Snail mail is about to get cheaper.
The U.S. Postal Service announced Thursday that it will drop the price of postage stamps starting this weekend--the first time it has lowered the postage rate in 97 years. The only other time in history that the cost of a stamp has gone down was in 1919, when Congress reset postage prices to their pre-World War I levels, according to a USPS spokesperson.
The price reduction marks the end of a special program that since 2014 had allowed the USPS to temporarily increase postage prices to make up for revenue it lost when mail volume declined sharply during the Great Recession of 2008 and ’09. But regulators capped the amount the USPS could recoup with the surcharge at $4.6 billion--a total that the Postal Service is set to hit by this Sunday, April 10.
Once the USPS reaches that ceiling, it is required to roll back the 4.3% surcharge it had tacked on to first-class mail and commercial postage rates. That means that the cost of a stamp to mail a standard letter will decrease from 49 cents to 47 cents this Sunday. The price of sending a postcard will also drop by a penny, to 34 cents, while international mail will go down by a nickel, to $1.15 per letter instead of the current $1.20.
While the price cut will be a boon for many consumers, it’s bad news for collectors and investors in so-called “Forever stamps,” the generic stamps valued at whatever the current postage rate is no matter when they were purchased. Since Forever stamps were created in 2007, Americans have scooped them up as a way to hedge against future price hikes that seemed eternally inevitable. But that strategy has now backfired: As former Fortune columnist Allan Sloan put it in a 2014 column, “If stamp prices somehow were cut, millions of Forever holders, including me, would feel cheated.”
The USPS, which has posted steep losses in recent years as old-fashioned mail has given way to electronic communication and pension obligations have saddled it with massive expenses, opposed the postage reduction. Arguing that the expiration of the surcharge will reduce its revenue by $2 billion per year, the Postal Service is pleading with regulators and Congress to extend the higher rates--though so far it has been unsuccessful.
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