According to The Atlantic, the United States Postal Service (USPS) sells roughly 12.5 billion stamps per year, any of which are Forever Stamps. Did you know that the USPS is finalizing a price increase that would raise the cost of Forever Stamps from $0.73 to $0.78 on July 13th? That’s the sixth price increase since 2021, which are fueled by the USPS’s desire to break-even by 2030.
This means that sending your Model Validation Notices (MVNs) for debt collection is about to become even more expensive. What are the long term implications of this price increase? And is there a way for your business to lower the cost to collect debt? Join the Retain team as we discuss the answers to both those key questions.
What Are the Main Drivers for the Forever Stamp Price Increase?
This direct impact to the bottom line isn’t the only USPS-related challenge your service operations are facing. In October of 2024, the USPS scaled back its delivery targets of first class mail. Originally, the goal was to deliver 93 percent of first class two-day mail and 90 percent of three-to-five-day mail on time. That’s been walked back to 87 percent and 80 percent respectively.
When you have to send an MVN for each account and are likely getting more placements each month, there’s a significant cost-increase about to hit your bottom line on July 13th. Plus, there’s the added cost of a larger percentage of those notices being delivered later than planned.
How Do You Maintain Your Cost-to-Collect Ratio with Each MVN Potentially Becoming More Expensive?
Absorb the Cost in the Short Term: In the wake of the stamp cost increase, some businesses look to simply take the hit until their forecasts can be adjusted. The potential issue with this tactic is that it’s difficult to accurately forecast when future stamp prices are uncertain. It’s difficult for many businesses like law firms or debt buyers to add more flexibility in their direct mail budget.
Try to Pass On Costs or Charge Off More Debt: Another potential tactic is increasing the price of your own services to off-set the Forever Stamp increase. The issue here is that finding the right increase that aligns with your customer’s needs takes time. And charging off more debt could upset the balance of your business’s financial health.
Reduce Mailing Volume: Some businesses might opt to reduce mailing efforts and only focus on sending MVNs to collect from accounts that are most likely to engage with their company. However, it can be difficult to identify the higher value and more likely to pay accounts, and you still have to decide what to do with the rest.
The good news is that there’s another option for businesses looking to navigate these market challenges. Digital debt collection and electronically sending your MVNs via email is a great way to protect the profitability of your business.
Why Your Business Should Consider Digital Debt Collection Strategies
One way to limit the impact of Forever Stamps price increases is to send some or all of your MVNs electronically. Why should your business consider digital debt collection strategies? For starters, today's consumers prefer to conduct their financial business digitally. With the right Electronic Validation Notice (EVN) strategy, you'll know who opened, clicked and showed interest to resolve their debt. This data not only provides an audit trail necessary for compliance but also gives your business insight into the types of messages that resonate with your customers.
Regardless of how savvy your business is with digital communications, the right partner can help your emails reach 87% of inboxes. By using email for a percentage or all of your account placements, you'll protect the profitability of your business, unlock more first time payers and uncover which customers prefer digital communications.
Why haven't more businesses used this method to lower the cost to collect debt? Many businesses haven't made the switch to using email and digital strategies for two reasons. First, setting up your own email distribution system at scale for EVNs is often costly and time consuming. Additionally, it's common for businesses to realize they lack the expertise to ensure the digital communications are being sent compliantly. However, there are partners who can make the process easy.
Retain by TrueML Products is a white label SaaS that allows you to deliver compliant EVNs to past due customers. It’s a ready-to-use solution for law firms and businesses looking to streamline their servicing operations while protecting profit margins from outside factors. By going digital with a partner who understands compliance, you can replace stamps with email sends that lead to faster and cost-effective account resolutions. Request a consultation to learn more about how Retain can get your content seen and engaged with by customers.