USPS Announces The “Forever” Stamp: Is It Worth Your $0.39?

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Yesterday, the United States Postal Service announced the introduction of a “forever” postage stamp. Here’s how it works: whenever you buy a first class postage stamp, it will no longer be marked with a cash denomination on it like current stamps are. Instead, it will merely say “First Class” on it. Once you buy it, you can use it at any point in the future. For example, if you buy a 39 cent “forever” stamp today, and then the postal service raises rates a few times, leaving a stamp’s price at fifty cents in 2020, you could still use that same “forever” stamp to mail a letter, even though you paid only 39 cents for it.

Why is the postal service doing this? They have two reasons. First, by doing this, they don’t have to make one, two, and three cent stamps in large quantities any more, as these stamps now cost as much or more to make than their face value. Second, by giving them your thirty nine cents now, you basically allow them to use that money immediately while you might not use those stamps for a very long time. This period allows the postal service to maximize the use of those stamps.

Is this a good deal for individual stamp buyers? Before we dig into the calculations, it should be noted that in general this increases the flexibility for consumers without raising prices, so by default it is a good deal for consumers – anything that makes a product better without increasing prices is a good thing.

How do I maximize the benefit? Can you really gain a lot by stocking up on stamps before a rate increase? The only way to really tell is by looking at the recent history of stamp price increases. I’m only going to use price increases since January 1, 1980, where the price was 15 cents for a first class stamp. Thus, between January 1, 1980 and January 1, 2007 (a period of 27 years), stamps saw an average annual increase of 3.6023%.

On the other hand, in January 1980, the Consumer Price Index (the most common number used to estimate inflation) was at 77.8 and in January 2007, it was at 202.4. Thus, between January 1980 and January 2007, inflation saw an annual average of 3.6046%.

3.6023% … 3.6046% … it turns out that the rate of postage stamp increase is amazingly close to the rate of inflation in recent years. This is because that postage stamps are hedged to match inflation, as the postal service isn’t out to make a profit, but to break even.

However, there is one big difference: inflation is fairly steady, but the postal service jumps regularly. This means that if you buy a bunch of stamps just before a jump (even a year’s supply of them), you can beat inflation by quite a bit with your postage stamp purchase.

Want to visualize this? Here’s a graph showing stamp prices (I used the price of 519 stamps so the dollar amount is comparable to the raw number of the CPI) versus the CPI since January 1, 1980:

The price of stamps versus the Consumer Price Index since 1980

As you can see, they match reasonably well, but something else should stick out at you: stamps were at their biggest bargain just before the rates went up.

In other words, when the “forever” stamp goes into effect, buying a bunch of stamps just before a rate increase is a very effective way to save money. You can easily outpace inflation with this “investment” and even outpace a lot of other investments, including money market accounts. Of course, over a longer period of time (a period of two stamp rate increases or more), the price increases begin to match inflation, and that’s not a good investment.

To summarize: I plan on buying a few hundred “forever” stamps just before the next rate hike, but not more than I could use in a year. This lets me maximize the benefit of beating a rate hike, but doesn’t lock me into an “investment” that merely stays the same as inflation.

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56 thoughts on “USPS Announces The “Forever” Stamp: Is It Worth Your $0.39?

  1. Did you take into account the time-value of money? If you bought 300 stamps, that is $117 you are tying up and can’t otherwise earn a higher rate of return than inflation.

  2. Actually, specific to a forever stamp being a “new thing.” Hasn’t this already existed in circulation?

    I’ve purchased many of these generic “First class” stamps for many years prior to this announcement, and I’ve used them with no problem through the many stamp price hikes.

    I just find it odd that people would label this as being a new development when it’s been around for the longest time.

  3. I like the idea. Normally in my family, we don’t buy our stamps in quantities more than 20 – I think we’re afraid we won’t use them all before the next rate increase. The Forever Stamp we will probably buy the 100 pack, and save ourselves trips to the post office when we suddenly need a stamp!

  4. Colin: the optimal strategy is to buy a number of stamps to cover whatever you’ll use in a year. Only over a very short timeframe will you beat inflation.

    As to the question of why I would buy so many stamps: I send a lot of written correspondence (thank you notes, etc.). 300 stamps will probably not actually last me for a whole year.

  5. Of course, USPS could fix this arbitrage by increasing prices once every 4 months, or possibly even floating the rate of stamps.

  6. David,

    Correct me if I’m wrong, but I believe that you are referring to the nondenominational stamps that are frequently issued around the times of actual or potential rate hikes. Those actually do have a “face value,” only it isn’t printed on its face, so that you would still in theory have to add the make-up postage (e.g. add a 10-cent stamp to the F-rate stamp, since it is only worth 29 cents). (It seems like the post office sometimes lets things slide through unofficially, though, if you’re just a little over the weight or under on postage. And sometimes not.) You can read a little about those at the Postal Service site or at Linn’s. I am not a stamp collector, but I’m pretty sure I’ve summarized it accurately.

    The difference on the Forever Stamp is that it will be tied to the weight (i.e. that stamp always pays for that weight) rather than to a price like the older ones (which allowed planned stamps to be released during transitions such as from 33 to 34 cents).

    Ruben, the direct mail organizations will scream bloody murder if they change prices more often; magazines etc. plan their postage a year ahead of time at minimum (it’s a major budget item for them). Note that the USPS and the direct mail organizations are pretty much symbiotic; although citizens like us are the Postal Service’s raîson d’être, we are also the most expensive to serve because we are not automated. Also, since rate change proposals have to be put up for comment and get approved by the Postal Rate Commission (a board set up by Congress) before rate changes are approved, it takes a long time, even though they’re usually approved. I’ve been following this particular proposal (that is, checking back on it every couple of months) since about May.

  7. To me, no matter how slowly the postal rate increases, this stamp is a great bargain. A trip to the post office to buy stamps takes 45 minutes. My time is probably worth about $50/hour. Each trip to the post office costs about the same as 100 stamps. If I can buy a few hundred forever stamps now, and never go to the post office again, I come out way, way, way ahead. Post office probably does too — serving a customer once is much cheaper than once a year.

  8. You’re assuming the postal service will continue announcing rate hikes in advance. It would seem to make more sense for them to forego announcing the hikes in the future, to prevent you and me from hoarding.

  9. David: those stamps are the value of whatever you originally paid, which is hard to remember. If you’ve had no trouble using them before, it’s because somebody let it slide.

    I don’t recommend using these stamps as if they were forever stamps if you are sending important mail to anyone who is a hard ass, such as the IRS, which has been known to return mail for insufficient postage.

  10. Well, as far as writing the letters by mail I want to bring up bills. I’ve had a major CC company dispute more than one electronic payments, but if I have the cancelled check, I’m covered in court. This is with my being a web developer.

    The corrollary to not going with automatic billpay is that it ties you to your bank. They F up and you have to switch 10 accounts, taking an afternoon to do so. You go into a bank after they F up, they see you’ve got so many auto billpays, they don’t budge. You aren’t tied to them and threaten to walk – you’ve got some cred.

  11. Actually the best time savings is to order your forever stamps online, and receive them by USPS- you have to wait for them to arrive, but you can do a lot of research before they arrive.

  12. Now matter what the cost of using their services, I only use USPS as the very very very very last resort. I find their service appalling and delivery times unacceptable. There is so much waste in the USPS it is no wonder they have to increase rates constantly. Personally I think it is just another scam to try and buy back the customers lost due to the much more efficient electronic services available to the world today.

  13. I have a feeling that a lot of people who wait until a rate increase is announced will be out of luck trying to buy “forever” stamps then as there will suddenly be a shortage of them, either real or fake. Either they will sell out quickly, or the government will quickly take them out of supply until the rate hike goes into effect, leaving only regular stamps available for sale.

  14. On the flip side: yes, the Post Office gets your money before you use the stamps, but if you tend to misplace your stamps, a Forever Stamp at least means that they will hold their value/function, i.e. they will keep pace with inflation rather than needing to be supplemented by the time you find them again (speaking from experience).

    And USPS isn’t the greatest at times, but it can be a lot cheaper than sitting on the phone long distance. It fills a niche.

  15. Arent you forgetting to take into account what you could have done with that money? When you lock it into stamps you are taking it away from other “investment” types. Sometimes you loose more in the opportunity for the money than just inflation.

  16. Ah as the UK leads the US follows ;) We’ve been doing this here for some time now (and the current value of the stamp is honoured for international mail too).

    It’s very handy for small businesses who send out more then households, but not enough to justify the charges on a franking machine. They simply buy sheets of 1st or 2nd class stamps and stick them in a drawer.

    The way the Royal Mail get sneaky is to make the majority of the costs of non-standard packages non-divisible by the current standard prices – 1st class = 32p, 2nd class = 23p; next size up 1st class = 44p, 2nd class = 37p. Then again you can also buy non-denominational “Large Letter” stamps, so it depends on what you send the most of.

  17. By hoarding stamps at 0.39 you can re-sell them for 0.45 when the rate goes to 0.50 to those folks that didn’t hoard them.

  18. Regarding David, who says he has long used “generic First Class” stamps as though they were “forever” stamps, and the people who have said he was incorrect:

    I have done the same thing for years as well, and I never had a problem. My question is, if the Post Office just “let it slide” all those years, then you are implying that they could tell the actual value of the stamp, and let it go through anyway.

    I have a set in front of me right now. There is a flag with the Statue of Liberty and it says “First Class, USA.” And that is it. So you are telling me that Postal workers would have to be trained to learn and memorize different pictures and designs and then associate those images with actual values??? That seems ridiculously inefficient and illogical.

    I can’t believe a Postal worker would have to be required to look at a letter, and say… “Oh wait, we can’t mail this one, because it has the waving portion of a flag backing the head and arm of the Statue of Liberty, and I remember that this specific design is valued at 39c only.”

    Is the USPS really that poor at planning?

  19. When are the forever stamps available for purchase? I would love to have them on hand! I hate going to the post office.

    I agree with those that dont’ use many stamps. I do a lot of my bills on line, but we have just moved to a new state, so birthday and christmas cards etc. will be mailed through the post office.

  20. Seems to me that the best way to profit from the Forever stamp is to buy a large quantity just before a price hike and then sell them at the new rate _just after_ it goes into effect.

  21. I work in a post office and am amazed at all the misinformation the public obtains… First of all, the ‘Forever’ Stamp goes on sale April 12th @ .41 each. (not .39 as erroneously stated above). The actual rate increase takes place MAY 14th, so .39 stamps are VALID UNTIL MAY 14th. Also, there has never been a Forever stamp issued. People are getting this new stamp confused with past NONDENOMINATIONAL stamps issued whenever a rate hike occurs. For instance, postage went up January 8th, 2006. The first stamp issued is always nondenominational (meaning it has the words ‘USA First Class’ and NO numerical value assigned to it. This happened with the .39 Lady Liberty stamps that we are currently using. If you ever have a nondenominational stamp and don’t know the value, look for a year printed on it (print may be extremely small). The year usually corresponds with a rate increase. The stamp will be worth whatever the new first class rate was for THAT YEAR. Also, whoever thinks they will ‘profit’ from buying this stamp in bulk and selling them at a later date is mistaken. (I guess people will try to make money off anything they can..) Post offices will have limits on how many can be purchased by one person at one time. Not to mention, who would you sell them to? e.g., if you waited six years and the rate was up to .46, you’re going to sell your forever stamps to someone for .43 (because you can’t sell them for .41 that would be pointless) and pocket a whopping .02 PER STAMP?! Wow, you’re so freaking business -minded Congratulations!

  22. Also– Craig, letters are processed using machines, not a bunch of postal workers themselves. In response to your post, I can tell you that you have the 2006 Lady Liberty PSA (pressure sensitive adhesive) nondenominated stamps which are .39 each (the current rate). Look closely and you should see ’2006′ printed in the margin. I think ‘intro to philately’ should be required in all high schools… Then myself and fellow window clerks wouldn’t have to field such stupid questions all the time!

  23. According to the USPS web site, the forever stamp has an issue date of 4/12/07, with pre-sales that began on 4/2/07. The cost per stamp is .41¢. You will not be able to purchase them ever at the .39¢ rate as asserted in the above article.

  24. Are Forever Stamps a distraction to the fact that the public is subsidizing bulk (junk) mail? New federal law will allow for annual increases in the cost of mailing a first class letter. Bulk (junk) mailers spend as little as 12.7 cents per piece of mail. They have only seen their rates increase 61 percent since 1975, while the new rate increase to 41 cents represents a 223 percent increase to the general public over the same time period.

    With the introduction of the Forever Stamp and new legislation passed last year, we will likely see annual increases in first-class postage, perhaps even semi-annual. Will we see the cost of mailing a letter begin to outpace inflation?

  25. After hearing about the release of the “FOREVER” stamp on the radio, I decided to impulsively go online and purchase 200 forver stamps. I am 24 years old, I shouldn’t even have a mail box because I do all banking, bill paying, and communicating online. It wasn’t until after I made my purchase, did I then decide to go online and do a lilttle research. I guess my question is if I did the write thing. I’m hoping in 40 years I’ll still have about 100 left over to either sell, or pass down to my grandkids for them to collect… Will they ever be worth a lot of money???

  26. Alot of assumption is going in to the fact that these stamps will be available readily. My impression from everything I have read within the postal service is that they will be issued like a commemorative and when they are gone that’s it. Otherwise the postal service would be losing a great deal of money after the rate increases. That would mean they are only going to be available at the beginning of a rate change not necessarily right before the rate increases again.

  27. I just looked at some of my stamps (from 1998). On the actual stamp sheet it says “Each stamp is valid for postage at the current First-Class rate.” This has been out for a long time….

  28. Do you realize that your article is incorrect? You can’t buy the Forever Stamps now for 39 cents. Go to he USPS website and you will see that they are 41 cents and that is ever before the increase date. All this talk might make this topic uselss until the next increase in years. Also, it sure seems to me that they shouldn’t be selling it for 41 cents already.

  29. mytwocents: did you read the article? It does not matter what the starting price of the stamp is, the conclusion is still the same: an “investment” in the stamps will just approximate inflation over the long haul.

  30. Trent, A solid writer does not get emotional over their articles feedback. You are incorrect and are still incorrect. Read your Title again. It is incorrect and missleading.

    “Writing is an art, most people can’t paint either” Truman

    USPS Announces The “Forever” Stamp: Is It Worth Your $0.39?

  31. First class mail does not subsidize bulk mail. It is the other way around. First class mail has to be sorted first and delivered the day it gets to the carrier even if it takes overtime. Junk mail can be delayed for days until time allows. More importantly most first class mail is forwardable and most junk mail is wasted when a customer moves. 15 years ago we were told that the USPS makes about a penny profit per letter but it costs about 43 cents to forward the average letter. presumably it is more now. Considering that most customers are pretty poor about notifying correspondents (some even notify the USPS first!) when they move a fortune is spent forwarding this mail which is in the overall cost of postage. I don’t understand why the customer isn’t simply charged for this and/or the service limited to 30/60 days. People would likely be more timely in their notifications.

  32. Given that the cost to move postage is partly tied to the price of fossil fuels, the tight historical corrolation between postage and CPI may not hold-up indefinitely.

  33. Are you kidding me??? WHY would anyone stock up on stamps?? Let’s say you buy 300 stamps ($123) and save them all and down the road the price of stamps ends up at 50 cents. To buy the same amount would cost you $150, so you would save a whole $27. What’s the point??

    The average stamp user would only save a few dollars at best, and that’s only assuming they don’t lose them, use them, or forget they have them between now and then. There is no big profit to be made trying to sell these stamps to people who didn’t take “advantage” of the forever stamp. There’s no major gain to be made by saving them to “beat” the next price hike.

    Need stamps? Buy them, use them, get on with your life.

  34. If you think that the Lady Liberty Flag stamp with no value printed on it is a forever stamp, you’re wrong. Despite not showing an exact value, it is worth 39c only, and as of June 2007, you have to add a 2c stamp to make it valid:
    https://hdusps.esecurecare.net/cgi-bin/hdusps.cfg/php/enduser/std_adp.php?p_faqid=2556&p_created=1060975374&p_sid=hYCXEevi&p_accessibility=0&p_sid=XHtHwzBi&xssl=1%3Cbr%3E%3C/a%3E

    The first forever stamp ever printed in the United States is selling for 41c today, and they have the word “FOREVER” printed on it. If that word is not on your stamp, you do NOT own a forever stamp, period.

    Of course you can’t save money by buying a large amount of forever stamps today, because the USPS price increase is actually below the inflation:
    http://www.slate.com/id/2166475

  35. I bought two rolls of Crops in the spring and I’ve been using them ever since. I probably go through 20 stamps a month or so and nothing’s ever been returned or refused. But I got told yesterday at the post office that I should have been putting a 2 cent makeup stamp on them. So.. if the stamp doesnt say “Forever”.. it aint.

  36. Said “TD” on June 20, 2007: “If you think that the Lady Liberty Flag stamp with no value printed on it is a forever stamp, you’re wrong. Despite not showing an exact value, it is worth 39c only, and as of June 2007, you have to add a 2c stamp to make it valid.”

    Assuming that’s correct, I think the USPS would find themselves in a difficult position if they wanted to take a “hard line” and insist that a stamp is only worth a certain amount when the value isn’t printed on the stamp.

  37. “I plan on buying a few hundred “forever” stamps just before the next rate hike, but not more than I could use in a year. This lets me maximize the benefit of beating a rate hike, but doesn’t lock me into an “investment” that merely stays the same as inflation.”

    So, assuming the annual postal rate hike is 1-cent (as it is this year), your investment will return a whopping (200 x 0.01 = ) $2.00, which (assuming you use these stamps evenly over the next year) is a only a 1.22% return. You could do far better than that by leaving the money in almost any money-market account. Even 90-day treasuries are returning 2.56% today.

    This is another case of false economy (for the consumer) and a royal rip-off by the post office.

  38. I am a 17yr employee of the postal service and I can tell you that if your letters are going through without the correct postage it is due to one or two things. I sort the mail and because I work in the back, I do not keep up on all of the stamps like I did when I worked the counter. Most clerks recognize them, some of the older clerks do not have a clue.

    When we recognize that the letter is short paid, we put separate it as postage due. The letter carrier picks up their keys and other accountable items and 9 times out of 10 your letter carrier is paying the short-paid amount. The carrier would rather pay it and be done with it than knocking on the door, waiting for someone to answer, then dig in their purse etc. The carriers are on time constraints and if they have to knock on every door to collect 2 or 3 cents, they will never make it back off the street.

    Also, a lot of companies have postage due accounts and if something comes in short-paid, it may be deducted from the account. It makes sense for them because instead of your mortgage payment being returned for 2 cents and ultimately becoming delinquent and being assessed late fees, they just pay it.

    Most people, however, do keep up with the correct postage. The forever stamp is new and not very bright. The newer, more popular stamps are easily visible for us and we can see the value of the stamp posted on it. Rather than bother, most employees just let it slide. It is not smart to do, because gasoline costs a great deal and the company is losing revenue.

    Lastly, the post office is not subsidized by the government and the company cannot operate with a huge profit, the sale of postage and the sale of ‘bulk mail’ is what sustains the postal service.

  39. quite interesting that you took the time to graph price increases and run survey all price adjustments.

  40. While this post might lead to me losing the “bargain” than I currently get, you are able to go on e-bay and purchase “postage lots” that sell stamps of rates that are currently not being used for less than face value (ie 29c and other odd denominations). There is then the issue of getting the additional odd denominations to make up the difference but you can usually get these lots for anywhere from 5 to 10 percent under face. This can definitely be worth your while if you need a lot of postage.

  41. Oh how stamp-hoarding penny pinchers loathe people like me who dive into the couch cushions to recover mangled, grime-encrusted stamps and then plaster the envelope – borrowed from a neighbor – with a ridiculous number to ensure the correspondence reaches its destination.

    Those extra stamps could have made you $0.18 in the year 2064.

    I can feel you cringe.

  42. I don’t really agree with this. I mean, the forever stamps appreciate at the rate of inflation + a little bonus if you buy right before the increase?
    There are a lot of places you can put your money that should do better than inflation (or so I hope, or I’ll probably never retire), and therefore a lot better than forever stamps.

  43. Why go and stand in line at the Post Office for a lenghth of time when one can buy stamps via mail.
    I’ve done this for years. At the onset, pick up the special envelope from the P.O., maybe a few, to keep on hand. Whenever the stamps run out just fill in your information, along with your check, mail it in to the P.O. and within 4 – 5 days time they will be delivered to your home with your regular mail. (The envelope is paid for by the P.O.) They in turn will supply an add’l envelope each time with the return stamps. This works for me very well. I just be sure to requisition stamps before I run out.
    Simple. No problem at all!

  44. I just had a single page letter stamped with a ‘USA First-Class’ Forever stamp, returned with the note “Return to Sender postage due 2c.”
    So much for ‘Forever’

  45. A “First Class” stamp IS NOT A FOREVER STAMP.

    If it doesn’t say FOREVER on it, then it does have a fixed value, whether printed or not. I once had my rent check returned to me because of this.

    My disgust for the USPS has only increased since then. In fact, “delivery confirmation” confirms that I received a package from them last Saturday… except I didn’t.

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