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First-class Stamp Price Rollback

Washington Post: The 49-cent stamp has eight more months of life until the U.S. Postal Service has to roll the price back, the effect of a ruling that allows the post office to collect $1.1 billion to cover its recession-related losses.

Wednesday’s ruling by postal regulators should be the last word in a long legal dispute between the Postal Service and the mailing industry over the largest rate increase for first-class letters in 11 years.

[Postal Service can’t keep rate increase forever, court rules]

Stamp prices jumped three cents to 49 cents in January 2014 after postal officials, already financially strapped because the Internet is killing mail volume, said they needed to recoup billions of dollars they lost during the recession. The 4.3 percent increase came on top of the customary 1.7 percent postage prices have risen to adjust for inflation.

But regulators set a cap on the amount of revenue the Postal Service could recoup with the higher prices. After legal challenges from the industry representing bulk mailers (who argued against the emergency rates) and the Postal Service (which argued that they should be permanent), the U.S. Court of Appeals for the District of Columbia Circuit ruled in June that rate hike should not become permanent.

The aftereffects of the recession have become “the new normal,” the ruling said — and the Postal Service must adjust to that reality.

The court sent the case back to regulators to clarify what the Postal Service’s new post-recession mail volumes really were. The verdict came down Wednesday: The losses come to about $1.1 billion that postal officials are entitled to collect before rolling back the rate increase.

Where does this leave stamp customers? According to the industry, regulators and an analysis by Save the Post Office, the 49¢ stamp will remain on sale until “sometime in April 2016.”

But we don’t yet know what the price of a stamp will go back to after that. Postal Service spokeswoman Darlene Casey said Thursday that “Any price changes — as always — will be announced well in advance, in order to give our customers time to prepare.” But she declined to say how much less than 49 cents the new stamps will cost.

Article: Washington Post

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