Businesses raise product prices by giving customer less
If you use the U.S. Postal Service (USPS), prepare yourself to save a few pennies come April 10.
That’s when the rate for a first class letter drops from 49 cents to 47 cents.
If you can’t remember such a thing happening while everything else but gasoline is going up in price, you’re in good company. Price drops have happened only twice in the history of the Postal Service – in 1885 and 1919. Not too many of us were around almost a century ago.
The reduction comes about because the “temporary rate increase” the Postal Service won in 2013 is expiring.
The Postmaster General fought to keep the current rates because the drop in postage cost will mean a $2 billion loss for the USPS. Congress and the courts felt otherwise.
For most of us, the lower cost of mailing a letter won’t make much difference. But it might help businesses that use direct mail save a few bucks. I haven’t found out if or how the drop might affect The Gazette, which uses the mail to distribute the newspaper.
The temporary 49-cent rate came about because of declining mail volumes and the recession that began in 2008.
So what will the new rates be? In addition to the 47-cent first class letter rate, the cost for each extra ounce falls from 22 cents to 21 cents. An overseas letter will save you a nickel – it changes from $1.20 to $1.15. And postcards will cost 34 cents, down a penny.
If you’re one who recently stocked up on so-called “Forever” stamps – stamps you buy at current first-class rates that remain good for first class postage even after rates go up – you might want to hold onto them for a while. After all, why pay an extra two cents? The only “Forever” stamps that could save anyone money would be those that cost less than 49 cents when the purchaser acquired them.
I’m not sure how the Postal Service will handle stamp sales. It will charge 47 cents apiece for “Forever” stamps, but what about people who want to buy additional ounce or postcard stamps? Will the post office reissue or reprint the cheaper stamps?
At our house, we should be in good shape to handle the change. My stamp box has denominations of all sorts, so even if I don’t use “Forever” stamps on my bill payments and occasional greeting cards, I think I can come up with the correct postage for any mailings by combining lesser-value stamps.
We just might be getting mail soon with several different stamps in the upper right corner of the mailing piece as others do the same.
I think it’s inevitable that postal rates will go back up in the not-too-distant future; after all, the Postal Service loses money and is likely to continue to do so unless Congress relieves it of the multi-billion-dollar burden to fund pensions.
Only in America would the government be so short-sighted as to force the postal folks to cut prices, exacerbating the agency’s loss. Maybe that silly logic is part of the reason so many Americans are upset and dissatisfied with the way Washington does things.
While the postal rates fall, other prices keep rising. Gasoline prices appear to have hit bottom a few weeks back, and now are on the increase as oil prices rise. But consider what’s happening in other quarters.
My wife bought a stick of deodorant a few weeks ago, and happened to compare it with the one she’d just about used up. Guess what, the size shrank.
Side-by-side, it’s easy to see that the manufacturer raised the price by giving the customer less, even if the price stayed the same.
Then we looked at a box of Nabisco Wheat Thins – a box that offered 10 ounces for the past several years. I was startled to see a price increase by way of putting less of the product in the box. The new size is 9.1 ounces. I got out my scale and found that’s equal to 14 fewer crackers in the new, smaller size.
To add insult to injury, the smaller-volume box is the same size as the earlier versions, and when I pulled the plastic bag containing the crackers out of the box, it was just half-full. (“Contents may have settled during shipping.”) Yeah.
Campbell’s Soup, which makes V8 juice, recently introduced a 46-ounce bottle. The company still offers the larger 64-ounce bottle, so I can’t quite figure out why it came out with the new size, unless it plans to do away with the bigger size, and of course, charge us more per ounce.
In discussing product downsizing a few years ago, I made the point that as downsizing continues, it shouldn’t be too long before each bag of Cheetos contains just one piece. That’s because Frito-Lay methodically cuts the amount of product it puts in its bags. Sure, the company has large bags available, but I spotted one this past weekend in the supermarket selling for $4.99. For a bag of Wavy Lay’s potato chips.
If you compare containers of various products in your house with what you bought earlier, I’m pretty sure you’ll find several that are downsized.
There doesn’t seem to be much we can do about it, and manufacturers know that if we like their product, we’ll keep buying it even when the price goes up. Up to a point. I suspect that when the bag contains one, or even two or three Cheetos, we’ll leave it on the shelf.