End of Saturday delivery could cost you
The US Postal Service's cost-cutting measure will devalue some Netflix subscriptions and give people less time to pay bills by mail.
This post comes from Kelli B. Grant at partner site MarketWatch.
If the post office doesn't deliver letters on Saturdays, mailboxes nationwide get a day off from being stuffed with junk mail. No big deal, right? But if you pay your bills by mail or subscribe to a DVD rental service, the change could hit your wallet.
The U.S. Postal Service announced Wednesday it plans to eliminate Saturday letter delivery, effective Aug. 5. Packages would continue to be delivered on Saturdays, and post office locations currently open on Saturdays would remain open that day under the new schedule.
Consumers' outgoing mail would not be retrieved from their home mailboxes on Saturdays, nor would letters placed in a blue USPS box be picked up, says Darleen Reid, a spokeswoman for the USPS. Letters delivered to a post office location will not be processed that day, but will be processed Sunday for Monday delivery.
Without Saturday delivery or pickup, consumers will have to be more careful about making sure mailed bill payments arrive on time, says Gail Cunningham, a spokeswoman for the National Foundation for Credit Counseling. "Pay your bill the day it arrives if you're paying by mail," she suggests.
By law, credit card issuers have to set a payment deadline at least 21 days out from when they mail cardholders' statements, and the post office shift means consumers might get their statement two days later and have to send payment two days earlier.
This will inconvenience fewer people than it might have in the past. Just 23% of all bill payments are made with a check, according to an August 2011 study from research firm Fiserv, down from 61% in 2002. Meanwhile, online payments rose from 13% to 50% of payments during the same period.
But that still represents billions of checks. Another Fiserv study found that 59% of consumers still write at least one payment check each month. Consumers mailed just under 5 billion payments in 2010, according to a report that year from financial services research firm Aite Group. It projected a 6% drop by 2013, to roughly 4.7 billion mailed payments.
But even staunch e-payers may find that they have some mailed payments to worry about, says Ruth Susswein, deputy director of national priorities for advocacy group Consumer Action. Banks still send some payments arranged online through the mail, usually for smaller creditors that aren't set up to receive electronic payments, she says.
For consumers renting DVDs through a mail-delivery service like Netflix, no Saturday letter pickup or delivery can devalue subscriptions. Someone maximizing a monthly $7.99 one-disc Netflix subscription -- watching the movie the day it arrives and mailing it back the next day -- would get one less disc in August, eight instead of nine, if the customer started the month with a disc in hand. (A Netflix spokesman says the company had no immediate comment.)
It's too early to tell whether consumers will add more discs to their packages, switch to streaming subscriptions or maintain the status quo, says Dan Rayburn, an industry analyst with Frost & Sullivan. "It's unlikely to make a major impact," he says.
Netflix's DVD business has been declining. In the fourth quarter of 2012, the company reported 8.2 million domestic DVD subscribers, down from 10 million in the first quarter. Domestic streaming subscriptions, meanwhile, grew from 23.4 million to 27.1 million during that same period. "With Redbox still around, people who want them can still get DVDs easily," Rayburn says.
More on MarketWatch and MSN Money:
We haven't heard what the trade off will be in how many people will be laid off at the USPS. I bet none. Normally when the Feds have to do something, they say they will do, it means there will be some incentive for the employees to do it. Like maybe getting an increase in Pension or Medical benefits or wages????
IT IS THE POSTAL SERVICE AND THE FEDERAL GOVERNMENT AS A WHOLE THAT IS THAT STUPID, WE ARE THE ONES THAT STILL PROVIDE THE MONEY TO KEEP THIS COMPLETELY MISMANAGED GOVERNMENT AFLOAT, WE ARE THE RESPONSIBLE ONES, THEY ARE NOT!
For those who evidently think others shouldn't "whine" or complain; Hey! I'm curious... just because something - in this case, the USPS trimming some of its service - doesn't impact YOU, why do you feel any call or need to castigate others who feel it DOES impact them? This stance makes as much sense as a non-smoker saying it's OK to charge smokers extra for their participation in our mandated health-insurance pool (hey! I don't smoke, so why do I care whether YOU pay more?), or saying something like "hey, what's your beef about?" when smokers are told they now can no longer go into the restaurant and have a smoke after their meal, unlike they had been doing for the prior many years (What's your problem, brother? I don't want to smell your smoke, so go out there and light up, if you need.). In other words, it looks like because something does not impact YOU, it's OK and it doesn't matter whether it impacts others. Not very social nor smart. At best, inconsiderate and self-absorbed.
No. I neither smoke nor feel much threatened by the indicated changes in USPS "service". But I DO respect that others may well feel more impacted by the changes, and that they have every right to voice their opinions, just the same, and with as much respect, as do those not so impacted.
I'm actually MUCH more interested in something different... Service will be dropped, and some impacted by this change, much as the article has identified (yes, mail-cycles count in billing and in delivery of dated stuff, so if you get bills, or receive dated material - medical reports, DVDs, official correspondence, etc.) - by snail-mail, this WILL impact you.) But HOW MUCH will the USPS SAVE by this change? That's the one everybody should demand to know. It will cost many of YOU, and it is supposedly being done to "help" and "save" the USPS. You should want to know whether and to what degree this is TRUE.
You see, it is a strategy amongst service-providers and even the government and your favorite politicians to manipulate service-users and buyers... by making sure that the cuts you users are screaming loudly for HURT YOU more than they need to.
This is a tried-and-true "maximize the PAIN" strategem that leads to most "hurt" folks willingly paying increases, etc., while no real improvement happens. In big contrast, careful planning in business and households - strategies such as finding greater efficiency in operations, streamlining some processes, smarter shopping for supplies - is used by many to reduce the HURT to THEMSELVES when forced to cut their budgets. NO business seeks to damage itself by making sure that internal operations are increasingly debilitated or made less efficient so as to try and force - what? yourself? - to pay more for something.
I think this service-cut smells of the "maximize the PAIN to the customer" approach, and is not a plan to save money by streamlining postal operations or gaining some efficiency somewhere.
Some increased transparency might be a good thing. Maybe the USPS will post a comment and offer some clear explanation as to their real benefit and cost analysis behind this little move?
it will not affect buisness delivery anyway, they will still transport mail on the weekends just not pick it up, or deliver it.
if your paying your bills the day before they are due, you need to either rebudget, or pay online.
I was surprised to see that people bid up Netflix stock yesterday, after the announcement was made about no more Saturday delivery. (BTW: ending Saturday delivery is absolutetly necessary, along with other changes.) However, Netflix will have to make one or both of the following changes: 1. Deliver two DVDs at once, and still only charge the same amount per month for customers who get DVDs by mail. (In reality, Blu-ray. Only losers watch DVD now.). 2. Go to streaming only delivery.
Now, this will either increase costs or reduce revenue for Netflix, or both. None of these scenarios is good for their stock, so why did it go higher? You've got me.
Under such circumstances, no one can make money without making drastic changes to their operation.
Yet, when the post office wants to make changes like end Saturday delivery & close branches, they get stopped by the very same Congress that passed the PAEA.
The issue isn't with the post office--it is with Congress.
I am not a postal employee. I'm just a Democrat who thinks that Republicans can't govern, and their accounting tricks will always get us in trouble. The PAEA was enacted by the Republican controlled House, passed by then a Republican Senate, and signed by a Republican President. And, who was on NPR last night saying that ending Saturday delivery might be illegal? Susan Collins of Maine, yep, a Republican.
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