Price of Postage Increases May 12

Story by Kathleen McFadden

Here’s the bad news: the price of a first-class stamp increases by a penny to 42¢ on Monday, May 12. Here’s the good news: you will have already mailed your Mother’s Day card to your mom by the time the postage increase is effective.

So what about those Forever Stamps that the U.S. Postal Service rolled out in April 2007? Last spring, just before the price of stamps increased from 39¢ to 41¢, the Postal Service debuted the Forever Stamp, featuring the Liberty Bell image, the word forever and the promise that the stamp would be good for mailing one-ounce first-class letters anytime in the future—regardless of price changes.

That’s still true. You can continue to use Forever Stamps that you purchase prior to May 12 at 41¢, even after the price change. The Postal Service promises to have 5 billion Forever Stamps in stock to meet increased demand before the price change.

As of May 12, postcards will cost 27¢ to mail—another penny increase.

The Postal Service is also adjusting prices for Express Mail, Priority Mail, Parcel Select, Parcel Return Service and International Mail. For the first time, Postal Service pricing includes commercial volume and contract prices, rebates, online price reductions and other incentives.

Express Mail is switching to a zone-based pricing system, resulting in customers paying less for nearby destinations. Customers will receive a 3 percent price reduction by purchasing Express Mail online or through corporate accounts. Additional price reductions are available for those who ship quarterly minimums.

Priority Mail will have an average 3.5 percent savings for customers who use electronic postage or meet other requirements.

Parcel Select—the Postal Service’s “last mile” delivery to every door—will feature pricing and volume incentives for large- and medium-size shippers.

Parcel Return Service will move entirely to a weight-based pricing system, resulting in significant price reductions for many lighter packages.

If you think postage rates are increasing more often than they used to, you’re right.

In the 1990s, first-class postage increased just three times:

• The price of a stamp jumped from the 25¢ established in April 1988 to 29¢ in February 1991.
• The next hike came in January 1995, with a 3-cent increase to 32¢.
• And in January 1999, we started paying a penny more when the price of a stamp increased to 33¢.

In contrast, the price of a stamp in the 2000 decade has already gone up six times if you count the upcoming May 2008 increase. In January 2001, we were paying 34¢ for a stamp. In a couple of months, we’ll be paying 42¢. That’s a 23.5 percent increase in this decade.

And you can expect even more increases—and they’ll be on a regular basis. The Postal Accountability and Enhancement Act of 2006 gives the Postal Service the authority to adjust mailing services prices every May. By law, these prices can increase on average no more than the rate of inflation as measured by the Consumer Price Index. The Postal Service plans to provide 90 days' notice of the new prices each year, to help mailers prepare for the change.

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