What’s your price point to mail a letter?

The price of stamps here in Canada has gone up, as of March 31st. It’s a pretty hefty hike.

A first-class stamp was $0.63. Now that’ll cost $0.85 – if purchased as a book or roll. The cost of just one first class stamp? $1.00.

The current rate in the U.S for an equivalent stamp is $0.49.

Permanent stamps are no longer being sold in Canada, for now at least. But they are still valid, at whatever price first purchased. (Non-denominated postage is sold as Forever stamps in the U.S., where they are still available.)

Which brings me to my question: from the consumer’s point of view, what’s the right “price point” to mail a letter? Price point being what customers expect to pay, or are comfortable paying. (In the business world, that should also cover costs, unless it’s a loss leader.)

A deeper discussion on price point from Running a Food Truck for Dummies illustrates the concept:

What does your local market consider a fair price for the food you’re preparing and serving from your food truck? You can’t just throw prices onto your menu without considering what your community is already paying for similar products from competing food trucks.

You must consider what other food truck businesses are charging for the same type of food you’re offering. If you’re going to charge more than your competitor for the same dish, you have to be able to justify your price with added value.

Of course, there’s usually only one company providing that particular service per country. And postal systems everywhere are struggling to cope with changes in how people communicate and rising costs. I don’t think postal services are ready for the dustbin of history. But how we communicate does change over time – no one sends telegrams anymore.

Here’s one take on that from a Maclean’s article about Lisa Raitt, a government minister who’s had to handle this topic:

…Raitt has also been in the news as minister responsible for Canada Post, as the Crown corporation moves to eliminate home mail delivery. On that contentious issue, her message, as usual, is blunt. Traditional to-the-door service is, she declares, just too expensive. Opposition MPs depict her as callous toward seniors who will have to walk to get their mail. “I think just being calm and rational isn’t a coldness,” she says. “It’s respecting people and telling them the truth, instead of a story that pushes off a decision because it’s not popular.”

What do you think? Is she right?

My own reaction to the sharply higher rates in Canada was this: “Who will pay that? It’s as if they want to kill the postal service.”

Which is not to take sides. I just think the idea of paying a whole buck (or more correctly, a loonie) to mail a letter won’t go down well with the older crowd, or the younger demographic that has fled that custom anyway. It’ll seal the deal on killing surface mail.

Current debate about proposed changes to postal services in Canada has its own nuances. And maybe that ship has sailed. Take this person-in-the-street query from the Ottawa Citizen that asked “When was the last time you mailed a letter?” Surface mail doesn’t seem that significant to many, and that’s from regular folks before this latest rate hike.

So, I’m curious. Do readers think it’s worth subsidizing surface mail delivery to keep the price point attractive enough to sustain use?

Or should the cost of a stamp more accurately reflect the cost of the service – and let the chips fall where they may? This isn’t just a Canadian story. The travails of the USPS are decidedly similar.

As a basis of comparison, here’s a chart from 2012 on what first-class stamps cost in various countries around the world, the most current such summary I could find.

Tags: canada, Canada Post, economy, mail, technology, US Postal Service