At lunch today, I headed to the post office at the Galleria to buy a book of stamps. Pretty mundane stuff, right? Not much to get excited about at the post office. But something I saw there really got to me. As I was waiting in line, the kid in front of me, no older than about 19 or 20, slapped an envelope down on the counter, pulled out his wallet—and handed the clerk a credit card to pay for his 42 cents of postage.
Big deal, you're probably thinking. Kid needs his stamp. So he used a credit card—so what? I'll tell you what: That 42-cent transaction may have actually cost the U.S. Postal Service—you know, that ailing federal agency so far in the red it's seeking to cut mail delivery to five days a week—a bundle in credit card interchange fees.
I first read about those fees on a website called The True Cost of Credit. Plug in the first six digits of your credit card number there (or view the results for a sample number) and you can find out just how much your purchases cost a small business in credit card fees. If I buy a $1.50 pack of gum at a local convenience store, for instance, it costs the store about 37 cents—or 25 percent of the purchase price—in fees. (Lesson learned: Always try to pay cash when buying local.)
The site doesn't show results for buying a single 42-cent stamp, though. So I poked around the U.S. Government Accountability Office's website, learning from a report there that the Postal Service has among the highest volumes of credit card transactions in the federal government. Interesting—but that still didn't tell me how much this kid cost the government. Still curious, I called the folks at Transparent Financial Services, the company behind The True Cost of Credit, to see what I could find out.
The fellow who answered turned out to be none other than company cofounder Sean Harper—and right there on the phone he estimated for me the possible cost to the Postal Service: probably between 11 and 12 cents, he said. A tiny amount, in the grand scheme of things, but it translates to a 25 to 30 percent cut of what the Postal Service would've made from that transaction.
You can draw your own conclusions from this tempest in a teapot. But the next time I see someone laying down plastic for a single stamp, I might just buy it for them—and maybe help everyone's letters get where they're going a little faster.
Edit: After our phone conversation, Harper wrote up a more detailed analysis of the cost of using credit to buy a single stamp on the TransFS blog. Looks like cash really is superior to either credit or debit in this case—at least if you want to help the Postal Service keep its costs down. —Margaret Bauer, Associate Editor
