Counterfeit stamps cost Canada Post $10M per year: expert

In what only could be described as a complete shocker, it appears that my mother is not the only out there still buying stamps and mailing letters. Indeed, the market among those still unconvinced of the merits of email is such that counterfeit rings are actively trafficking in fake stamps.

According to a CBC report, the counterfeit activity is costing Canada Post $10 million annually through lost sales. As much as 1 per cent of all stamps in circulation could be counterfeit, as evidenced by a study conducted by stamp expert and Canada Post consultant Richard Gratton.

In 2010, Gratton inspected 27,000 envelopes and found 32 different forgeries in play, the CBC reports.

As a result, Canada Post now has 80 inspectors specifically tasked to ferret out counterfeiting operations. In 2011, their efforts contributed to a year-long investigation of a Quebec-based ring that had been distributing stamps mostly through convenience stores in Montreal and Toronto. The RCMP raid of 24 stores resulted in four arrests and the seizure of 40,000 stamps worth $2.6-million, the Canadian Press reported.

That crackdown was the first time in 20 years that a counterfeiting network had been discovered in Canada, which may be more of a reflection of investigation efforts than the absence of stamp forgers. It hardly seems likely that criminal rings are all of a sudden bullish on the stamp market. After all, who under 50 still writes letters or pays bills through the mail? In fact, the situation is so dire at Canada Post that’s almost a rosy sign that people think there’s enough money to be made in mail to risk jail.

The Crown corporation’s execs are less convinced. Last month, CTV reported that Canada Post was facing a $327 million operating loss, and was considering reducing home delivery to three days a week, as well as consolidating and closing sorting centres and retail outlets across Canada.

In November, Canada Post posted its sixth consecutive quarterly loss -- $50 million in the third quarter -- with mail volumes falling by 9 per cent . Declining revenues have resulted in Canada Post selling off key properties such as its massive heritage building in downtown Vancouver.

Alas, the counterfeiters have not uncovered any new market segments missed by the company. They’re simply capitalizing on a design change that has made the stamps easier to replicate. Gratton says the switch to ‘permanent’ or non-denominated stamps on self-stick paper have made them much easier to copy with the right software. And presumably the considerable advances in the forgery proofing of real currency has made stamps an even more tempting target for skilled printers.