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The Stamp Price Power Play

August 15, 2017

We talked about the Postal Service’s rules for raising stamp prices in our recent blog post, A Penny for Your Postage?, but here’s a quick refresher: As it stands, the USPS can only raise stamp prices with the rate of inflation. But, the USPS is asking for more freedom to raise the stamp price after pressure on their bottom line has put them in the spotlight in recent months. The Postal Regulatory Commission would need to approve the decision.

If granted, this change would be one of the biggest in recent postal history as the USPS tries to remain competitive in this ever-evolving landscape that includes drone delivery as an actual possibility.

Overall mail volume, which makes up more than two-thirds of postal revenue, dropped 27 percent over the last decade as people rely more on email and online bill payments,” according to the Daily News.

While the extra revenue from raising stamp prices could help offset some of those losses, there’s a delicate balancing act that needs to happen. Raising stamp prices too high can mean potentially losing some cost-sensitive customers and could “accelerate the demise of first-class mail” according to one analyst.

Though granting more freedom to raise stamp prices hardly fixes underlying issues – like the unique requirement that the USPS pre-fund 75 years worth of retiree benefits – it could give them some financial relief and allow them to invest in much-needed new trucks and technology to increase delivery efficiency. The decision is expected in September, so we'll keep you posted as it unfolds.

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