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Published: May 10, 2008 12:30 AM
Modified: May 10, 2008 02:21 AM
 

Another penny for your thought

The price of postage stamps ticks up again for the second time in two years, adding one more, albeit small, straw to the burdensome cost of doing business.

Some companies are hedging the increase by stocking up on "Forever" stamps, so named because they will qualify as premium postage forever, regardless of the going rate at the time.

But for others, the expense of buying bulk postage is hard to justify, especially as other prices rise.

"Even if it's a savings, it's still a one-time cost, too," said Liz Wallace, director of corporate affairs for Rocky Top Hospitality in Raleigh, which owns several restaurants including Bogart's and Red Room.

The price of a 1-ounce, first-class stamp will increase a penny to 42 cents Monday, while postcards will rise a penny to 27 cents. Other prices will also change, including the Forever stamp, which will go to 42 cents.

For Rocky Top, which sends 4,000 to 5,000 promotional mailings a month, the extra penny will add up to an extra $40 to $50 a month in postage expenses, or as much as $600 a year.

"The price of everything else is going up as well," said Wallace. "This is just one more thing."

Those higher prices are partly to blame for the higher stamp prices.

Legislation in 2006 tied stamp prices to inflation. When the price of goods rises, so do stamps.

While Postal Service costs are up -- it has to pay those higher fuel bills, too -- its revenues are down, and its pension obligations are high ($50 billion is needed over the next decade).

The only way to make ends meet is to cut costs or increase sales of new products. That's where the Forever stamp fits in.

Since rolling it out in April 2007, the Postal Service has sold more than 6 billion. This week, just ahead of Monday's increase, the service sold about 64 million per day, said Enola Rice, a spokeswoman for the U.S. Postal Service in North Carolina.

"People care about that [extra] penny," Rice said.

That's true at Progress Energy, which sends millions of mailings a month to customers in North Carolina and Florida.

David McNeill, a spokesman for the electric utility, declined to say how much the rate increase will cost the company, but he said the increase will not be passed along to customers.

But for many consumers and even some small businesses, the increase is negligible.

"It's not anything we're losing sleep over," said Mike Allen, manager and co-owner of Carfix in Garner. The auto repair shop sends up to 500 mailings a month, so the increase amounts to an extra $5 a month, or $60 a year.

POSTAL PRICES CHANGING

On Monday, the Postal Service is changing prices for some of its services. Full details are available at www.usps.com, but here are some of the price increases:

First-class letter (1 oz.): 42 cents

First-class letter (2 oz.): 59 cents

Postcard: 27 cents

First-class large envelope (2 oz.): $1

Certified mail $2.70

First-class mail international to Canada and Mexico (1 oz.): 72 cents

First-class mail international to all other countries (1 oz.): 94 cents

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