“Despite the estimated hundreds of millions in revenue the 1-cent increase will generate, the Postal Service is currently on track to lose even more than the $5.5 billion dollar loss they reported last year,” said David Rupert, U.S. Postal Service spokesman in Denver.
Postcard stamps increased by 3 cents, to 32 cents per postcard.
Annual postal volume has dropped about 23 percent. The biggest loss in revenue is from bills and bill payments that no longer go through the mail.
The post office gains income going both ways. For example, a utility company would use postage to send its customers their bills. In turn, consumers would buy stamps to mail their payments.
Now, more and more, bill and payment transactions are conducted on the Internet.
“That is what killed us more than anything,” Rupert said.
The struggling economy and loss of advertising are other revenue losses, Rupert said.
But the post office isn’t the only entity that’s losing money.
On Monday, Bank of Powell mailed 1,000 IRS forms to its customers. With the additional penny postage, that added another $10 to the cost.
“It all adds up,” said Stan Lundberg, Bank of Powell branch manager.
The extra penny will result in about $40 to $50 per month more spending for Powell Valley Hospital, said Jim Cannon, public relations director at Powell Valley Healthcare.
Still, on a recent occasion when he had to mail a package, it cost $7 less through the post office than it would have cost using one of the commercial parcel carriers, Cannon said.
The last time the cost of a first class stamp went up was from 43 cents to 44 cents in July 2009. Also in 2009, postcard postage went up a penny to 28 cents, then to 29 cents last year, Rupert said.
For all mail, from letters to packages to postcards, the increase averages out to about 2.1 percent, Rupert said.