Yahoo Finance Are Forever Stamps Worth the Investment?
In July, the United States Postal Service raised the price of a first-class stamp from 58 cents to 60 cents. That rate hike is the second within a little over a year. The previous increase was in August 2021, when the USPS raised the price of a first-class stamp from 55 cents to 58 cents.
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All in all, the price of a first-class stamp now costs consumers a nickel more than it did in June 2021 — and it’s possible that the price hikes could keep happening. Thankfully, there’s one way you can insulate your budget from stamp price increases: purchasing Forever Stamps. Are they worth the investment? Here’s what you need to know.
What Are Forever Stamps?
The USPS began selling Forever Stamps, featuring an image of the Liberty Bell, in April of 2007. The Liberty Bell design remained the only Forever Stamp until 2010 when a Holiday Evergreens Forever Stamp and Lady Liberty and U.S. Flag Forever Stamp coils were introduced.
Starting In 2011, all new first-class, one-ounce commemorative stamps were created as Forever Stamps. Beginning in 2014, all new first-class, one-ounce stamps became Forever Stamps except for stamps sold in coils of 500, 3,000, and 10,000. There’s also a Global Forever Stamp for international mail and a Forever Stamp for postcards.
According to the USPS, the Forever Stamp was created to make postage stamps user-friendly for consumers as stamp prices increased.
The name, Forever Stamps, has a significant meaning. You can use a Forever Stamp to mail a one-ounce letter at any time — no matter if you purchased it in 2007 or yesterday — no matter how much the price of stamps increases. Forever Stamps are always equal in value to the current price of a U.S. first-class, one-ounce stamp.
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How Do Forever Stamps Differ From Regular Stamps?
Regular stamps differ from Forever Stamps in that they are printed in different denominations. For example, there are 1-cent, 2-cent, 3-cent, 5 cent and 10-cent stamps. You can also buy an additional ounce stamp, which costs 24 cents.
Denomination stamps can be used to add postage to older stamps with a face value that no longer meet current postage rates, according the USPS.
Is It Worth It To Invest in Forever Stamps?
To decide whether it’s worth it to invest in Forever Stamps, it’s helpful to review the history of postage prices. Since 1932, the price for one-ounce postage has increased steadily — from 3 cents to the current 60 cents.
In 2006, a law was passed to cap postage increases at the Consumer Price Index, which is the federal government’s main way to measure inflation. However, the law also allowed for the Postal Regulatory Commission to review the cap. In 2017, the PRC ruled that the postage price cap was damaging the profitability of the United States Postal Service, and in 2020, the PRC issued new rules that permitted the USPS to have more leeway when it comes to increasing postage rates. Instead of capping postage increases at the Consumer Price Index, the PRC also allowed for declining mail and retiree costs to influence postage hikes.
Because the U.S. Postal Service has raised its rates on stamps twice in 2021 and 2022, equaling a rate hike of about 6.5% overall, it makes sense to wonder if Forever Stamps could be a good investment if rates continue to rise at a steady pace. For example, if you bought 1,500 Forever Stamps at 60 cents today, which equals $900, and the price increased to 70 cents in the next couple of years, you could potentially make $150 if you sold those 1,500 stamps at the then current rate.
While it sounds good in theory, there are many things to consider. How will you sell them and who will buy them? The USPS will not give you a refund or buy back the stamps. If you use a platform like eBay, you’ll have to pay listing fees and lose part of your profit. You’ll also have to pay shipping fees.
There’s also a company called Sell Forever Stamps that will pay you 70% of the current face value of your Forever Stamps as long as they are new, unfolded and unbent condition. At the current 60 cents face value, however, you would receive only 42 cents per stamp.
Before you run out and buy a large quantity of Forever Stamps, know that the rules regarding postage rate increases might soon be changed. Earlier this month, the Ensuring Accurate Postal Rates Act was introduced, which would require the Postal Regulatory Commission to review the new rate-setting system established in 2020. The bill would give the PRC 90 days to review and reconsider the system that was in place prior to 2020, which means that postage prices would once again be capped by the Consumer Price Index. The other option afforded by the Ensuring Accurate Postal Rates Act is for the PRC to create a new system within one year.
All in all, Forever Stamps are likely not worth the investment if you’re wanting to sell them for a profit unless you’re very, very patient and want to hold on to them for quite a while before attempting to resell them, such as if Forever Stamps reached a $1. Then, you could potentially sell them for 5 cents under the current value and still make a profit of 35 cents per stamp. But who’s to say how long it might take for the value of Forever Stamps to increase to $1, and will they even still be in circulation at that time?
It seems like there are much better investments out there.
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This article originally appeared on GOBankingRates.com: Are Forever Stamps Worth the Investment?
