stamps are going to be chosen in any given year. How many philatelic collectors are on the board? Is there any major mailers on the board? What is the average age of the committee member? What is the average age of a customer who purchases stamps at the post office? Are the two even remotely close? Have you ever seen stamps produced from other countries? We look like and are behind the times compared to them. Every year we produce a holiday stamp, a reproduction of a painting with the subject of Madonna and Child. Now this is because Christmas is a Christen holiday, and the stamp sells well. But why not change the subject matter, how about a Manger, or the three Kings, or a Nativity. Can you imaging going to ice cream shop then finding out they only got two types soft serve vanilla, and also regular vanilla! Sure it will sell, but will there sales increase if they offer more verities? We’ve had blue Panthers, blue Big Horn Sheep, and blue Polar Bears, what’s next pink Elephants? Why does the subject of the second ounce rate stamp, not relate to anything of the first rate stamps? These stamps must be used in tandem. Do you wear stripped pants and plaid shirts? One thing I’ve always found funny, is that everybody states the Elvis was the number one seller of all time. There was a contest, people voted for which stamp they wanted, and the design that got the most votes was made into a stamp. Well if that’s true, here’s an idea, why haven’t we put the one that came in second on a stamp? We have had a lot of subject matter that sold very well, Carousel Horses (animals), Ballet Dancer ( black background, pink dress), pretty much anything with flowers on it, same with sports (and it doesn’t have to be famous people) puppies, kittens, Disney, Rail Road -Steam Engines, Baseball’s Legendary Playing Fields, and Lighthouses just to name a few. But we’re now selling the fourth in a series State Flags on a coil of, and the only way we’re getting people to buy them is to hold back on the normal coils of a 100! This year’s subjects include Cowboys (what does that tie in with?), Abstract Expressionists (you call that art?), and Julia De Burgos (who?) and for Christmas we’ve got Holiday Evergreens (we’ll corner the market on those botanists) We used to sell a book of stamps that came in a folded over in cardboard booklet which was about the same size as a credit card, it sold well. What happened? Are people no longer carrying wallets? Nobody has ever seemed to figure it out in Washington that the larger the stamp, the worse the sales, how did Star Wars sell? My final thought is when we take stamps off sale pretty much nobody knows about it, we should have posters now on sale, and last chance, or going, going, almost gone. Less stamps to send to stamp destruction.
55
bob Says:
February 2nd, 2010 at 10:09 am
Stamps educate, illuminate, they are ambassadors to the world, plus they produce a very real profit for the Post Office.20 million stamps collectors (The Post Office’s figures) will start using their stamps, thereby eliminating a large profit for the PO. How about not destroying existing stocks. How about using up these stamps on each window. Various denominations are needed every day by clerks. Want to cut back? Cut back not on services but higher level, overpaid, execs. The American public needs good mail service, business requires it. Get the Post Office back into the Government, stop this wasteful outsourcing, we deserve the best Postal Service in the world.
54
Eric Scigliano Says:
February 2nd, 2010 at 3:57 am
Simple: resume producing lick-and-stick, paper-and-corn-syrup stamps, as the U.S. did for more than 150 years and most countries around the world continue to do. These stamps, made of biodegradable, recyclable materials, surely cost much less than today’s plastic peeling ready-sticks with their fake perforations and 2-to-1 ratio of backing and trim waste to actual label. Real stamps pleased collectors and souvenir savers more than plastic fakes, one reason retention (the Postal Service’s most profitable sales niche) has fallen.
Also: don’t feel compelled to print everything in lavish full-color offset. Some countries (Italy for one) still produce beautiful stamps with simple line art.
Of course, produce fewer designs and stock them longer. (And make more of them–not just one eyesore–”forevers”.) In other words, do what the Post Office used to do. It may be too much to imagine a return of intaglio and in-house printing, but…. what would they cost?
53
Gannon Sugimura Says:
February 1st, 2010 at 6:44 pm
It’s very simple. If all commemoratives were “forever” stamps, the stamps could be sold even after a rate change. This is what Great Britain has done for nearly 20 years now. (Denominated domestic rate commemoratives are the exception, not the rule, in the UK). Or, change regulations to allow postal clerks to use up obsolete stamps instead of using the meters. That way, it would be possible to use up obsolete rate stamps without having to ship them anywhere for destruction.
52
David Says:
February 1st, 2010 at 6:37 pm
1) Reduce the number of stamp designs. Most designs aren’t even available at post offices, so they serve no postal purpose.
2) Issue more stamps that are purpose-specific rather than value-specific. Thus, these all would be forever stamps. For example, one ounce, additional ounce, post card, and non-machinable.
3) If it economically makes sense for the postal service, allow postage to be more readily purchased from USPS.com (either for online printing OR purchasing custom orders for collectors).
4) Is it time to consolidate some rates? Are the number of different rates available creating more management costs or lack enforceability? Really, what percentage of non-machinable mail is being forced to pay the non-machinable rate? If there shall be a non-machinable rate, why not make it the same as a second ounce? Do postcards cost that much less to mail than regular letters? Easier or more complex to pay a higher rate every one ounce or two ounces?
51
Bobb Says:
February 1st, 2010 at 5:13 pm
Reduce the number of commemorative stamps issued each year. The large number of new stamps issued each year has deterred stamp collectors from trying to keep up with all new issues.
The USPS could also reduce costs and eliminate a great deal of waste paper by going back to water activated glue instead of self-adhesive glue.