Counterfeit Stamps
Background
The U.S. Postal Service delivers over 108 billion pieces of mail annually, and each piece requires an approved stamp or other payment indicator. Bad actors, however, are increasingly selling, printing, or distributing counterfeit stamps. To combat this threat to its finances and customers, the Postal Service and its primary law enforcement arm, the U.S. Postal Inspection Service, focus on preventing counterfeit stamps from entering the mail system through public education, removing online fraud schemes, or partnering with other federal law enforcement to interdict illicit inbound shipments.
What We Did
Our objective was to evaluate the Postal Service and Postal Inspection Service’s efforts to mitigate the threat of counterfeit stamps. We reviewed related policies, initiatives, and data; engaged a contractor to assess online threats; and tested equipment.
What We Found
Postal Service and Postal Inspection Service mitigation efforts are limited, with no substantive approach to identify counterfeit stamps in the Postal Service network. While the Postal Service and the Postal Inspection Service have increased prevention-related efforts, the quantity of counterfeit stamps in the network remains unknown.
The Postal Service has not developed a comprehensive, risk-based strategy for identifying and mitigating counterfeit stamps. Developing such a strategy would help coordinate efforts across the organization, putting the Postal Service in a stronger position to protect its revenues and customers. The urgency of this threat also necessitates immediate actions to address other mitigation shortfalls. First, the Postal Service did not set mail processing equipment’s detection capabilities to a level to sufficiently detect counterfeit stamps or conduct sample testing to quantify the potential revenue loss. Second, the Postal Service has no identification capabilities across any other points of mail entry. We estimate these shortfalls resulted in over $349 million in revenue loss and $1.7 billion of revenue at risk in fiscal year 2026. Lastly, the Postal Service takes more than twice as long as comparable companies to disable online threats due to legal considerations.
Recommendations and Management’s Comments
We made four recommendations to address the issues identified in the report, and management agreed with all four. We consider management’s comments responsive, as corrective actions should resolve the issues. Management’s comments and our evaluation are at the end of each finding and recommendation.