More money for the U.S. Postal Service means less money for companies in the accounts receivable management industry. The USPS announced this week a 4.8% increase in first-class stamp prices, from 63 cents to 66 cents, effective July 9. This marks the fifth price hike since early 2019 and a nearly one-third increase in stamp costs since then. Postmaster General Louis DeJoy’s 10-year plan aims to bring the USPS to profitability, with higher postage rates being a key component.
For debt collectors who rely on mailing letters to consumers with unpaid debts, this development is significant and requires attention. The continuous rise in postage fees directly impacts operational expenses, making it crucial for debt collectors to reevaluate their budgets and consider alternative methods to reach consumers. Companies that were not already using email and other digital communication channels to reach consumers may want to more seriously consider those options now. It is far less expensive to send an email or a text message than it is to send a letter, for which the prices will continue to increase going forward.
The USPS justifies the price increase as necessary to offset higher operating expenses driven by inflation and a previously flawed pricing model. The increased revenue will contribute to the financial stability targeted by the Delivering for America 10-year plan. However, the price hikes have faced criticism, as customers are paying more while receiving diminished services, such as slower delivery times.
Additionally, other postage fees will rise in July, including the cost of postcards and international letters. The overall increase is 5.4%. The Postal Regulatory Commission will review the price hikes before implementation, but the governors of the U.S. Postal Service have already approved the increases.
