Forever Stamp Dilemmas: Does It Make Sense To Buy Forever Stamps For First-Class Postage?

Forever stamps are U.S. postage stamps that have no price printed on them.

The value of a Forever Stamp is whatever it costs at the moment to send a letter first class, regardless of when you bought that Forever Stamp.

Thus, a Forever Stamp never declines in value. In fact, it actually increases in value as the cost of postage increases. It's kind of like "rent control for stamps".

Good News & Bad News

The bad news...

There's another postage rate hike around the corner: May 11, 2009!

The Governors of the U.S. Postal Service have approved new prices for mailing services, including a 2-cent increase in the price of a First-Class Mail stamp to 44 cents. Prices for mailing services are reviewed annually and adjusted each May. The new prices will go into effect Monday, May 11. -- Postal News Blog

The good news...

If you already have some Forever Stamps on hand, they will be worth more on May 11th when the newest postage rate hike goes into effect. Yep, the value of a Forever Stamp automatically increases from 42-cents apiece to 44-cents apiece -- the new first-class postage rate.

If you haven't already invested in a good supply of Forever Stamps, you might want to now... before the rate hike takes place!

Customers can continue to mail letters at today’s prices by purchasing the Forever Stamp before May 11. Forever Stamps were developed to help consumers ease the transition during price changes. Forever Stamps do not have a denomination and will be honored whenever they are used with no need for additional postage for a one-ounce letter mailing. On May 11 the price of the Forever Stamp will be 44 cents. -- Postal News Blog

U.S. Postage Before Forever Stamps

Forever Stamps were introduced in 2007.

Before then, any time stamp prices went up you had to purchase additional 1- or 2-cent stamps to affix next to your "old" stamps on a letter. Combined, they would equal the cost of a new first class stamp.

As a result, many U.S. postage stamps were wasted any time there was a postage rate hike. Some people simply put 2 first class stamps on a letter, rather than purchasing additional 1- or 2-cent stamps to make up the difference. Others failed to use up their supply of "old" stamps, due to the inconvenience of having to buy additional postage to go with them.

Pros & Cons Of Buying Forever Stamps

If you use a lot of stamps and mail out a bunch of letters, then buying Forever Stamps can save you quite a bit of money... at a few cents a stamp. Every penny helps, right?

In effect, you will have stocked up on U.S. postage stamps, and you won't have to run out and get stamps an inconvenient time (or at the last minute, should postage rates increase again).

Not only is the forever stamp a bright light in a tough economy, it is also providing a whole lot of pleasure for the postal service. Last year, the agency’s chief seemed to relish his chance to introduce it, saying “Who said nothing lasts forever?” -- New York Times

On the other hand, if you don't use a lot of stamps, buying Forever Stamps can be wasteful because they will likely become lost or misplaced.

Can You Use 2 Forever Stamps To Cover Extra Postage?

According to my local post office, you can use as many Forever Stamps as you would like on first-class letters and packages. Each Forever Stamp is worth the actual first-class postage rate on that date.

However, you may be wasting postage if you use an additional Forever Stamp to cover say, the extra 15-cents you need for a 2 oz letter today, or the extra 32-cents you need to mail a 3 oz letter today. (Remember most letter mail falls under the 1 oz standard weight that a first class postage stamp automatically covers.)

For example, the rate for additional ounces is only 17 cents per additional ounce. So, depending on whether you purchased your Forever Stamps at 41 cents apiece or 42 cents apiece... if you used 2 Forever Stamps to mail a 2-ounce envelope, you'd be wasting 24 or 25 cents.

So it's best to know how much over-weight your letter is first... Then use this first-class postage rate chart to see whether it makes sense for you to use an additional Forever Stamp or not.

Using today's rates...

If you affixed 2 Forever Stamps on a letter weighing 2 ounces, you'd be wasting 25 cents (since 2 oz letters require 59-cents postage, and 2 Forever Stamps are currently valued at 84-cents).

If you used 2 Forever Stamps on a letter weighing 3 ounces, then you'd be wasting 8 cents (since 3 oz letters require 76-cents postage, and 2 Forever Stamps are currently valued at 84-cents).

How Many Forever Stamps Should You Purchase?

I suggest purchasing 3 to 6 months of worth of Forever Stamps, based on your personal stamp usage.

If a major holiday or special event is happening in the next few months, then you should also purchase enough Forever Stamps to cover your mailing needs during those times as well.

Buying a bunch of stamps just before a rate increase is a very effective way to save money. You can easily outpace inflation with this “investment” and even outpace a lot of other investments, including money market accounts. Of course, over a longer period of time (a period of two stamp rate increases or more), the price increases begin to match inflation, and that’s not a good investment. -- The Simple Dollar

Then again, some think that stocking up on Forever Stamp is a lousy investment. For example, Saving Advice brings up the following points:

You can make more money by putting the money for your stamp budget in the bank instead of buying Forever Stamps.

Forever Stamps can't be resold for a profit.

The post office plans to put limits on hoarding the Forever Stamp.

Where To Buy Forever Stamps

The best place to buy forever stamps is at your local post office.

Some grocery stores and retail mailing stores might also sell rolls of Forever Stamps, so that could be a convenient option. Just make sure that you are not paying a surcharge for the convenience.

You can also buy Forever Stamps at Amazon.com, but you'll have to pay shipping.