Postal Service proposes unique 'forever stamp' to fund its operations
The U.S. Postal Service is proposing to raise postage rates 3 cents next spring, the first Postal Service-initiated increase in five years.
Yes, customers paid 2 cents extra beginning this year, but not for postal reasons.
"They haven't told us what it's for," Detroit Lakes Postmaster Dale Storey said of the escrow account the increase paid for.
The government started a $3.1 billion escrow account, and the Postal Service was responsible for providing the money. Hence the 2-cent increase. Storey said the Postal Service did not profit from the increase at all.
The proposed 3-cent increase, which would go into affect spring 2007, would be the profit the USPS hopes to cover operational needs like fuel increases and health benefits.
"Rising fuel costs is the main driving force," Storey said.
Every 1 cent increase in gasoline costs the USPS $8 million per year, he said.
Storey said the normal rotation for stamp increases is two to three years. USPS hasn't had to ask for an increase in five years, and "we're proud of that," he said. If Congress had not dictated the 2-cent increase, it wouldn't have been such a shock when the USPS had to propose its own increase a year later.
"It was a shock to us, too," he said of postal employees.
While postage prices continue to rise, there may be some reprieve for customers in the future.
The USPS is proposing what they are calling a "forever stamp."
With the forever stamp, customers can purchase a stamp for the proposed 42 cents. In the future, when stamps are bound to increase in cost again, customers will be able to use their forever stamp they already purchased for 42 cents and not have to pay any extra.
That forever stamp will be good no matter how much the first-class rate increases in the future.
That is the gist of the proposed stamp, but Storey said, "we don't have a lot on it." He added that when proposals first come forward, details are "sketchy" even for postal employees.
The forever stamp will only be able to be used on the standard first-class, 1-ounce letters.
Storey said he predicts businesses and customers will buy the stamps in bulk because of the potential savings.
One reason for this proposal is to bring back more first-class mail. First class mailings have decreased over the years, but bulk -- or junk mail -- hasn't. Junk mailing wouldn't have the option of forever stamp. Those rates would continue to increase over the years.
"It's quite a savings for us," Storey said. "It's like instant cash for us.
"It's a way of making the mail pay for itself. We get no tax dollars," he said.
The USPS hasn't received tax dollars since 1982, he said. And while the USPS is under the government, it is a separate entity, surviving on its own.
"We're like any business that has to sell a product," Storey said.
Like a stamp rate increase or the forever stamp proposal, the USPS needs to raise money for its employees.
Other delivery companies have to raise rates as well, he said, it's just that the Postal Service is more in the public eye, subjecting them to more dismay from customers.
Hopefully the new forever stamp will curb some of those complaints.
"It's a unique idea," Storey said of the forever stamp. "I've never seen it before."