Stamp Prices Have Just Gone Up for The Second Time This Year — Here’s Why It Matters

When was the last time you mailed a letter? Even if it’s been a while, you might want to pay attention. On Sunday, July 14, the cost of a stamp rose for the second time this year, rising by 5 cents for first-class postage to 73 cents.

Many people may not notice or care — after all, being concerned about 5 cents isn’t precisely a millionaire move — but this price hike affects you more than you realize. 

While most people no longer use mail as frequently, postage prices affect millions of businesses and organizations — the vast majority of the $40.8 billion annual mail expenditure.

When these companies cut back, it directly impacts the U.S. Postal Service's budget and ability to provide essential services, like delivering online purchases, prescription drugs, and election ballots.

Read on to learn more about the postage hike and why some experts are concerned about the USPS's future viability.

The postage rate hike is a big concern for businesses and organizations that rely heavily on mail — and ultimately gets passed down to you, the consumer. 

When these prices rise, many businesses, from those who send junk mail to magazines, cut back on their mailing activities, which puts USPS’s budget in jeopardy and makes it harder for them to provide essential services.

Historically, postage rate increases were tied to inflation and typically occurred once a year. However, Sunday marks the sixth increase in three years, with first-class stamp prices rising ten percentage points faster than overall inflation. 

Major mailers argue that these frequent hikes drive them away from the USPS, reducing revenue rather than increasing it. 

Michael Plunkett, the CEO of the Association for Postal Commerce, says the rapid rate increases are causing a decline in mail volume that may never return.

Digital communication, like e-mail, has significantly reduced the volume of individual letters. The USPS delivered 11.4 billion individual letters in the past year, a 75% decrease from two decades ago. 

While online shopping has increased package deliveries, the USPS faces stiff competition. 

Experts like Kevin Kosar from the American Enterprise Institute point out that the USPS no longer monopolizes package delivery which is a highly competitive market.

The USPS has been in a "financial death spiral" for years, leading to a 10-year modernization plan initiated in 2021 under Postmaster General Louis DeJoy. 

While this plan aimed to revitalize the service through network restructuring, full-time staffing, improved transportation, and technology investments, the USPS still faces significant financial losses — with a projected $6 billion deficit this year. 

Critics worry that the plan may compromise service reliability and that a financially self-sustaining, universal postal system may never exist. 

For consumers, the increase in postage rates might seem negligible, but it has broader implications. Rising costs can affect the reliability and efficiency of mail services that many still rely on for important deliveries, such as prescription medications and election ballots.

And while the shift from traditional mail to digital communication means fewer people use postal services, this could lead to more frequent rate hikes as the USPS tries to cover its expenses. As consumers, understanding these changes can ultimately help the USPS’s financial health.