• on Aug 13th, 2012 in Products & Services | 29 comments
    More than 40 million Americans change their address each year, which means the U.S. Postal Service forwards an awful lot of mail. In fiscal year 2010, it forwarded 1.2 billion pieces. Under the Postal Service’s regulations, customers who fill out a change of address form have their mail forwarded to their new address for 12 months after the move. Mail forwarding costs the Postal Service almost $300 million a year. The cost to return mail to sender is another $800 million. The cost of mail forwarding – and returning to sender and treating as waste -- is baked into the overall First Class Mail rates, so all customers effectively pay for this service whether they use it or not. Canada Post has taken a different approach to mail forwarding, charging recipients either an annual or semi-annual fee when they move. Residential customers pay $75 for 12 months of forwarding and business customers pay $235. These prices increase slightly if the person or business moves to another province. The Canada Post model extricates the costs from the overall First Class Mail rate and is structured so recipients pay for the service, but only if they use it. Some U.S. business customers have requested that the Postal Service explore new pricing and product options to reduce the costs of forwarding and returning mail to sender. Would a model similar to the Canada Post one work in the U.S. or would residential recipients, in particular, feel like they were being charged for a service they thought was free? Should the sender pay for forwarding instead of the recipients? What would happen if recipients or senders decided against paying for forwarding? Would total costs merely go up since return to sender mail costs more than twice as much as forwarding per piece? Are there other alternatives? Share your thoughts below.
  • on Dec 12th, 2011 in Products & Services | 6 comments
    Every year, millions of Americans send holiday greeting cards through the mail to friends and family around the country. Usually this means a trip to the store to pick out cards, the Post Office to get stamps, sometimes even a photographer to capture that perfect holiday photo, and another trip to the Post Office to mail the cards. But now there are many options for creating a holiday greeting card that save both time and money. Not only are these options a potential boon to consumers, they are an opportunity for the Postal Service. Several years ago, Hallmark® introduced a hybrid greeting card that customers can order online. For one price, customers create a card by choosing a design and uploading their own photos and even choosing the day the Postal Service delivers the card. This year, Apple® introduced Cards, a smartphone application that allows customers to create and mail hybrid greeting cards directly from their iPhones. Still, for those who love the experience of shopping for cards, a number of Postal Service retail locations offer a selection of greeting cards allowing customers to buy, stamp, and send them from the same location. Offering holiday cards through multiple platforms has a number of benefits for the Postal Service and its customers. This type of multi-channel strategy provides customers with convenience and multiple options for using physical mail. If expanded to other postal products, such as Priority Mail or Standard Mail, this strategy could provide the Postal Service with an opportunity to grow mail volume for other mail classes and improve customer satisfaction by making other products and services easier and more convenient to use. Additionally, hybrid holiday cards, whether created from online or mobile platforms, represent a path forward for the Postal Service in the digital world. It shows that digital technology can compliment and not be the enemy of physical mail. So, should the Postal Service make efforts to apply this multi-channel, hybrid mail model to other postal products, and if so which ones? Do you plan to send your holiday cards this year using an online or mobile card builder or are you sending them the old fashioned way? Let us know your thoughts in the comment section below. This blog is hosted by the OIG’s Risk Analysis Research Center.
  • on Oct 31st, 2011 in Pricing & Rates | 12 comments
    When mailing a letter that weighs about one ounce, the U.S. Postal Service’s 44 cents is one of lowest First Class postage rates. Whether you are mailing a letter locally or sending a greeting card across country, it still only costs 44 cents now, but will increase to 45 cents in January. The graph below compares the U.S. Postal Service’s postage rate with other countries. As you can see, Norway charges the highest rate, which is nearly four times the cost U.S. rate.

     

    Source: 2011 Office of Inspector General analysis of Universal Postal Union data

    Some might feel it is reasonable for the Postal Service to increase rates and charge a fee comparable to those in other countries. On the contrary, others might say the Postal Service’s rate must remain at an affordable level, especially for people with lower incomes. They might also say raising the rate to a level found elsewhere would drive customers away even faster. When you think about prices paid for other goods and services, just how far does 44, 50, or even 75 cents go? By comparison, a small cup of coffee at McDonalds costs a dollar, a gallon of gasoline is over $3, and a gallon of milk is about $4. Share your thoughts below. This topic is hosted by the OIG’s Financial Reporting Directorate.

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