USPS rate increase

It isn’t a forever product though, it’s a forever credit for a future purchase. If I was in a business selling a $20 trinket and a customer offered me $20 cash today in exchange for a promise to give her the same trinket for free some time in the future, I’d gladly take that deal if my business can get a better return on the cash than the potential future trinket price increases.

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Why didn’t you buy them when they first came out? Weren’t they like 32 cents? Less?

Too young. I got my first job in 2007

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That analogy doesn’t really work. The problem here is the USPS isn’t selling a trinket… they are selling a service that they don’t know what the costs will be in the future. They sell a stamp to deliver a letter today for $0.58 that might cost them $2.50 to deliver decades from now.

Their labor costs are out of control and they have a lot of unknown expenses like the costs of commodities (gasoline). There may even be political pressure to make their entire fleet electric vehicles which could cost a lot.

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They do know the future costs will be unrelated to the use of that stamp. The incremental cost of a letter is virtually nil, since they are incurring the costs of daily delivery regardless. Even if they reduce delivery days or cut services, that stamp only entitles you to the standard service at the time it is used.

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My point is that a good, growing business would turn that $0.58 I gave them today into more than $2.50 “decades from now.” USPS is not really a business that is free to invest or grow, but for any other growing business the analogy works.

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and for the USPS, your analogy doesn’t work. It’s costs are going up more than inflation, and it won’t declare bankruptcy. Thus, you have an almost guaranteed ROR that’s greater than inflation. Compared to today’s CD/savings/mm rates, that ain’t bad.

You guys are forgetting the REAL reason behind the forever stamp. Once the USPS figured out how much it cost them to change their stamps everytime they changed their postage amounts, plus the amount of time they had to spend selling 1 cent stamps to the people that still had old stamps leftover (and those stamps probably cost more to produce than they were worth), plus the man hours and machines needed to look and see if the correct number of 1 cent stamps were added to make proper postage, they made the very easy decision that whatever they lost on the l33tsauces of the world (not much really), they would more than make up for it by not having to change stamps and deal with the usage of 1 cent stamps after every rate change.

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