Saturday, May 9, 2009

Forever Stamps Not A Good Investment, Will Never Outpace Inflation

Postage rates will rise on Monday, May 11th. For example, a first-class stamp will become 44 cents, up from 42 cents. For some reason my Costco keeps reminding me of this, promoting the fact that they are selling a pack of 100 Forever stamps at a whopping 25 cent discount to face value. I thought retail stores didn’t profit from selling stamps?

Forever stamps allow you to buy stamps once and know they’ll be good forever - you never have to worry about future rate changes or buy those annoying 1-cent stamps. However, there is no point in stocking up on them, because Forever stamps are not a good investment. For one, postage rates have not outpaced inflation historically. But more importantly, according to the 2006 Postal Accountability and Enhancement Act, the postage rate will never be allowed to outpace inflation.

It seems the best you can do is by right before the next hike (like right now). I suppose I should just buy the Costco 100-pack and not have to worry about stamps for the next five years or so.

Sources: Slate and Postal Accountability and Enhancement Act

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