Friday, July 9th, 2010...9:21 am
Stamp Prices Don’t Matter – USPS
The following is a quote from James M. Kiefer, Pricing Economist for the U.S. Postal Service on the behalf of The United States Postal Service.
“The single-piece, first-ounce price, commonly known as the stamp price, is the most visible price offered by the Postal Service. It is also the single most important price in terms of revenue generated.
“Yet, despite the attention it draws, both in the public and regulatory arenas, the typical household is little affected by changes in the stamp price. A change of two cents in the stamp price amounts to only about 41 cents per month for the typical household which pays about $6.89 per month for First-Class Mail sent. In addition, since 2007, the Postal Service has offered the Forever Stamp, which allows single piece First-Class Mail customers to minimize the potential inconveniences of stamp price changes.
“Because the actual expenditure on postage by the typical single-piece First-Class Mail customer is small, and because the additional expenditure caused by increases in the stamp price are even smaller and can be effectively mitigated through the Forever Stamp program, the Postal Service does not believe that the erosion of single-piece mail through electronic diversion can be materially affected by limiting the growth of the stamp price.
“Factors other than the stamp price itself are the driving forces leading to electronic diversion. One is a matter of simple convenience.
“Another powerful factor driving the diversion of hard copy to electronic communications is the incentives offered by large companies for switching to electronic statements and billing (these “incentives” sometimes are presented as an additional fee for receiving paper statements). In this case, the driving force behind the erosion of single piece mail originates, not with the individual single piece mail customer, but with the large business mailer that does not itself use 2 single-piece mail to send its bills and statements.
“As long as these forces are in play, efforts to hold down the stamp price to “protect” the single piece customer will be unlikely to spur usage of single piece mail among users, for whom convenience trumps the small impact of the postage savings. ”
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1 Comment
July 9th, 2010 at 6:38 pm
The price of stamp wont matter to consumers, what matters is service, post office tends to raise rates frequently without any value added to the customer.
Their volume is shrinking and they are slow to react. One cannot expect speed nor urgency from this quasi Government agency. I wish they increase the price of stamp to $.75 and leave us alone, the 2 cents wont do anything to the Billions they are bleeding and every time, rates go up, more meters and more price tables have to be adjusted. The other idea that is floating out there is to sell USPS to FedEx and watch it be done right. FedEx is moving most of the freight for them anyway. I think the USPS will be a thing that the next generation will poke fun at..my dad used to go to the post office and wait to buy “stamps”.
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