The “Forever” Stamp; Good Idea?

by Murray Comarow

A few years ago, Ruth Goldway proposed that the Postal Service issue a stamp for ordinary letters that could be used forever, regardless of future rate increases. Mrs. Goldway is a member of the Postal Rate Commission, an agency independent of the Postal Service, which has a lot to say about the price of stamps. She has never been criticized for being soft on postal management.

The proposal intrigued me, and I asked whether it had been based on any market research or economic analysis. As far as I know, it had not; it was simply an idea. I like ideas. Sometimes they ignite a change for the better (or worse, it must be said). In any event, it aroused little interest and apparently died.

Apparently not! James C. Miller III is the Chairman of the board that governs the Postal Service. It hires the Postmaster General, sets policies, and makes the big decisions, consulting with the PMG. On May 3, 2006, Miller announced the filing of a major rate case and added, “The Postal Service will supplement its filing in a few months with details on the new [forever] stamp and justification for its introduction.”

This would introduce an important new product to the public, and I assumed that it was carefully studied before the announcement. That is not the case. I should have been tipped off, I admit, by Mr. Miller’s promise that “justification” would be forthcoming “in a few months,” but I was not. The forever stamp still remains a free-floating idea, not based upon market research, economic analysis, or impact on accounting principles.

Let me say as clearly as possible that I am not opposed to the proposal. Nor do I support it. I am simply surprised that the Board reached this decision without a sound research foundation.

For many years, and as recently as March, I decried the fact that while Congress demanded businesslike postal operations, it interfered at every turn, and made it impossible to run it like a business. To be evenhanded, I must now ask why the Board did not act like a sound business before deciding to launch a new major product.

Some suggest that the forever stamp announcement was a public relations ploy to deflect attention from pending substantial rate increases. If so, it worked. The media focused on the forever stamp, true to its general lack of attention to larger issues.

Postal staff and consultants must now seek to justify the decision, after the fact. I have a hunch they will find such justification. Sound business practice, however, would have had the Board do its homework first. This is one I can’t lay at the feet of Congress.