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Q&A | Postage prices

Postal prices go up each May

New postal prices go into effect today. The cost of sending a first-class letter increases by a penny to 42 cents. A large, first-class envelope weighing more than 2 ounces costs $1.00, up 3 cents. Certified mail rises 5 cents to $2.70.

What has been the frequency of these penny increases?

Postage prices last went up in May 2007, with a first-class stamp jumping 2 cents to 41 cents. Under the Postal Accountability and Enhancement Act of 2006, the U.S. Postal Service says it will adjust prices every May. The service gives 90 days' notice of hikes. Price increases used to go before the independent Postal Regulatory Commission, which often took up to a year.

Why don't they raise the price 10 cents and be done with it?

By law prices can increase on average no more than the rate of inflation, as measured by the Consumer Price Index. The Postal Regulatory Commission calculated that at 2.9 percent through January. So, .029 times 41 cents is just over a penny, 1.189 cents. Fees for package delivery can be raised to compete with private competitors.

How much does it cost to mail a first-class letter to Canada or Mexico?

A 1-ounce letter to Mexico or Canada costs 72 cents, up 3 cents. It will cost you 94 cents to all other countries, up 4 cents.

And for visitors who want to send a postcard home?

It'll cost you 27 cents, up a penny, inside the United States.

What are forever stamps? Will they still be sold?

Forever stamps feature the Liberty Bell but no denomination. They can be used indefinitely, so you can continue to use those forever stamps you purchased at 41 cents. Introduced last year, they have been a hit, with more than 6-billion sold — $267.7-million worth in March alone. Starting today, of course, forever stamps will cost 42 cents. But if you find these annual hikes a nuisance, they're a good option.

Why the increase?

Consider that the use of traditional "snail mail'' has declined. Plummeting new-home sales mean vacant houses with empty mailboxes. Those mail offers of easy credit have dropped. Online bill payments may be good for the trees, but they have reduced first-class mailings. Proposed do-not-mail lists, similar to the do-not-call lists, threaten to reduce third-class mail. Higher gas prices and competition from the likes of FedEx, DHL and UPS have hurt. In March, postal officials estimated an operating deficit of $1-billion this year, the largest since 1995.

Any good news?

Express mail is switching to zone-based pricing, with users paying less for nearby destinations. You'll receive a 3 percent discount by purchasing express mail online or through corporate accounts. Shippers maintaining a quarterly minimum also save. The price for an additional ounce of first-class mail is unchanged (17 cents). Money orders up to $500 still cost $1.05. Priority mail users save by using electronic postage. Parcel return service prices are now based solely on weight, reducing the cost of lighter packages.

Information from the Associated Press, U.S. Postal Service and Times files was used in this report.

Postal prices go up each May 05/11/08 [Last modified: Monday, May 12, 2008 12:51pm]
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