Why does the post office sell 42 cent stamps? Why do people buy them?

June 2, 2008 11:25 AM

Why does the post office sell 42 cent stamps? Why do people buy them?

The US Postal Service sells "Forever Stamps", at 42 cents apiece. These are supposed to be valid first class stamps forever, even if the price of a new first class stamp increases beyond 42 cents.

However, it also sells 42 cent stamps, at 42 cents apiece. If the price of a new first class stamp goes above 42 cents, these can only be used in addition with other stamps, making up the price difference.

Why do they sell 42 cent stamps?

I understand that the answer may simply be "Because people might buy them instead of Forever Stamps, and the Post Office makes more money, in the long term, if they do."

So why would people buy them?

Is there any reason, other than being a stamp collector, or reasons like ignorance or carelessness?

posted by Flunkie to grab bag (72 comments total)

Sometimes people buy stamps because they like the design or because it's relevant to what they're mailing ... birthday stamps for birthday cards, love stamps for wedding invitations ...
posted by robinpME at 11:34 AM on June 2

I think the Liberty Stamps are booooring. But I have a stash. I'm holding them for later on, when I'm out of regular stamps, because they're good forever. I'd rather buy a small number of and use up 42s while the price is 42.

I'd rather have Liberties stashed around than 42s. Last week, hell, I found a bunch of 37s and 32s that have been sitting for who knows how long.
posted by cobaltnine at 11:39 AM on June 2

The post office sells them because they still have them.

People buy them because they still have one-centers lying around from when the price last changed. It's kind of a hot dog, hot dog bun situation.
posted by shownomercy at 11:41 AM on June 2 [2 favorites]

Agreed. I've bought a bunch of denominated stamps because I liked the designs, despite the availability of the "forever" variety. I go through them quickly enough that the extra expense is minimal, and now that postal increases are predictable I can always buy Forever stamps if a rate hike is imminent.
posted by Johnny Assay at 11:42 AM on June 2

In my case, the post office always seems to be out of forever stamps.
posted by dirigibleman at 11:43 AM on June 2 [1 favorite]

I haven't bought them, but I was in a situation this weekend where I might have. See, I have some of the Forever stamps, but needed to mail something that would cost about $1.20 to send first class. I wasn't sure what the actual value of a forever stamp is if you want to use multiples, so I would have been tempted to use stamps with an actual value printed on them.
posted by drezdn at 11:58 AM on June 2

In respone to drezdn's issue: "Customers can use Forever Stamps for international mail, but since all international prices are higher than domestic prices, customers will need to attach additional postage. The value of the Forever Stamp is the domestic First-Class Mail letter price in effect on the day of use."

So it seems that, yes, you can use Forever Stamps in combination with each other or with denominated stamps, if you need to send something that costs more than the usual first-class one-ounce rate.
posted by DevilsAdvocate at 12:08 PM on June 2

Because the post office was closed and their automated vending machine doesn't sell forever stamps, just 42c stamps. Bastards.

What I can't understand is why all stamps aren't forever stamps. It's 2008 and they're only just now starting to offer a stamp that mails a letter?!?

As for the real answer to your question, I'm guessing it's backwards-compatibility with entrenched users who don't know and don't care about the newfangled system, they just want to keep doing things they same way they've always done them.
posted by -harlequin- at 12:08 PM on June 2

If you're going to use a stamp right away and you like a 'normal' design, there's no reason to buy a forever stamp.
posted by Solon and Thanks at 12:11 PM on June 2 [1 favorite]

People buy 42 cent stamps and other denominations of stamps because they mail objects other than first-class letters.
posted by gyusan at 12:13 PM on June 2

Probably because their infrastructure is still and probably forever dependent on monetary value. The forever stamp is pretty much only for the residential first-class sender, not for everything else the post office handles.
posted by damn dirty ape at 12:17 PM on June 2

In my case, I'd like a couple Frank Sinatra stamps for my collection. How dare they raise the price of postage the week after this stamp was issued, consigning Frankie to the dustbin of postal history?

Hmm .. the Post Office is still selling the Forever stamp for 42¢, instead of the current First Class price of 43¢? Some bureaucrat at the top is losing USPS money for that decision (or maybe they didn't get the memo at your local PO).
posted by Rash at 12:19 PM on June 2

The current first class price is 42 cents.
posted by dirigibleman at 12:32 PM on June 2

What I can't understand is why all stamps aren't forever stamps. It's 2008 and they're only just now starting to offer a stamp that mails a letter?!?

They've always offered a single stamp that mails a letter; I'm not sure what you mean. Why didn't they offer a "forever" stamp before? I'd say because the cost to the USPS increases over time so it's not necessarily a good business decision. I think they started offering it now for two reasons -- (a) this is a good way to get a relatively high influx of money (relative to normal inflows from stamp purchasing) from people stocking up on forever stamps, and (2) stamp price increases have been more frequent lately (or at least seemed like it) and this is a bit of a PR move.

As for why people don't buy them, I saw an article somewhere a few months ago doing a breakdown of the cost to buy a whole mess of forever stamps, vs. what you could do with the money (invest, etc) relative to expected mailing price increases. Financially, according to what I read, it made more sense to save your money. (However, that was before the skyrocketing gas prices, so who really knows how fast the price of stamps will start to rise...)
posted by inigo2 at 12:33 PM on June 2

The "forever" stamps are convenient, but don't actually save you money.

As I understand it, there's a federal law in place that prevents the price of stamps from growing faster than the inflation rate of the US$. I'm pretty sure that means that as time goes on, the US dollar is valued at less and a stamp costs more, but the stamps will (in value) be the same or cheaper than they are now.

If you google "forever stamp inflation" there are a good many articles about this.
posted by Zephyrial at 12:40 PM on June 2

The post office sells them because they still have them.

I seriously doubt this. Forever Stamps have existed for significantly longer than 42 cent stamps have.

People buy 42 cent stamps and other denominations of stamps because they mail objects other than first-class letters.

That doesn't seem like a terribly good explanation either. Forever Stamps and 42 cent stamps are, by far, the two most prominent types of stamps sold. This seems unlikely to be mere coincidence.

As for why people don't buy them, I saw an article somewhere a few months ago doing a breakdown of the cost to buy a whole mess of forever stamps, vs. what you could do with the money (invest, etc) relative to expected mailing price increases. Financially, according to what I read, it made more sense to save your money.

I am not asking "why don't people stock up hordes of Forever Stamps". I am asking why they buy 42 cent stamps instead of Forever Stamps. If you're out of stamps, you can go down to the Post Office and buy a book of twenty 42 cent stamps. This will cost you $8.40. Or you could buy a book of twenty Forever Stamps. Doing the latter will cost you exactly the same amount, have a theoretical benefit, and (seemingly) have no drawback.

(paraphrased from several posts) 42 cent stamps are prettier

Why doesn't the Post Office just sell a bunch of pretty Forever Stamps, instead of one type of Forever Stamps and a bunch of pretty 42 cent stamps?
posted by Flunkie at 12:48 PM on June 2 [1 favorite]

People who buy forever stamps are the ignorant ones, since the price of a first class stamp (now at 0.42) cannot grow more than inflation. Essentially you're buying a stamp that will be more expensive as time goes on. The Explainer at Slate described this well.
posted by OmieWise at 12:49 PM on June 2

The "forever" stamps are convenient, but don't actually save you money.

If you use stamps like a normal human, yes, they certainly do. Or, at the very least, have the potential to, without the potential to lose you money.

It's not much, and again, I'm not saying that you should go out and "invest" in huge swathes of them, but if you're buying a book of stamps anyway, "Forever" and "42" will cost you exactly the same amount. You are spending that money anyway. If you happen to not use them all by the time of the next hike, you have saved money. If you don't, you lose nothing.

If you google "forever stamp inflation" there are a good many articles about this.

I have seen articles like this; every one I've seen has been written from a point of view that I am not asking about: i.e. "Why shouldn't I go out and buy a lifetime's supply of Forever Stamps right now". That's not relevant to my question.
posted by Flunkie at 12:52 PM on June 2

People who buy forever stamps are the ignorant ones, since the price of a first class stamp (now at 0.42) cannot grow more than inflation.

This argument assumes that you are hoarding them as some sort of investment. That is not what I'm talking about. I'm talking about why people buy 42 cent stamps instead of Forever Stamps.
posted by Flunkie at 12:54 PM on June 2

Because people aren't perfectly rational economic beings.

Sometimes we'd rather risk spending an extra $0.01 to have hearts, flowers, scientists or Yoda on our correspondence.

Pretty trivial compared to the massive price gaps you'll find in the stationary that's contained within the envelopes.
posted by Project F at 1:08 PM on June 2

Sometimes we'd rather risk spending an extra $0.01 to have hearts, flowers, scientists or Yoda on our correspondence.

Right, so, no reason other than "pretty", "stamp collector", or stuff like ignorance and carelessness?

"Pretty" and "stamp collector" could easily be addressed if the Post Office just stopped selling 42 cent stamps entirely, and instead started selling a bunch of types of Forever Stamps.

So, back to the first question, essentially, the Post Office is selling one type of Forever Stamp and a bunch of types of 42 cent stamps, instead of just selling a bunch of types of Forever cent stamps, solely because it will make them more money?
posted by Flunkie at 1:16 PM on June 2

Flunkie, I think the disconnect is that you're only thinking economically. People like stamps.
posted by kittyprecious at 1:27 PM on June 2

I imagine the PO makes a non-trivial profit from people who, when the rate goes up, just slap two old-rate stamps on an envelope because they have the book of stamps on their desk. It's more convenient than making a trip to the PO, and then buying the appropriate number of 1 cent stamps etc. Some people don't know what a forever stamp is, and aren't interested.
posted by maniabug at 1:33 PM on June 2

Doing the latter will cost you exactly the same amount, have a theoretical benefit, and (seemingly) have no drawback.

I'll admit to being a person who buys $0.42 stamps rather than forever stamps. Why? I don't particularly like the design of the forever stamps. In fact, I rarely buy stamps at the post office; I prefer to go to usps.gov and buy a pane or two of interesting stamps--so I actually pay $8.40 or $16.80 + $1 to have it delivered. (I'm pretty sure most economists would say people as non-rational as me don't actually exist.)

It's not really a monetary issue. Or maybe it is; I value having cool stamps more than the extra $0.01 it costs me per stamp, stretched out over the year or so it takes me to go through a pane. I like the novelty of finding interesting stamps, I like the way they look on the envelope (particularly when sending cards or letters to people, but even for my boring bills--I like to imagine the person opening my credit card payment in South Dakota getting a smile out of Yoda), and if it's going to sit on my fridge for the better part of a year, why not have it be something I like looking at?

Why doesn't the Post Office just sell a bunch of pretty Forever Stamps, instead of one type of Forever Stamps and a bunch of pretty 42 cent stamps?

It costs money to have each pane designed (by actual artists), not to mention the costs of printing them all. Why should the post office spend more money to have different, pretty designs? The people that value the reliability of knowing that they'll never have the wrong amount of postage probably don't care much what the actual stamp looks like. Those that care about what the stamps look like--who see buying a stamp as a chance to get a little piece of sunshine in their life for the low, low price of $0.42--probably care less about having to slap another $0.01 stamp on there too. (Another chance to BUY PRETTY STAMPS!)

I can tell by this question that you're probably in the first group. Me, I've always wondered at the people who buy the rolls of 1,000 American flag stamps in the grocery store. I want to pull them aside and ask, "Do you know that you can get really cool looking stamps--practically tiny pieces of art, some of them!--for the same price as the most boring, banal stamp in existence? It doesn't cost more to get something like this or this. Why would you stick with American flags? I don't understand!"

But to each his own, I guess.
posted by iminurmefi at 1:33 PM on June 2 [8 favorites]

Flunkie, I think the disconnect is that you're only thinking economically. People like stamps.

No, it's not. Unless you want to explain to me why "people who like stamps" wouldn't like exactly as wide a variety of stamps labelled "Forever" as they currently have stamps that are labelled "42".

I guess my line of questioning was not clear. I apologize. Essentially, I am trying to figure out why the Post Office sells one kind of Forever Stamp, and a whole bunch of 42 cent stamps, instead of just selling a whole bunch of Forever Stamps.

The only reasons that I can think of are so that they can take advantage of stamp collectors, people who like Yoda, people who are unaware that there is no functional advantage to a 42 cent stamp, and people who just carelessly say "a book of stamps, please".

Note that I'm not saying so that they can satisfy such people. They seemingly could satisfy such people buy selling Yoda Forever stamps, instead of Yoda 42 cent stamps. But they don't. Why?
posted by Flunkie at 1:41 PM on June 2

Jimmy Stewart doesn't get printed on Forever Stamps.
(Echoing everyone above who has said people like different stamps.)
posted by phunniemee at 1:45 PM on June 2

And actually, now that I think about it a little more, they're not taking advantage of stamp collectors. Stamp collectors aren't going to be buying any 1 cent stamps in order to use the last of their Yoda 42 stamps. So the Post Office doesn't stand to gain from stamp collectors by having Yoda 42 instead of Yoda Forever.

So it's only non-collector Yodaites, the ignorant, and the careless that the Post Office is actually taking advantage of.
posted by Flunkie at 1:47 PM on June 2

Jimmy Stewart doesn't get printed on Forever Stamps.

Right. Why?
posted by Flunkie at 1:47 PM on June 2

Why do you keep characterizing people who buy 42 cent stamps as ignorant and careless? If my letter costs 42 cents, what is ignorant or careless about putting that exact amount of postage on the letter?
posted by gyusan at 1:50 PM on June 2

Maybe it's as simple as "because it's always been done that way." The new thing here is the forever stamp. I think the forever stamp is great because I only buy about one book of stamps a year (and then another book at Christmas, when I will want Christmas stamps, whether forever or not). My parents, though, use lots of stamps and they expect the stamps to have an amount on them. They won't buy forever stamps, just like they won't use Tivo. go figure.

Also: the postal service is a business, and they need to make money. The more stamps they sell at a higher sale price the better. The forever stamps are a marketing ploy for people like you and me, but they stand to make more money if they only sell amount stamps (assuming the same number sell). (Because I'm using my old forever stamps and now it costs a penny more; they've lost a penny.)
posted by dpx.mfx at 1:50 PM on June 2

Why do you keep characterizing people who buy 42 cent stamps as ignorant and careless?

I am not saying that all people who buy 42 cent stamps are ignorant and careless, and I apologize for having come across that way.

I'm saying that those are two possible explanations for why a person would buy a 42 cent stamp instead of a Forever stamp:

• Ignorance of the fact that there is a functional advantage to the Forever stamp, but no functional advantage to the 42 cent stamp, could lead someone to buy 42 cent stamps when they otherwise would have bought a Forever stamp.
• Carelessness, as in "A book of stamps, please", could lead someone to buy a 42 cent stamp where they otherwise would have bought a Forever stamp. In fact, I have done this myself.

I am not saying that "people who buy 42 cent stamps are, in a general sense, ignorant and careless".

I am not even saying "people who buy 42 cent stamps are ignorant or careless".

I'm saying those are two possible explanations for why someone would buy a 42 cent stamp.

And I'm aware there are other explanations: "I like the look of that 42 cent stamp", and "I am a stamp collector". I am not trying to disparage people who like the looks of a certain stamp, nor stamp collectors.

The thing is, all of these explanations could be done away with if the Post Office just stopped selling 42 cent stamps, and instead started selling Yoda Forever stamps, and Jimmy Stewart Forever stamps, and Mort Zuckerman Forever stamps.

The people who currently buy 42 due to not understanding there's a better choice would be satisfied, and in fact better served, by this.

The people who currently buy 42 due to not caring one way or the other would be satisfied, and in fact better served, by this.

The people who buy Yoda stamps because they like Yoda would be satisfied, and in fact better served, by this.

The people who buy Yoda stamps because they buy every type of stamp out there would be satisfied, although not better served, by this.

So, I'm trying to understand if there's any other reason why people buy 42 cent stamps instead of Forever stamps. Because, if not, the only reason that the Post Office doesn't make this change is to get their extra penny once ever year or two off of the people who fall into the first three categories.

Again, I want to stress that I'm not saying you're ignorant and careless.
posted by Flunkie at 2:00 PM on June 2

So, back to the first question, essentially, the Post Office is selling one type of Forever Stamp and a bunch of types of 42 cent stamps, instead of just selling a bunch of types of Forever cent stamps, solely because it will make them more money?

Yes, of course. The post office is a private company whose purpose is to make money for its owners. It's just more constrained by the government in how it can do that than the average business is. If people are willing to risk an extra 1 or 2 cents per stamp to get pretty pictures on them, then there's no reason not to "charge" them for it, just like clothing sellers charge extra for jeans that look nicer.

Why does Apple charge more for the black Macbook? Because people are willing to pay. Whether such people are ignorant, careless, or any other derogatory adjective you want to throw at them, it doesn't change that basic economic fact.
posted by dirigibleman at 2:01 PM on June 2

Oy, vey.

I am not intending to be derogatory.

I am aware that people are willing to pay more.

I am essentially asking if "people are willing to pay more" is the only reason that the Post Office doesn't stop selling Yoda 42 and start selling Yoda Forever. So when you say "Yes, of course", you mean, "Yes, I am certain that there is no other reason"?

And I now give up. I apologize once again for having caused offense. I intended none. Goodbye.
posted by Flunkie at 2:08 PM on June 2

Unless you want to explain to me why "people who like stamps" wouldn't like exactly as wide a variety of stamps labelled "Forever" as they currently have stamps that are labelled "42".

OK, I'll bite. The following is not a pun, just a failure of language: The "42" that you see on current postage stamps is also a kind of time-stamp; it puts the issuance in historical context and lets people who are interested in these things (I'm not one of them, but I can understand) when it was released (i.e., in this case, since May 2008). Also, some people find a small number a more aesthetically-pleasing part of the design than a big word.
posted by kittyprecious at 2:13 PM on June 2

Flunkie,

I understand that you weren't thinking of people who are hoarders when you wrote this question, but you still seem to think that Forever stamps are a "better deal" in the short term. They are not. What is true about the effect of inflation on 1000 Forever Stamps is true about the effect of inflation on 10 Forever stamps. Consequently, this statement of yours, "If you use stamps like a normal human, yes, they certainly do. Or, at the very least, have the potential to, without the potential to lose you money," is incorrect. Everyone who still has forever stamps bought at 41 cents has either not saved money or lost money on the proposition, since the rise to 42 cents cannot be larger than inflation by law. The math is pretty clear here.

I can tell from reading your comments that you're a bit frustrated that other people just aren't getting it, but you really seem to have started from a false assumption (Forever stamps are more economical) and proceeded from there, which appears to be clouding your thinking about this.
posted by OmieWise at 2:27 PM on June 2 [1 favorite]

flunkie: the forever stamps also have some customer education, and customer adoption issues that numbered stamps neatly avoid.

Given that the forever stamp is a relatively new development, I don't think any conclusions can be reached as to whether this is a transition period, or a "con".
posted by Project F at 2:31 PM on June 2

So, I'm trying to understand if there's any other reason why people buy 42 cent stamps instead of Forever stamps.

When I say backwards compatibility for entrenched users, I'm also thinking about things like small-business billing software and systems that were designed years ago to place orders and and so on using conventional stamps. I can't answer the question in that I don't know if such systems exist, but I'm under the impression that there is a rat's nest of different options and 3rd-party tools for dealing with mailings that are more than individual letters, and less than pre-paid automated-hotline-to-USPS-servers bulk. For example, if you can find such a thing as a machine that puts stamps on envelopes (for small businesses), then there is probably also plenty of accounting software that might be running behind it, designed around fixed-value stamps.

It's just a guess, and one you've probably already considered, so probably not much help, but it doesn't seem to be getting much bickering-time in here compared to what has already been rehashed, so I thought I'd give it a nod, just in case.
posted by -harlequin- at 2:34 PM on June 2

Sorry, if I'd seen your previous comment on preview, I'd have dropped the derogatory thing.

So when you say "Yes, of course", you mean, "Yes, I am certain that there is no other reason"?

I would say that I'm certain enough that I would be very surprised to hear that the people running the Post Office would choose to do something that would cost them money if they weren't mandated by the government.
posted by dirigibleman at 2:38 PM on June 2

I couldn't keep myself away.

I understand that you weren't thinking of people who are hoarders when you wrote this question, but you still seem to think that Forever stamps are a "better deal" in the short term. They are not

Yes, they are. If you are going to buy a quantity of 42 cent stamps, there is no situation in which the same quantity of Forever stamps is not at least an equivalent deal, and there are some situations in which it is a better deal.

It doesn't matter what quantity. X Forever stamps are always an equal or better deal than X 42 cent stamps, if you're going to buy X stamps for X first class letters anyway.

If you disagree, please name one such situation in which the 42 cent stamps are a better deal, and explain it fully.

Everyone who still has forever stamps bought at 41 cents has either not saved money or lost money on the proposition, since the rise to 42 cents cannot be larger than inflation by law. The math is pretty clear here.

People who still have Forever cents that they bought instead of 41 cent stamps that they would have bought anyway have saved money. More importantly, from my point of view, they've saved convenience. But they have saved money:

They spent the same amount of money as the people who bought 41 cent stamps. And they now have a few first class stamps, whereas the people who bought 41 cent stamps are a few cents shy of owning a few first class stamps.

When I said "if you use stamps like a normal human", I meant "if you buy a book or two of stamps whenever you're running low". Obviously if you buy one stamp at a time, whenever you need to send a letter, Forever stamps don't give you any advantage. And obviously if you hoard Forever stamps as an investment, you're crazy. I am talking about neither of those two things.
posted by Flunkie at 2:44 PM on June 2

Sorry, if I'd seen your previous comment on preview, I'd have dropped the derogatory thing.

No problem. Thank you.
posted by Flunkie at 2:45 PM on June 2

I will chime in as someone that the Post Office certainly makes money on because of all the recent increases. We still have quite a few 41 cent stamps and thanks to the increase and the lack of 1 cent stamps it is simply more convenient for me to stick a 24 cent or 37 cent or whatever is in the bottom of the drawer on the letter in addition to the 41 cent stamp. We live a long way from the Post Office and inevitably I always forget to make that stop when I'm in town so if I decided to go at the moment I needed to send a letter, the gas cost to get there and back would be prohibitive. Whether this is any motivation I don't know.

As for your actual question about why the Post Office does not revamp the way they sell stamps to simply remove "locked-in value stamps" and address the concerns of collectors and people who like pretty pictures, my guess is that currently they are experimenting with the new "Forever Stamp" market and probably not prepared to make that kind of transition that would likely confuse those that are used to "the way things are." But I am certainly in the camp of those that truly wish they would. I don't use stamps fast enough to keep up with the increases but I also don't hoard stamps forever either. Ideally I'd like to be able to buy a pack of "1st Class Stamps" in different designs and not be concerned at all with actual "value amounts" tied to those stamps.
posted by genial at 3:53 PM on June 2

1. USPS makes both kinds of stamps because it makes money on stamps that are purchased but not used. Lots of money. Purchasing 42 cent stamps for any reason is good for USPS, because just in case you get stuck with some and don't use them, then cha-ching! In this day of online bill-pay and email, USPS needs to make money however the heck it can.

2. The reason people purchase 42 cent stamps instead of Forever stamps is varied:

- A. Ignorance: some people don't realize that forever stamps exist.
- B. Collectors: buy stamps to hold onto regardless of price.
- C. Aesthetics: people hate ugly Forever stamps, and would rather risk the extra penny by putting Iron Man on their correspondence; or they love Charles Chestnutt; or think Sinatra is a-ring-a-ding-ding.
- D. Precision: if you know exactly how many stamps you will use in a given period of time, it doesn't matter whether you purchase 42 cent stamps or Forever stamps, so you buy 42 cent stamps.
- E. Special Occasions: you are sending love letters or wedding invites or holiday cards, so you use specialty stamps.
- F. Apathy: you just don't care whether you might be losing a penny, or are getting ripped off, you just buy whatever is put in front of you.
- G. Supply: your stamp store is out of forever stamps, or doesn't sell them.
- H. Support for a Cause: you buy stamps that support a special cause (like breast cancer awareness).
- I. Any combination thereof.

The last time I bought non-forever stamps was for my Christmas cards. If they made Forever Holiday Stamps, I'd be stoked, but then the Post Office wouldn't have made like $1.23 off of me.
posted by jabberjaw at 4:06 PM on June 2 [3 favorites]

If you disagree, please name one such situation in which the 42 cent stamps are a better deal, and explain it fully.

I thought about this a lot on my run (right after my last comment), and I came up with two issues that I think are clouding the discussion: the framing of this question, and a misapplied standard for value.

I already mentioned the first issue, but I'll reiterate that the framing here begs the question. Were the question framed as "Which is a better value, forever stamps or face value first class stamps?" I think it would be easier to discuss both sides dispassionately. There are, indeed, reasons to buy forever stamps, but they are not simple dollars and sense economical. Face value stamps are always either worth as much or more than Forever stamps. (I'll provide an example below.)

Which brings me to the second issue: misapplied value. Because of what you've written here I think (although I'm not sure) that you're using the wrong metric for value. It doesn't matter what the face value on a first class stamp is, what matters is how much the corresponding amount of money can purchase. This is why it was not until the past few months that gas prices, adjusted for inflation, hit record levels: because the buying power of ~$1.40 in 1981 dollars was greater than ~$3.10 in 2008 dollars. If you reverse the standard (replacing the dollar standard with a stamp standard) then it's hard to see what the effect of inflation is. (I think you're thinking that the price of mailing a letter gets cheaper and cheaper the longer you hold a forever stamp, but this is the opposite of how you should think about it.)

So, here is my example, for which I am going to posit several hypotheticals (since I'm no math whiz).

--On 1/1/2009 the cost of a first class stamp and a Forever stamp is $1, as is a tank of gas.
--You buy 1 Forever stamp at that price.
--Inflation for 2009 is 3%. Gas prices rise at the rate of inflation.
--On 1/1/2010 the Post Office raises the price of stamps to $1.02 in accordance with the very real law the Postal Accountability and Enhancement Act which mandates that first class stamp prices cannot rise faster than inflation.

Now, let's pretend that you were allowed to cash in your Forever stamp for money. Sweet!, you just got back $1.02, but you only spent $1.00 to buy the stamp in the first place. How psyched are you, you just made two cents?

But! that number is meaningless in and of itself. It only matters what it will buy you. When you tied up your cash in stamps, it would have bought you a gallon of gas, but now, despite the two cent increase in price of postage, the equivalent of a first class stamp only buys you .99 gallons of gas.

In other words, the short answer is that 42 cents right now buys less than or as much as 41 cents did when 41 cent forever stamps were first issued. We know this is true because the post office is not allowed to increase the price of postage faster than inflation. (There is a time when this is not true, which is right before the price increase, but since you're asking this question right after the increase, and since that's a specific moment in time, and not generally applicable, I've left it out of consideration.)

The irony here, is that, with all due respect, the Forever stamps are a racket, and they rely on the ignorance and innumeracy of the public. It's worth more the post office to have your 42 cents today, then to have it next week or next year, and it's worth more then to have 43 or 44 cents next year as well. Inflation makes the buying power of 43 cents next year, or 44 cents the year after, less than the 42 cents you pay for a forever stamp now. It's inflationary theater, almost precisely akin to the security theater of the TSA: it makes you feel as if you're saving money, but that very feeling is used to keep you from figuring out if you are or not. It's a bit shocking how even the people who aren't buying Forever stamps in this thread think that they should be.
posted by OmieWise at 4:50 PM on June 2 [3 favorites]

OmieWise, I'm sorry, but you're completely missing my point.

I've said this multiple times, in multiple posts, but I think you haven't caught it yet, so here goes again:

Forever stamps are a better deal than 42 cent stamps if you are going to buy stamps anyway.

Your scenario ignores this. Your scenario is equivalent to buying and hoarding a single Forever Stamp, for the purpose of having a Forever Stamp.

That is not relevant to the situation that I'm talking about. You are talking about hoarding, albeit of a single stamp. You are not taking into account the fact that I am talking about buying a Forever stamp instead of a 42 cent stamp.

I will repeat: If you are going to buy a number X of stamps, it is never worse, and sometimes better, to buy X Forever stamps, rather than X 42 cent stamps.

The situation you're talking about, where inflation comes into play, is something entirely different. Specifically:

In some situations, it is better to buy X 42 cent stamps now, and Y 43 cent stamps later, than it would be to buy (X+Y) Forever stamps now.

I don't deny that. But it's not relevant. To see why, please note that buying X Forever stamps now, and Y Forever stamps later, is never worse than X 42 now and Y 43 later, and in fact it is sometimes better.

Again:

If you are going to buy a certain number of stamps anyway, it is never worse, and sometimes better, to buy that number of Forever stamps, rather than that number of 42 cent stamps.

If you are going to buy a certain number of stamps anyway, it is never worse, and sometimes better, to buy that number of Forever stamps, rather than that number of 42 cent stamps.

If you are going to buy a certain number of stamps anyway, it is never worse, and sometimes better, to buy that number of Forever stamps, rather than that number of 42 cent stamps.

Inflation only matters if you are purchasing more Forever stamps than you would have purchased 42 cent stamps.
posted by Flunkie at 5:17 PM on June 2

Just to hopefully be more clear:

I asked you for a scenario in which buying a certain number of 42 cent stamps was better than buying that same certain number of Forever stamps.

You replied not with that, but with a scenario in which saving your money was better than buying a certain number of Forever stamps.
posted by Flunkie at 5:22 PM on June 2

And I'm not innumerate. I have multiple degrees in mathematics. I say this not to brag, nor because I am offended, but to help persuade you that your notion that people who buy Forever stamps are innumerate is mistaken.
posted by Flunkie at 5:24 PM on June 2

Now, let's pretend that you were allowed to cash in your Forever stamp for money. Sweet!, you just got back $1.02, but you only spent $1.00 to buy the stamp in the first place. How psyched are you, you just made two cents?

But we're comparing it to buying a $1 stamp. Like, you either buy a book of $1 stamps or Forever stamps. Flunkie specifically said that he is not talking about investing in stamps, but just buying the normal amount that you buy, like a book or two when you are running low. We aren't comparing buying Forever stamps to not buying any stamps until the moment you use them. The value of the $1 stamp is not invested somewhere, making money for you to counter inflation.

So if you bought a book of $1 stamps and a book of Forever stamps, you now have:

- A book of $1 stamps with the buying power of 97 cents in 2009
- A book of Forever stamps that are now worth $1.02 with the buying power of 98 cents

You got a better stamp value if you bought Forever stamps if you were already buying thowse stamps anyway.

If you had decided to hold off and invest your money, then yes, the Forever stamp would have been bad, but again, that is not what the question is about!
posted by kosmonaut at 5:44 PM on June 2

Face value stamps are always either worth as much or more than Forever stamps.

That's false. Counterexample:

I buy a book of twenty Forever stamps today, spending $8.40.

At the same moment, you buy a book of twenty 42 cent stamps today, spending $8.40.

I use 18 of my stamps to send 18 letters, and then the cost of a stamp is hiked to 43 cents.

You use 18 of your stamps to send 18 letters, and then the cost of a stamp is hiked to 43 cents.

I use my remaining two stamps to send two letters.

You purchase two 1 cent stamps, spending $0.02.

You use your remaining four stamps to send two letters.

We have sent the same number of letters. We both spent the same amount initially. You spent additional money later. I did not.

That's an example of a scenario wherein face value stamps are worth less than Forever stamps. This directly contradicts your claim that face value stamps are always worth as much or more than Forever stamps.

Now show me a similar scenario wherein face value stamps are actually (as you claim they can be) worth more than Forever stamps. I flatly guarantee that you won't find one.

(I'll provide an example below.)

Your example did not talk about face value stamps at all.

Your example is not comparing the value of face value stamps versus the value of Forever stamps. Your example is comparing the value of hoarding Forever stamps versus the value of hoarding your money.
posted by Flunkie at 5:52 PM on June 2

If you are going to buy a certain number of stamps anyway, it is never worse, and sometimes better, to buy that number of Forever stamps, rather than that number of 42 cent stamps.

I do understand your caveat, and I continue to think you're incorrect. The reason I hoarded and converted the stamp in my example is because there is no other way to address the fact that you're using a stamp standard and I'm (correctly) using a money standard. Hoarding or not, however, inflation is inflation.

"If you are going to buy a certain number of stamps anyway, it is never worse, and sometimes better, to buy that number of Forever stamps, rather than that number of 42 cent stamps."

This is precisely the opposite of what the law regarding postal rates and inflation mandates. That law mandates that a 42 cent Forever stamp will be never better and sometimes worse than a first class face value stamp. That's the meaning of the law and inflation. The only time when this doesn't come into play is right before the rate increase, but you've made it clear that that isn't what you're talking about. It doesn't matter why you bought the stamps, what matters is the relative buying power of your 42 cents. Even if you buy the Forever stamps for a lower face value, the economics of the law indicates that you will be making the best economic decision if you buy the stamps that have a face value rather than the Forever stamps, since postal rates may not keep pace inflation but will certainly not exceed it. Therefore, whatever you spend for a face value stamp today, that amount will have bought you as much or more as the previous amount needed to buy a Forever stamp.

In other words, if all of the stamps are used before a rate increase, it doesn't matter what you buy, and if some of the stamps are used after a rate increase, you may have lost money if you bought Forever stamps. Hoarding need not, and does not, apply.

If you think this is wrong, I'd love an explanation of how you are calculating the effects of inflation, because I think we must be operating from seriously different definitions here.

(Note that according to the Consumer Price Index calculator, the 41 --> 42 cent rise matches inflation in this case, which does not obviate my argument, since the Postal law makes inflation the ceiling.)

On preview: I replied with a scenario in which it was possible to illustrate the impact of inflation. I still don't understand why you think that inflation only matters if you plan to hold onto the stamps. Inflation is about buying power, and the law says that no matter what the face value of the stamp, the buying power of the money used to buy a stamp must be equal to or less than the value before the last rate increase. The money need not be invested ala kosmonaut, you get ALWAYS get a better or equal value buying a face value stamp. (Except in the special case right before the rate increase) This is the point of the Postal Accountability and Enhancement Act.
posted by OmieWise at 5:54 PM on June 2

Oh, shit, I didn't preview again. I've got to get dinner and think about your counterexample.
posted by OmieWise at 5:58 PM on June 2

I do understand your caveat, and I continue to think you're incorrect. The reason I hoarded and converted the stamp in my example is because there is no other way to address the fact that you're using a stamp standard and I'm (correctly) using a money standard

Yes, there is a way. kosmonaut just showed it to you.

You compared "Forever stamps" to "money standard". Good start.

Now continue: Compare "42 cent stamps" to "money standard" in exactly the same way.

You'll find that the 42 cent scenario works out to a lower amount of real purchasing power.
posted by Flunkie at 6:00 PM on June 2

That's an example of a scenario wherein face value stamps are worth less than Forever stamps. This directly contradicts your claim that face value stamps are always worth as much or more than Forever stamps.

Ok, quickly. I continue to think you're using a stamp standard when a money standard is more appropriate. It does not matter that you plan to send the letters anyway, inflation still applies.

While I have to spend two extra cents to send my last two letters, sending them has still not cost me more in real dollars than it cost you to send your letters. The point of inflation is that those two cents disappeared, that their buying power was absorbed into the general increase in prices. My counterexample would be that I only buy a stamp when I'm ready to send a letter, and in that case, even if the numbers break out exactly as you've written, we would have spent the same amount EVEN THOUGH I SPENT TWO CENTS MORE.

I agree that you've gotten a bargain here, but it's more apparent than real, even leaving aside the pittance that we're talking about.
posted by OmieWise at 6:06 PM on June 2

I know I'm not answering the original question, but I saw a comment upstream that forever stamps weren't such a great deal because postal rates are tied to inflation.

I'd like to propose the possibility that, in times of high inflation, the forever stamps could possibly be a reasonable hedge against inflation. While your dollars are devaluing, your stamp assets are presumably going to keep up with inflation (assuming the USPS increases their prices in line with inflation). If that's the case, then forever stamps could be a convenient (if bulky) way to hedge ones assets.
posted by zippy at 6:09 PM on June 2

While I have to spend two extra cents to send my last two letters, sending them has still not cost me more in real dollars than it cost you to send your letters

Think about what you're saying, here.

Let's say that, today, we are exactly as wealthy as each other. And, except for me buying a book of Forever stamps and you buying a book of 42 cent stamps, we take in the same income, spend exactly the same amount of money at the same moments, et cetera.

We spent exactly the same number of 2008 dollars on our stamps.

You spent more 2009 dollars than I did on our stamps.

We got the same amount of service out of our stamps.

Come 2009, I am two 2009 pennies richer than you, specifically because of how we have respectively spent our money on stamps. Do you deny this?

"Inflation" is a red herring here. Yes, inflation affects me. But it also affects you, and none of your posts so far have taken this into account.
posted by Flunkie at 6:13 PM on June 2

No, I don't deny it.

I see now that I have indeed been thinking of the Forever stamps as something that one keeps around (in even small quantities), versus (in my examples, in my mind) buying face value stamps as needed. In your scenario, you do indeed come out two (devalued) cents ahead, which kind of obviates your initial question, since there are a host of reasons why two cents might not mean enough to get someone to purchase forever stamps, given the other reasons to have face value stamps. I think my misunderstanding of your question came from your overstatement which made it seem like more than two cents (or 20) was at stake.

Inflation, however, is not a red herring, and my point is indeed that it applies to me. The point of the Postal Law is that the buying power of the money needed to buy a face value stamp today will never be more than the buying power needed to buy one last year. It might be less. There is therefore no need to buy forever stamps in any quantity. Your own caveats mean that there is no real reason to buy them at all all, given the additional choice and versatility in face value stamps.
posted by OmieWise at 6:27 PM on June 2

OmieWise.

I see now that I have indeed been thinking of the Forever stamps as something that one keeps around (in even small quantities), versus (in my examples, in my mind) buying face value stamps as needed.

Apples and oranges.

Yes, buying face value stamps as needed is better economically than buying Forever stamps in quantity.

But buying Forever stamps in quantity is better than buying face value stamps in quantity.

And here's the kicker:

Buying Forever stamps as needed is no worse than buying face value stamps as needed.

THEY BOTH COST THE SAME.

There is no scenario in which buying face value stamps is better than buying the same number of Forever stamps. None. Not one.

I'm not saying inflation is a red herring in general. I'm saying it's a red herring in relation to the decision to buy a Forever stamp versus a face value stamp.

Because THEY BOTH COST THE SAME.
posted by Flunkie at 6:32 PM on June 2

There is no scenario in which buying face value stamps is better than buying the same number of Forever stamps. None. Not one.

I'm not saying inflation is a red herring in general. I'm saying it's a red herring in relation to the decision to buy a Forever stamp versus a face value stamp.

Because THEY BOTH COST THE SAME.

Well, you've convinced me of your first point, but I think you're being a bit disingenuous with the rest. Forever stamps are marketed as something to buy a lot of so that you will not be caught by price increases, face value stamps are not. In addition, your question seems to suggest that the suckers are the buyers of face value stamps, when the truth is that people who buy Forever stamps, as they are presented (as something to buy in bulk), are more likely to give the post office more money than those who buy face value stamps as most people buy stamps (a book at a time). Note that one need not have designs on hoarding them, one could very reasonably decide to buy two years worth of Forever stamps, and still end up a sucker. (There's simply no reason to buy two years worth of face value stamps.)
posted by OmieWise at 6:46 PM on June 2

you're being a bit disingenuous

Let's back up here.

I asked my question because I want to know if there is any reason that the USPS wouldn't simply replace face value first class stamps with Forever stamps, other than "to make more money off of certain people".

For example, if there were a functional advantage to face value stamps that I am not aware of.

That's why I've constantly been saying "buying 42 instead of buying Forever", or "buying Forever instead of buying 42".

Forever stamps are marketed as something to buy a lot of so that you will not be caught by price increases, face value stamps are not.

This is completely irrelevant to the context of the question.

It is also, incidentally, completely irrelevant to the question of, when you're going to buy a first class stamp, whether you should buy a face value stamp or a Forever stamp. The answer to that question is always, economically at least, you should buy a Forever stamp.

There's simply no reason to buy two years worth of face value stamps.

I am not, and never have been, talking about anything like this, except in an attempt to persuade you that I am not talking about it. Can you please believe me on this point?
posted by Flunkie at 7:01 PM on June 2

I mean, really. Please, please, reread my question. Please. Is there anything in there asking "Why shouldn't I stock up on Forever stamps"?

No. There's not. Rather, it's "Why should a person buy a 42 cent stamp instead of a Forever stamp", and if there's no real reason other than aesthetics and such, "Then why does the USPS sell 42 cent stamps", aesthetically pleasing if need be.
posted by Flunkie at 7:07 PM on June 2

"Then why does the USPS sell 42 cent stamps", aesthetically pleasing if need be.

I mistakenly switched mental gears in the middle of that sentence, resulting in a confused statement. I meant something more like:

"Then why doesn't the USPS just sell Forever stamps", aesthetically pleasing if need be

Or:

"Then why does the USPS sell 42 cent stamps", rather than Forever stamps, aesthetically pleasing if need be.

posted by Flunkie at 7:12 PM on June 2

I tend to be on Flunkie and kosmonaut's side here. When I bought my one panel of Forever stamps last year (right before my mother decided to dump all her 34 cent stamps from about a decade ago on me - thanks, Mom!), I started thinking of it as a sunk cost. Not money anymore, but stamps. Its value to me is no longer in how much money I can get out of it, but how many letters I can send off. Because of inflation, my panel of Forever stamps can send off more letters than if I had bought a panel of 41-cent stamps, so as stamps, it is worth more, and will continue to be worth more. As money, it might not be, but I am no longer considering my stamps as money. I'm not selling them, I'm using them.
posted by bettafish at 7:19 PM on June 2

I take part of that back:

when the truth is that people who buy Forever stamps, as they are presented (as something to buy in bulk), are more likely to give the post office more money than those who buy face value stamps as most people buy stamps (a book at a time).

Yes, now that I have reread that, I agree with it. The fact of there being two separate types allows the Post Office to take advantage not just of the people that I listed (those who buy 42 cent stamps instead of Forever stamps), but also of the people you're pointing out (those who buy Forever stamps instead of no stamps). Right. Thanks.
posted by Flunkie at 7:20 PM on June 2

I asked my question because I want to know if there is any reason that the USPS wouldn't simply replace face value first class stamps with Forever stamps, other than "to make more money off of certain people".

I have reread your question, several times now. As I said in my second response to you, you framed the question in a way that had the answer already inherent in it. My impression that you have an agenda here is strengthened by rereading your last line in which two out of the three reasons you suggest for why someone might buy forever stamps are negative. Even still, you seem to think that the Post Office makes "more money" off of people who buy face value stamps, but this is only true within your narrow definitions of acceptable stamp buying. The fact of the matter is that you're talking about two different products. Even if you aren't talking about stocking up on Forever stamps, that's how they are marketed, as a hedge against price increases. Such a hedge doesn't really make sense when we're talking about 20 or 40 stamps.

As has been made clear throughout the thread, there are reasons to buy face value stamps even if you lose 20 cents on the transaction. (Flexibility and variety chief among them) If you treat the two products as different (which they are) there is the added reason of economics, since the Forever stamp bought in bulk makes poor economic sense.

I do think you're being a bit disingenuous by framing your question in the way you have, and so narrowly, that it reads as a "Those guys are idiots, am I right?" kind of question. I don't particularly care, you and I have had a good conversation about it, but I don't think I'm misreading the tone in your question or in your insistence on ignoring the way in which the Forever stamp is in fact presented as a hedge against price increases. The fact remains that Forever stamps bought in bulk, as they are marketed, as a hedge against price increases, makes poor economic sense. (Lest you think all my talk about how the stamps have been marketed is hot air, see this WaPo article that repeats all the canards I've listed.)
posted by OmieWise at 7:43 PM on June 2

I have reread your question, several times now. As I said in my second response to you, you framed the question in a way that had the answer already inherent in it.

It had an answer inherent in it. I was asking if there was any other explanation.

My impression that you have an agenda here is strengthened by rereading your last line in which two out of the three reasons you suggest for why someone might buy forever stamps are negative.

Please search this thread for "I am not saying", and read that. I was using "ignorant" to mean "ignorant of the specific fact that there is a better option", and "careless" to mean "not really caring which they get". I was stating that those are two possible reasons why someone might buy a 42 instead of a Forever. I was not using either of these words in a general sense, nor was I suggesting that people who buy 42 cent stamps are necessarily one or more of them.

Even still, you seem to think that the Post Office makes "more money" off of people who buy face value stamps, but this is only true within your narrow definitions of acceptable stamp buying.

Good lord.

You say (as I have said before you) that most people buy stamps a book at a time.

If you buy a book of stamps at a time, you are better off buying a book of Forever stamps than a book of 42 cent stamps.

Why? Because the Post Office will make more money off of you if you buy 42 cent stamps, unless you use them all before the next rate hike, in which case you are no better off anyway.

That's not a "narrow definition of acceptable stamp buying". That is, as you yourself have said, "how most people buy stamps". And I'm not even saying that any way of buying stamps is "acceptable" or not. Jesus.

The fact of the matter is that you're talking about two different products. Even if you aren't talking about stocking up on Forever stamps, that's how they are marketed, as a hedge against price increases. Such a hedge doesn't really make sense when we're talking about 20 or 40 stamps.

Yes, again, you're right, another reason that the Post Office does this is to make money off of people who buy Forever stamps when they otherwise would have bought no stamps. THAT'S WHY I MARKED YOUR ANSWER EXPLAINING SO AS ONE OF THE BEST ANSWERS. Jesus.

I'm sorry that you're apparently convinced that you in your normal book-a-time buying routine are being smart and "numerate" and "not a sucker" by buying a book of 42 cent stamps rather than a book of Forever stamps, merely because there's another situation (buying Forever stamps instead of no stamps) that is a bad idea. And I'm sorry that you think I'm disingenuous. And I'm sorry that you think I think people who buy 42 cent stamps (of whom, I have already noted in this thread, I am one) are in a general sense careless and ignorant. I'm sorry if you think I have an agenda, and I'm sorry if you think I'm promoting certain types of stamp buying as "unacceptable". But hey. Whatever. I'm not going to keep trying to convince you otherwise. Thank you for the correct answer, despite all of these others.
posted by Flunkie at 5:42 AM on June 3

[this really needs to go to metatalk for metadiscussion - Flunkie, you are sort of overmoderating here.]
posted by jessamyn at 7:52 AM on June 3

It doesn't matter what quantity. X Forever stamps are always an equal or better deal than X 42 cent stamps, if you're going to buy X stamps for X first class letters anyway

It's just an equivalent deal. Period. 42 cents to mail a letter with a Forever stamp, 42 cents to mail a letter with another design plus the numerals 42.
posted by desuetude at 8:19 AM on June 3

42 cents to mail a letter with a Forever stamp, 42 cents to mail a letter with another design plus the numerals 42.

Except if I had bought my Forever stamp last month it would have been 41 cents to mail a letter with it this week, but 42 cents if I'd bought a first class stamp today. That's the crux of this whole thing, as near as I can tell, no?
posted by jessamyn at 8:30 AM on June 3

True. So add the following:

...unless it happens to be the week before a rate change (which are announced ahead of time and publicized in the post office.)
posted by desuetude at 8:45 AM on June 3

Support for a Cause: you buy stamps that support a special cause (like breast cancer awareness).

Yep. And the Breast Cancer Research Semipostal Stamp, like others in the semipostal stamps (Heroes of 2001, Stop Family Violence, etc.) cost more ($.055) than the "going-rate" First Class and Forever stamps.

"Since the stamp first went on sale in 1998, the Postal Service has sold more than 802 million stamps, raising $59.5 million for breast cancer research."

posted by ericb at 8:45 AM on June 3

*like others in the semipostal stamps program*
posted by ericb at 8:50 AM on June 3

I asked my question because I want to know if there is any reason that the USPS wouldn't simply replace face value first class stamps with Forever stamps, other than "to make more money off of certain people".

I don't understand why you don't think making money is a sufficient reason. The USPS is in business to make money; if they make more money this way, no other reason is required. As for the lack of variety in Forever stamps (which is why my wife and I don't buy them), you need to take that up with the USPS; we can't really answer that question.
posted by languagehat at 9:47 AM on June 3

I buy denominated stamps because the designs are better and more interesting, but also because having the number on the stamp is aesthetically pleasing, more traditionally stamplike. And I kind of enjoy the fussiness of having to get the right combination of tiny denom stamps together after a rate change. The idea of stamps has an interesting history and I like that we still have this institution despite the modernization in most message-carrying systems. I also like stamps that need to be licked, rather than stickers.
posted by LobsterMitten at 11:14 AM on June 3