New postage rates divide by 5, and it’s not just a coincidence

By Michael Baadke

Everyone noticed that the Jan. 27 jump in the United States letter rate, from 50¢ to 55¢, was pretty substantial.

But it’s not just because the U.S. Postal Service is trying to get more money. According to the USPS, it’s also trying to make your postage calculations a little easier.

And in the end, this change to its pricing structure might reduce the frequency of letter rate increases.

The most common U.S. first-class letter rates are now intentionally divisible by 5¢. This includes the first-class letter rate (now 55¢), the additional extra-ounce rate (15¢), the nonmachineable surcharge rate (70¢), and the postcard rate (35¢).

“The Postal Service is deliberately setting the Stamped Letters, additional ounce, and nonmachineable surcharge prices at round numbers divisible by five, to better achieve the ‘simplicity of structure’ called for by Section 3622(c)(6),” according to the United States Postal Service Notice of Market-Dominant Price Change filed Oct. 10, 2018, with the Postal Regulatory Commission.

“This should facilitate convenience for retail customers, for whom a straightforward, understandable pricing structure is more important than it is for commercial customers, who do not rely on stamps.”

The citation of Section 3622 refers to the United States Code as it relates to the enactment of the 2006 Postal Accountability and Enhancement Act.

The section of the code cited counsels that the Postal Regulatory Commission shall take into account “simplicity of structure for the entire schedule and simple, identifiable relationships between the rates or fees charged the various classes of mail for postal services.”

The Postal Service has conceded that this deliberate change in its pricing structure required it to apply “a substantial amount of this year’s pricing authority to Stamped Letters.”

However, the USPS also said that it intends to continue this simplified structure for retail customers into future years, “meaning that Stamped Letters may not see an increase in every price case,” subject to prevailing business conditions.

Postal customers in the United States have become accustomed to changes in the letter rate nearly every year, with the cost of forever stamps usually going up either 1¢ or 2¢.

Another result of the changes in first-class mail prices is that heavier pieces and nonstandard-shaped pieces will now cost less to mail, according to the Postal Service.

“Thus, for example, many holiday cards and invitations will be sent at a less expensive overall rate than before,” according to the filed notice.

Special thanks to Linn’s contributor Larry Rosenblum for providing the information that led to this article.  

Connect with Linn’s Stamp News: 

    Sign up for our newsletter
    Like us on Facebook
    Follow us on Twitter