Sunday, November 27, 2016

Never Stamps: A $3.5 Billion Postal Subsidy

Nov. 30 update: Linn's Stamp News quoted a postal official as saying that the "breakage" for Forever Stamps is only $2.4 billion, not $3.5 billion. So somehow I must have misinterpreted one of the USPS's obtuse financial reports from previous years. The official's statement means that nearly half of that breakage was recognized in the three years since the previous time the USPS adjusted its calculations -- which suggests that postal officials either underestimated Americans' lack of organization or their passion for stamp collecting!

Way to go, Americans: Your sloppiness, forgetfulness, and hoarding are helping to prop up the struggling U.S. Postal Service.

Based on new data about its customers’ behavior, the USPS recently added $1.1 billion to its estimate of how many Forever Stamps it has sold that will never be used for postage. These “Never Stamps” now total about $3.5 billion, according to a Dead Tree Edition review of previous USPS financial reports.

That’s out of $48 billion in sales from the Forever Stamp’s introduction in April 2007 until the end of Fiscal Year 2016 on September 30, the USPS reported (page 16 of this PDF).

In other words, for every 14 Forever Stamps sold, one will be – or already has been -- eaten by the dog, dropped into a mud puddle, accidentally thrown out, lost in the seat cushions, hopelessly stuck to another stamp, left in that pairs of jeans in the washer, used in an art project, placed into a stamp album, or otherwise diverted from becoming postage.

When you buy a sheet of stamps, the Postal Service treats the money as “deferred revenue”: It gets the cash immediately, but accounting rules say it can’t book the money as actual revenue until the stamps are used to send mail.

The USPS, however, has no way of knowing when those stamps are used or when they become unusable, so it calculates a “breakage factor” that estimates how many stamps have been lost, destroyed, or placed into collections. The USPS didn’t release details of its latest breakage-factor calculation, except that it was based on a revised “estimation technique” using “new information regarding customers’ retention and usage habits of applicable postage.”

But I’d say it means you need to check the nooks and crannies of your desk, scour your purse, and shine a flashlight under the driver’s seat for Never Stamps that could become Forever Stamps. Or maybe you should just take the patriotic route and not bother, knowing that your carelessness is helping to support an iconic American institution.

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michaelejahn said...

When I purchase 10 sheets of Jimi Hendrix stamps, I had absolutely no intention on using them for mailing anything.

Collectors do this sort of thing ALL THE TIME.

I guess I am totally confused as to why there is some confusion about "unused stamps"

There have ALWAYS been "Never Stamps"

D. Eadward Tree said...

Thanks for pointing this out. The article does reference collecting as one cause of "breakage" (stamps never being mailed), but perhaps downplays it too much. I may have underestimated the interest in collecting new Forever Stamps. If the Postal Service's models include an estimate for Forever Stamps that are purposely kept out of the mail by collectors, it hasn't shared that with the public. (By the way, is it true that when you lick one of those Hendrix stamps, you get a little hit of Purple Haze on your tongue?)

Anonymous said...

Why would you lick a stamp, Grampa?

Peter said...

I work for them and I stopped mailing things years ago. I have a book of Christmas forevers and flag forevers that may never be used. Probably millions of people by a book, use 1 or 2 and forget the rest. Mail is a thing for old folks.