US Postal Rates Going Up Soon So It's Time to Talk About the Forever Stamp Again!

The US Post Office has been selling the "Forever Stamp" for the past couple of years now, first for 41 cents and then, when the first class one ounce rate went up last May, for 42 cents. Well, the rate is set to go up again in a few days, this time to 44 cents. The USPS has promised that the Forever Stamp will be good for mailing one ounce first class letters at anytime in the future, regardless of rate increases.

The inevitable result is that Forever Stamps are irresistible to millions of Americans trying to save money anywhere they can in today's tough economy. And as the newest rate increase approaches, a new round of Forever Stamp stockpiling will occur, with Forever Stamps becoming even more popular than they already are.

But it seems that not quite everyone understands the concept of the Forever Stamp. People know that when they buy Forever Stamps they pay whatever the going rate is for first class one ounce stamps: currently 42 cents, but soon increasing to 44 cents. Even though the stamps have no denomination printed on them, they know their cost because that's what they're charged by the post office when they're bought. The confusion sets in when they're used after a rate increase: we've seen many a time when additional postage has been added to a Forever Stamp, apparently because the mailer didn't understand that what they paid for the stamp would still be enough despite the rate increase.

Just to eliminate the confusion, as long as the mailed piece is a first class one ounce piece, no additional postage needs to be added to a Forever Stamp. Doing so just adds to the coffers of the USPS and wastes the money of the person doing it. It may only be a couple of cents, but it all adds up.

Does the same kind of confusion surrounds the Breast Cancer stamp, since it is also non-denominated and satisfies the first class one ounce rate, no matter what was paid for the stamp at the time it was bought? We rarely see additional postage added to it, but we'd appreciate your comments.

Should You "Invest" in US Forever Stamps?


The USPS has announced yet another postal rate hike, this one to take effect May 11, 2009. The 1-ounce domestic letter rate will rise 2 cents, to 44 cents, and the international one ounce rate will rise even more, to 98 cents. Rates for many other mailing services will also increase.

Postal customers can, however, use Forever Stamps — regardless of when they were purchased — to avoid some of the bite of this and future rate hikes: Forever Stamps can be used to mail 1-ounce domestic letters after the price change without the need for additional postage. Forever Stamps are widely
available through post offices, retail outlets such as grocery stores, and online, and the USPS seems to be encouraging their use. Right now their price is 42 cents, but they'll go up to 44 cents on May 11. Forever Stamps purchased before the last rate increase (in May 2008) cost 41 cents, but regardless of what was paid for a Forever Stamp, it can be used to pay whatever the 1 ounce domestic letter rate happens to be at the time.

So, should we stock up on Forever Stamps as a means to hedge against postal increases?

No. Although we deplore the inefficiencies of the USPS which have contributed to the need for this rate hike (just like we deplore the inefficiencies of the American Big 3 automakers) the need for the increase is there. But investing in Forever Stamps by buying large quantities is a bad idea, because postal rate increases, since 1971 at least, have historically been lower than the inflation rate. Despite the numerous postal rate hikes during that period, the relative cost of stamps has actually gone down. The overall inflation rate has been higher than the postal increases, so the dollar, relative to the cost of a stamp, is worth less now than it ever has been. If the same pattern holds, as the dollar continues to go down, you'd be paying more for today's Forever Stamps than you would in the future for a "regular" stamp.

Several other countries offer the equivalent of the US Forever Stamp: the United Kingdom, Canada, France, Belgium, Finland, Norway, Sweden among others. The Forever Stamps are not a bad thing for postal customers, but they'd be a bad long-term investment.