Ever since my blog post about saving 10% on postage, I’ve been thinking more and more about the reality of all the postage out there that has never been used.
Then I realized that today is May 15th, the day (according to several mass-emails I received titled “Do not pump gas on May 15th”) that we as a nation are going to show our solidarity and stick it to the gas companies by boycotting the pump for one day. This email explains that if we all get together we can take the gas companies for billions of dollars, and they will choke on their stockpiles.
In a way, the post office has created their own form of stockpiling of postage. The stockpile of collectible stamps has definitely contributed to their bottom line, but will never be used. They know there are collectors out there that need to have a complete collection, so why not make more designs just to sell stamps that will never be used?
Big deal I say. The post office has a good idea. They won’t be more popular by raising rates every week, but they will be popular by releasing more collectibles, and keeping rate increases down by ensuring they sell more postage than is actually used.
Sure, I know I have better things to do than to dream about postage all day, you probably do too – but if you are curious about what is really out there, take a look at what I found out…
I called up my new buddy, Tim, at the local Stamp and Coin shop and asked if there were an industry association for Stamp & Coin stores – sure enough – the American Philatelic Society. After looking over their website I stumbled on the dealer member directory which boasts 1,800+ entries. Now Tim is not a member, and it looks like most of his peers at other local Stamp & Coin shops aren’t either. A quick yellow pages search for Stamp and Coin in Seattle shows eight stores, yet a search for member stores in the APS directory yields only two. If you apply that multiplier to the country you get 7,200 Stamp & Coin shops. Hardly scientific I know, but this is a blog post, not an investigative journalist’s life’s work.
Tim says if you are any kind of stamp store at all, you have to have at least the basic collection of plain old postage issues including five issues of each stamp, mini sheets (which can have 20 stamps), rolls, regular sheets, blocks of 4, and so on and so forth. That can easily run around $5,000 of face value postage for a small mom & pop store – not to mention the bigger stores.
Since Stamp & Coin shops are always buying and selling inventory of stamps, add to that another thousand or two just to make sure you have more of the popular stuff, and an estimated $15,000 to $20,000 face value of old postage that they picked up at estate auctions or bought from the heirs of collectors like I mentioned in my previous post.
Inventory adds up pretty quickly, and pretty soon we are looking at say – $25,000 of face value postage stamps at each little shop, not counting the face value of the collectible stamps that are actually worth far more than their face value and which no sane person would ever dream of using as postage. If we take our conservative estimate of $25,000 in face value and multiply that by 7,200 stores we are looking at $180,000,000.00 in unused postage just sitting around in store inventory. Not to mention millions of dollars in unused postage in private collector’s hands, old desk drawers, lost, you name it.
Let’s add in the private collections. Apparently more than 55,000 members receive The Journal of the American Philatelic Society. Don’t get me wrong. I like stamps. I use stamps. I think they’re great. I’ve always had a roll or book of stamps in my desk drawer, but I’ve never once thought about joining the special stamp club. I figure in order to want to join the APS desperately enough to pay a membership fee and get their journal, you probably have to be pretty serious about stamps.
Tim says if you are pretty serious about stamps you’ve got to have at least a couple thousand in face value postage. Take over 55,000 members and multiply that by a couple thousand bucks and you’re looking at well over $100 million dollars, and that’s just for the dedicated “card-carrying” members. Now you have to believe that if there are more than 55,000 people who want to pay to be members of the APS there have got to be tens of thousands, perhaps hundreds of thousands more, that think stamps are cool enough to collect, but don’t want to join the club. For every one person that is serious enough to join the membership club, there have got to be dozens who are interested enough to collect stamps, but not enough to pay to join. Add their collections into the mix.
Now some people may be thinking that this is too hard to believe. Seriously, “hundreds of millions” of dollars in stamps? Come on.
Well how about this for starters: since most “collectors” are by nature not “sellers” imagine how much postage they are holding onto compared to what they have for sale. A quick scan of the APS auditors’ report from three years ago shows that they had almost $14,000,000.00 of members’ stamp books sitting around on consignment waiting to be sold. Who knows what that number is today, and that just counts the stuff that they are trying to get rid of. Most collectors “collect” and don’t sell, so if there is $14 million sitting around on consignment waiting to be sold, imagine how much they have in their private collections.
Any way you slice it, it looks to me like there are hundreds of millions of dollars of unused postage out there just sitting around with no special collectible value. So forget the forever stamp, there are already “forever” stamps out there. Every stamp ever issued in the USA is still worth every penny that it says it is.
Don’t go nuts. Do not send an email to everyone you know that says something like this:
“Protest the postage rate increase! Don’t buy stamps from the post office for the entire month of May! Buy old postage from Stamp & Coin shops and don’t go to the Post Office for the entire month in protest of the postage rate increase! If we all get together we can take hundreds of millions of dollars out of the Post Office’s hands and put it back into the hands of the small business owners.
That will teach the Post Office that we don’t want a stamp hike!”
Oh rats, I forgot. I should have written that in ALL CAPS!
Obviously this won’t work for the same reason not buying gas on May 15th won’t work. As long as there are collectors, and as long as the Stamp & Coin shops keep inventory, they will just go out and buy more. If you don’t stop the consumption nothing changes when you put off purchasing for a brief time.
But what if people realized that the stamps that they were collecting were never going to make them rich? What if people who were sitting on stamp collections decided to take them out of their mint condition books and use them on a letter? Is the Post Office ready to operate on budget with an unforeseen $200 million dollar shortfall in postage sales?
It makes me wonder.
Now seriously, you need to get back to work because this post is way too long, and isn’t even remotely related to how to get the most out of the best Bible Study Software in the world like it should be.
If you are on your day off, and happen to be in the mood for some more crazy rambling, keep reading.
Is the USPS recognizing unused postage as a liability on their books, just like some gift card retailers do?
Does the postmaster general even discuss the fact that there are untold hundreds of millions of dollars in stamps out there that haven’t really been accounted for? They just assume that they will never be used, and they go about their business. Are they held to the same level of accountability that gift card or stored value card retailers are? Or does the government get different treatment?
Over a year ago it was reported that Home Depot Inc. saw $43 million in pretax profit from cards sold before 2002 that went unused. The same report revealed that Limited Brands Inc. had unspent gift cards worth $30.4 million on the books. It would be interesting to see if that same year the postmaster general’s report including a line item for unused postage… Big retailers are raking in tens of millions of dollars in profit on totally unused gift cards that people lose, throw away, collect, or just never spend – and those cards are way more versatile and useful than a sheet of stamps.
But once again we see that the Internet changes the way the world works. Now there are several websites that do nothing but facilitate trading or selling unused gift cards…not to mention eBay. People are already selling unused postage at a discount on eBay and other places.
Will we see new sites popping up selling “Unused postage” (hurry, that domain was still available when I wrote this post) or what about the new forever stamps? The USPS printed 4 billion “forever” stamps already and people are snapping them up like crazy. A quick search of the web shows a lively discussion on the merits of “forever stamp arbitrage” or forever stamps as investments. Since even the new forever stamp will always be worth the price of a first class mail piece, having, oh I don’t know…say 10,000 more stamps than you need when your kids inherit your shrewd investment may still flood the local Stamp & Coin shops with a ton of inventory that they will need to blow out. Of course it will be more convenient to use, so it may be easier to sell, but still – they will be sitting on lots of inventory, and that is a recipe for a discount.
Well, I have to get back to work now, then take some envelopes over to the Stamp & Coin place to get stamped, then run over to the gas station to fill up my car. Hey, I’m on empty, give me a break! :-)