"Stock Up?" Really? For a Penny Increase?

Time to stock up on Forever stamps

Sigh, first class postage has gone up from 41 cents to 42 cents. That really doesn’t impact me, since I mail maybe two or three things a month (thanks to online bill pay — something that hasn’t always served me well).

The postal service did something interesting… they offered a “forever stamp” that can be used at any point in the future. So, paying 41 cents NOW is a hedge against future cost increases.

But does that mean you should have hoarded stamps and bought in bulk? This reminds me of classic non-Lean purchasing department behavior — we got a great deal, so we bought a ton of them. OK, at least stamps can never go obsolete, so that risk is eliminated here with stamps. And, stamps don’t take up much “home warehouse” space in a drawer, so that isn’t a huge problem.

Let’s assume you mail 20 items per month. That’s 240 per year… you’d save a whole $2.40 a year by “stocking up” now (spending $98.40 on stamps). That money, kept in a bank account that earns 3% a year, would earn you $2.95.

What if you bought 30 years worth of stamps? That’s a complicated calculation, depending on assumptions of inflation rates, generally and for stamps, over time. This article, from the last increase (from 39 to 41 cents), shows how, historically, the price of stamps has actually GONE DOWN when you consider the value of money over time.

My gut instinct tells me the “stock up” plan probably isn’t going to save you much money unless you mail a TON of letters (such as a small business).

Who is benefiting from the “stock up” plan? The United States Postal Service:

The post office sold $267,696,023 in Forever stamps in March, up from  $207,900,132 in February and $115,303,031 in January.

Now, they probably “pulled ahead” sales from future months, but that’s a nice cash flow difference for the USPS, getting that money now rather than later.
Don’t get me wrong… even if a 30 year buy of stamps doesn’t make sense, I’m not encouraging “single piece flow” of stamps. It doesn’t make sense, from a total cost standpoint, to drive to the post office (or bank or grocery store) every time you need one stamp. Don’t believe someone who says it would be “Lean” to do so, if “Lean” means low inventory. Low inventory of stamps would be traded off by the cost and time involved with driving to the store. Gas… now that’s something that’s REALLY going up in price more than stamps.
Did anyone stock up on stamps? If so, what was the economic case for doing so? Or did you just buy a pack of 20, as normal?



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Mark Graban's passion is creating a better, safer, more cost effective healthcare system for patients and better workplaces for all. Mark is a consultant, author, and speaker in the "Lean healthcare" methodology. He is author of the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, as well as The Executive Guide to Healthcare Kaizen. His most recent project is an eBook titled Practicing Lean that benefits the Louise H. Batz Patient Safety Foundation, where Mark is a board member. Mark is also the VP of Improvement & Innovation Services for the technology company KaiNexus.

4 Comments on ""Stock Up?" Really? For a Penny Increase?"

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  1. Matt says:

    Changing stamp rates also reminds me of a time when my dad would stand in line for 15-20 minutes to buy a $0.01 stamp, just to make that markup. I know he was making more than $0.04/hr those days. Just put another stupid stamp on it and let it go! Talk about the waste of waiting!

  2. Anonymous says:

    My old realtor (they work completely on referrals) sent out a mailing with 10 1-cent stamps. It was very inexpensive on their part, but a nice thoughtful gesture to their clients (and a way of remembering them if I knew someone who needed a realtor). Nice marketing approach.

  3. Tom says:

    We were at Costco two weeks ago, when my wife says to me; “We need to buy another roll of stamps(100) because the cost is going up.” We currently have about 70-80 stamps from the last roll. Luckily I didn’t have to resort to any lean talk to convince her we could afford the extra $1.00 when it came time to get a new roll. :-)

  4. mike says:

    I wouldnt hoard more than a month or two supply of these stamps right now, its better to get interest on teh money than save a tiny bit on stamps in teh long term.

    If i neeeded to buy stamps now i would definitly buy those because it would save on having to go back and buy those stupid 1 cent stamps.

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