Wednesday, May 3, 2006

Postage Stamps That Stay First Class Forever

Author: Nick
Category: Money


“Forever” stamps are one of the options you’ll have to choose from if the U.S. Postal Service gets the okay on its plan for a rate hike come spring 2007. In addition to a 3-cent hike in the cost of a first-class stamp, the Postal Service is proposing the creation of a new class of stamp that, once purchased at the standard first-class stamp price, remains first class regardless of future stamp rate hikes.

Such an option would likely result in some people purchasing gobs and gobs of stamps–theoretically enough to last their entire lives. If this comes to pass, should you make a similar bulk stamp purchase? Maybe, but it’s only worth it given a few conditions…

  • Stamp rate hikes continue. If the price of first-class postage continues to climb at a rate of 5%+ per year, buying eternally first-class stamps could be considered a wise investment.
  • You don’t lose them! So you spent $420 on 1,000 stamps that will always be good for mailing a letter, but then you lose half of them over the next ten years. All the rate hikes in the world won’t offset that sort of loss. If you make a big stamp purchase, be sure to put them somewhere safe… like a safe!
  • The Postal Service is still around. I use about one book of 20 stamps a year, so 2,000 stamps for $840 ($0.42 x 2,000) should last me into the next century. But as electronic mail usage continues to climb, the likelihood that we’ll still have a need for the U.S. Postal Service in 2106 is looking pretty low.
  • A better deal doesn’t come along. What if another company started offering first-class mail delivery rates that beat the Postal Service’s. You would then face a situation similar to being trapped in a long-term CD as savings rates around you skyrocket.

As for me, I’ll probably pick up enough forever stamps to last about 20 years. By then, I’m hoping they’ll have invented the transporter from Star Trek and I can just beam my mail to its destination.

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