Why can't the USPS use simpler mathematics? Stamps and price

As of January 8, 2006, the price of first class mail sent via the U.S. Postal Service takes a slight jump from $0.37 to $0.39. Percentage wise, it's not a big jump (do the math yourself if you really must know), but pain-in-the-posterior wise, this latest $0.02 jump is yet another confirmation that the U.S.P.S. is not a very consumer friendly organization.

For years people like myself have railed that the U.S.P.S. should be smarter about their price increases for stamps. When the price went from $0.32 it was suggested that we should just jump to the next "round" number. Of course that didn't happen, and along the way we stopped off at the $0.37 price point. We stayed there a few years, until -- of course -- the U.S.P.S. starts crying that they need more revenue to cover costs (which admittedly do have to be covered, especially given the high costs of fuel for the U.S.P.S. fleet) and then the prices are raised again.

I understand that the U.S.P.S. is stuck between the proverbial rock and hard place here. If they raise prices too much, they irritate customers, and worse, they start stockpiling revenue that their employees start looking at and lusting after, and it just feeds a perpetual cycle of increased prices to cover increased salaries. They also have to deal with (going by memory, so I may be off in the details of the process) an oversight board for stamp price increases that won't let them raise the prices too quickly.

Yet... there are people like myself and others that look at the U.S.P.S. and think they have got to be totally freaking clueless when it comes to stamp prices. If they would raise their prices to amounts that are divisible by nickles or dimes, it may cost us a bit more, but they could then hopefully stockpile the funds for a while and have the cash around during leaner times that would help delay future increases just a bit longer. It would make transactions for stamps a little smoother since customers wouldn't need to fish for pennies or accept them in change when purchasing postage. It would make the math simpler for the customer service people at the U.S.P.S. and for everyone else as well.

Unfortunately my postal service utopia continues to seem unattainable. Maybe next time, but then again what are the chances that the next price increase will only be $0.01, and not something higher? Probably somewhere between slim and none. { frown }
1,212 views 9 replies
Reply #1 Top
OOops, forgot to put the additional $0.02 postage on that article, better catch it before it's returned for additional postage.
Reply #2 Top
For the same reason that things cost "$9.95". You would figure that everyone would look at that and think "$10", but they don't. Market research learned a long time ago that, you can get as close as you want to the next "round" number, but in the mind of the average consumer, raising the price to "$9.95" is ok, but "$10" is outrageous.

If you really look at it, the penny has been so trivialized that if everything was rounded up to the next nickel, no one should notice (and pennies could be retired). However, we know from the "$9.95" thing that psychologicaly, the idea would be rejected.

So there's you answer (parated2k style). It isn't that we can't afford to pay 40 cents for a stamp. It isn't even that we don't consider the service worth 40 cents. However, to cross that "round" number line might outrage people enough to fight the increase.
Reply #3 Top
For the same reason that things cost "$9.95". You would figure that everyone would look at that and think "$10", but they don't. Market research learned a long time ago that, you can get as close as you want to the next "round" number, but in the mind of the average consumer, raising the price to "$9.95" is ok, but "$10" is outrageous.


I actually learned just the opposite in my marketing courses back in college. The idea that consumers fall for that is false and outdated, although businesses still use it.

Terpfan: I just get frustrated because they want you to buy, buy, buy stamps even when they know a rate increase is coming up soon. I still have a bunch of old stamps left over from Christmas time to use up, which leaves me in a weird situation.

I'll still have to use my old stamps, but I'll have to either be wasteful and add too much postage (using what I already have, including postcard stamps) or go back to the post office (a HUGE pain in the ass around here) and see if they have some 2 cent stamps I can buy.

I agree, too, that it would be better to raise it by more than in necessary and put the excess funds back so that consumers aren't having to switch over as frequently.
Reply #4 Top
I think there's another side to it as well. When people purchase postage, they often do it in even dollar amounts. Many postage machines offer "packages" in even dollar amounts, and those who purchase at those machines find themselves with a number of 1 cent and 2 cent stamps that, in all likelihood, will never be used. Like "collector" stamps, these unused stamps represent extra revenue for the USPS, as the purchase price is paid for the stamps, but the service is never actually used.
Reply #5 Top
Many postage machines offer "packages" in even dollar amounts, and those who purchase at those machines find themselves with a number of 1 cent and 2 cent stamps that, in all likelihood, will never be used.


Man, I wish those people would send those stamps to me.
Reply #6 Top
When I heard it was going to go from $.37 to $.39 I thought "why not $.40?!" Oh no, they couldn't raise it $.03 instead of $.02. That would just be too much, right? I bet if they took any sort of poll they would find out that people would much rather have and even postage amount. Maybe they are just trying to challenge people's math skills
Reply #7 Top
I actually learned just the opposite in my marketing courses back in college. The idea that consumers fall for that is false and outdated, although businesses still use it.


I hope business catches up with the idea that its outdated, I think it's stupid. Although I've noticed that a lot of people say "$9", not "$10" when it's "$9.95"...unless they say the whole price... So I can't say it doesn't work.

Many postage machines offer "packages" in even dollar amounts, and those who purchase at those machines find themselves with a number of 1 cent and 2 cent stamps that, in all likelihood, will never be used.


This could be true. I've never bought stamps from a machine.
Reply #8 Top
Actually, the reason business started charged odd numbers like $9.95 instead of $10 was to force their employees to ring it up and make change instead of sticking the ten in their pockets.

As for the postal increase, yeah they really should just have made it $.40 and make life easier for all of us. As for me, I'm going back to carrier pigeons.
Reply #9 Top

For the same reason that things cost "$9.95".

No, the Postal service has no competition, and hence no reason to use the $1.999 trick (gas companies thought that one up back when gas was 25 cents - excuse me, 24.9 cents per gallon).

And indeed, I have started direct debiting most of my regular payments.  I am down to less than 10 checks per month.  2 of which are to an evil morlock that sucks the life out of everything human and decent, but I digress.

I never mail USPS, even tho it is probably cheaper in some cases (just a hell of lot more inconvenient).

Like the buggy whip, it is only a matter of tiem.  They are dead, just not burried yet.