Today something is set to happen that hasn’t occurred since 1919: the Post Office is reducing its rates for First Class mail. A stamp will now cost 47 cents instead of 49! [For a full listing of new rates click here]

While welcome for consumers, the decrease in rates makes no logical sense for the postal service which is losing over $1 billion/year. But in 2014, when the latest increase was passed by Congress, it was done with a two-year provision that expired today. No action was taken to repeal it, even though the Postal Service appealed to Congress for such, so as of today you overpaid two cents for each of those Forever Stamps you have at home.

I am sure when the rate increase was proposed, it made it more palatable for Congress to hike stamps by three cents when they thought it was a short-term adjustment. Often it is easier to sweeten a deal in the present by making long term concessions. But those deferred actions have consequences as the USPS is feeling today.

Keep this situation in mind the next time you are proposing something with variable terms. If you can’t live with the long term in the short term, you may want to renegotiate the parameters before you seal the deal.

beth triplett

Additional source: Stamp prices set to go down two cents in April by David Goldman, CNN Money, February 26, 2016

Thanks Meg!

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