How to mail letters and packages cheaply using discount postage

It's been 20 or 30 years since I've paid full price to mail a letter (or a package).  The current rate for a one-ounce first-class letter is $0.46, but I've been mailing mine for years for about $0.35.   The photo above shows the corner of a heavy manila envelope I mailed last week.  Affixed to it is $2.32 in stamps - which cost me about $1.75.  This post will explain how you can do the same.

I'm writing this now because on January 26, the postal rate for one-ounce letters in the U.S. will rise from 46c to 49c, and cyberspace seems to be full of friendly financial advice on why everyone should purchase "forever stamps" now to save 3c per letter.   Fiddle-faddle.  That's child's play, written by people who are unaware that postage stamps can be purchased at a substantial discount.

Before I get to "discount postage," we need to review two ways NOT to try to save money on postage, so that you don't end up in a Federal court or prison.

Intentionally short-paid postage is illegal.
In the first hundred years of the postal services, the appropriateness of postage applied to a letter or package was checked by a postal employee, either at a service desk, or in a sorting facility, or by a carrier.  This changed in the 1960s when technology was developed for applying to stamps a "tag" which automated equipment could read.  Those interested in the details can learn more about the process in a Linn's refresher course.

This was done to facilitate automated sorting of mail, but it also opened the door for a postal scam.  Early sorting equipment could not distinguish between a 6c stamp and a higher denomination stamp if both of them were tagged, so when postal rates rose, some unscrupulous people began sending out mass mailings franked with the 6c tagged stamps, advising recipients that they didn't have to pay 10c or 13c or whatever to mail a letter, and they could send $$ to find out the "secret."  As the U.S. Postal Inspection Service notes, this is a federal crime.

You should never intentionally underfrank a mailing.  Nobody will arrest you if you inadvertently use a 46c at the end of this January, but to do so on a consistent basis is a form of postal fraud.

Reusing previously-used stamps is illegal.
Ever since the first Penny Black stamp was issued in Great Britain, postal authorities have wrestled with the problem of how to prevent the public from reusing stamps.  The conventional approach has been to apply a cancellation, but sometimes the ink on a cancel can be removed from the stamp.

Large-scale scams involving reused stamps were developed some decades ago, reportedly by persons incarcerated in prisons.  They would advertise in newspapers and magazines asking the public to send them used postage stamps for their collections, then wash the cancels off the stamps, regum them, and resell them again.   An article at the Christian Science Monitor offers some background.

Certain types of stamps issued by the Postal Service can be washed clean of their cancellation marks with common chemical products. The stamps are then able to be reused.

``There have been entire business enterprises built around this [laundering] operation,'' says Joe Brockert, program manager for the stamps division of the USPS. ``In one prosecution, three tractor-trailer loads of stamped envelopes, yet to be chemically altered and stamps removed, were confiscated by postal inspectors.''

Most people would not consider soaking a stamp off a letter for reuse, but if that stamp is a $19.95 Grand Central Terminal stamp for use on Express Mail, the temptation becomes greater.  Let's be clear about this: removing a cancel from a stamp and reusing that stamp on another letter or package is a federal crime.

But - there are grey areas.  The first involves water-damaged stamps, typically those resulting from floods in urban areas.  In such circumstances entire sheets of stamps may become stuck together; they can be soaked apart, but then will have inadequate gum.  Since those stamps have never been used for postage, to my understanding it is permissible to reapply gum and use them.

Which brings us to "skips."  Everyone who receives mail knows that sometimes envelopes come through the postal service equipment uncancelled (or the cancel misses the stamp).  Many people harvest such "skips" by cutting the corner off the envelope, soaking the stamp free, and applying gum with a gum stick.  This is illegal - although frankly it is unlikely that one would be caught. You can even find such stamps offered in bulk lots on eBay as "no gum postage."  While it is possible that some "no gum" stamps being offered resulted from a broken water pipe in the seller's basement, I wouldn't count on it.  You shouldn't buy such material. 

Why discount postage exists
The compelling reason why you shouldn't soak stamps off for reuse or buy dodgy items from a shady person is that the alternative - discount postage - is readily available and relatively inexpensive.

Discount postage exists primarily because of stamp collectors.  When I was growing up in the 1960s, the popularity of the hobby was rising; advertisements for collectible stamps were in every issue of Boy's Life and in comic books.  Increased participation in the hobby generated drove prices higher, so many collectors began to put away sheets and blocks of mint stamps as "investments."

However, as the decades went by, the interests of young people shifted toward pastimes that required electrical outlets.  The demographic profile of the average collector got older, so that now many of the stamps saved as investments are coming back on to the market, and are for sale at prices below their "face" value.

There are other reasons for the availability of discount postage, such as scrap left over by current-day collectors of plate blocks and plate number coils, or mistakenly large purchases for business use (and see the addendum at the bottom of this post), but to make a long story short, postage stamps can easily be purchased today at discounted prices.  This is perfectly legal.   The stamps were originally purchased from the postal authorities as advanced payment for future service; a stamp issued in 1953 is just as valid for postage now as it was then.  (In some countries, out-of-date stamps have been "demonitized," and rendered worthless for postage; this has not happened in the U.S. except briefly during the Civil War.)

Where to purchase discount postage stamps
I'll offer three suggestions for sources of discount postage: members of local stamp clubs, eBay, and stamp stores/online retailers.

Local stamp clubs: Most medium- and large-sized cities in the U.S. have clubs of stamp collectors who have meetings where they buy/sell/trade material and hear lectures or presentations.  These meetings are open to the public (most would eagerly welcome visitors), and I would bet that every club has one or more members who are selling postage stamps at a discount.

To locate a stamp club in your area, you can check your local newspaper, inquire at city hall, or ask for help from a community reference librarian.  But the best way is to go to the relevant webpage of the American Philatelic Society and enter your location in the search field.  At this link you can also search for clubs of stamp collectors in countries other than the U.S.

eBay: You can use the general search function (use "face" or "discount" as a search term), or go directly to the category Stamps> United States> Postage, where most of it is listed.  Prices will vary according to the type of material.  Low-denomination stamps (3c, 5c etc) are ridiculously cheap, but it's hard to fit enough of them on envelopes, and they have to be combined with higher denomination stamps (8c or greater) so that a fluorescent "tag" will be recognized by sorting equipment.  As you get closer to the current first-class rate, the percentage of face will rise.  Larger purchases will mean lower % of face.

Here are some examples from the "sold" listings:

 $42 face for $29 + $2 ship = 74%. 

This one was offered at an opening bid of 65%, and sold at 69%; it's larger in size than the one above and has lower-denomination stamps.

Be careful when you encounter the term "unused," which may refer to the ungummed stamps I mentioned earlier (same re "uncancelled" stamps, or anything "on paper.")  I would not recommend you purchase material advertised as "no gum."

And if you don't relish the thought of licking 6 stamps on each envelope, consider purchasing already-stamped envelopes at a discount.  Many people don't realize that U.S. post offices sell stamped envelopes ("postal stationery") in different sizes, with and without windows.  At the post office they sell at face, but like stamps, old ones with out-of-date denominations can be purchsed at a discount.  These sold on eBay for 66% of face value -

- and these for only 60% -

- but note the second lot is much larger, and it includes a lot of "window" envelopes, which may not be easily used for noncommercial mailings.

I recently got some at about half of face value:

The addition of a 20c stamp (also acquired at a discount) rendered them ready to mail:

Merchants: The third option for purchasing discount postage, considered by many to be more reliable than eBay, is to deal with a merchant - a stamp dealer - either at a local store, or online.   As the hobby demographics have changed, the number of brick-and-mortar stamp stores have declined precipitously.  When I was growing up, stamp stores were in local neighborhoods, and department stores like Dayton's and Donaldson's had departments selling stamps; nowadays, even medium-sized cities may show no stamp stores in the Yellow Pages. 


Most successful stamp dealers have an online presence; a simple Google search for "discount postage" will offer a wealth of choices.  The screencap at right comes from such a vendor (but his minimum purchase is $1,000 of face value stamps, and thus a $800 - $880 purchase).

You can find better deals than that with a little searching, but you'll want to be sure to exercise the cautions I mentioned above - to avoid previously used stamps, stamps "on paper," "unused" stamps (skips), and regummed stamps.

I'll take the liberty of recommending one dealer.  Jay Smith and Associates is a specialist in Scandinavian stamps whom I have dealt with intermittently for perhaps ten years.  They recently began offering discount postage in prepackaged groupings:

Postage Rate Units are groupings of stamps needed to meet a particular postage rate (for example, starting 26 January 2014, the U.S. postage rate is 49 cents for the first ounce for a normal letter). A "postage rate unit" to meet the 49 cent amount will consist of up to (NOT more than) 3 stamps that total 49 cents: For example 25 + 20 + 4 = 49. Such units may be made up of various denominations, but will not require more than three stamps. The stamps will be neatly sorted and packaged (typically in groups of 25, usually mostly the same stamps) for easy use and will be clearly labeled so you know how they are intended to be combined and used.

The percentage of face (70-80%) will vary inversely with the size of your order.

Some final thoughts.
If you decide to use discount postage, be kind to your postman or postal clerk.  They don't enjoy adding up a half-dozen numbers to check postage.  As shown in the top photo for this post, I leave a notation next to the stamps of the total value (and in this case the weight). 

Be sure to use one or more stamps with a denomination of 8c or higher to trigger the automated equipment.  Finally, the non-denominated "temporary" stamps labeled "A," "B," etc, issued at the time of postal rate changes, are not to be used for foreign mailings because they are undenominated).

TLDR:
In the United States (and presumably in many other countries), mint postage stamps can be purchased at prices substantially below their "face" value and can save you about 25% of your mailing cost.

Addendum:  I've been reminded by a well-informed reader that there are a couple of additional factors that can come into play, especially when large quantities of recently-issued high-denomination stamps are involved:

There are a very limited number of reasons that such very recent stamps would be available in large quantities -- and for most of those reasons, you might not want to be involved:

• 1) Stamps stolen from post offices. 
• 2) Stamps stolen from companies, by employees from employers. 
• 3) Stamps purchased properly from a post office, usually by the owner of a small company, using the company's funds and writing it off on income taxes as a "business expense" and then the owner (or employee) takes the stamps home and sells them privately -- this is either theft from a company and/or its stockholders and/or a theft from the IRS and the taxpaying public. 

So, if you see large quantities of very recent stamps being sold on a venue like eBay and/or if the seller is not a regular seller of other types of stamps for collectors, I would be very wary. Sure, you probably won't be "caught" if you buy stamps "taken from the back of a truck", but you could become part of something you don't want to be involved in.  

Addendum 2022: As a result of advances in imaging and printing technology, in 2022 counterfeit forever stamps are flooding the marketplace.  See my update on this situation.