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Finances & Money

Would you bank at the Post Office?

Apparently the U.S. Post Office is in some deep financial doodoo. Contrary to belief, even my own mistaken understanding at one point, the USPS is not funded by taxpayer dollars. They are an “independent government agency” that operate on their own revenue, but are constrained by the Postal Reorganization Act of 1970. They can’t do anything other than postal services and can’t close branches based just on lack of profits.

So you can see why the USPS has been struggling. They’re basically a corporation that has to market itself, but can’t offer anything new offer than “We mail stuff”. They’re a retailer, but can’t shut down unprofitable shops. And they have to deal with at least 4 unions.

So they’re looking at losing about $238 billion over the next 10 years if they aren’t allowed to change their business model, but they do have a few options up their sleeve. For example, cutting Saturday service as well as reducing benefit costs for retirees can help them save $90 billion over the next 10 years. But they want to do more to get out of their hole.

The post office has 32,000 retail locations which is more than McDonald’s, Starbucks, Wal-Mart and Walgreens combined, but they have almost no foot traffic relative to those named stores. So, the USPS wants to be able to attract new customers through initiatives such as banking and other services outside of delivering mail.

So the question is, would you bank at the Post Office? Granted, I don’t think the PO is looking into BEING a bank, but do you think having your bank inside the local post office would attract you to their location rather than one of the 50,000,000 other branches popping up on every street corner? What else do you think the USPS could do to attract more profit and foot traffic (outside of raising rates and cutting costs)?

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Clever Dude

14 Comments

  • I live in New Zealand. Until the 80’s our Post Office also had a banking service but the government of the time split the Post Office into three segments, selling the banking division into the hands of an Australian bank. Not a popular decision at all and for many years millions of dollars every year were paid as dividends to the Australian owners.

    Fast forward to 2000 when there was a renewed call for a fully New Zealand owned bank which was set up by the government of the day as part of the Post Office. Despite opposition claims that it would be a monumental failure it has gone from strength to strength offering new services and showing the other banks how it should be done. Check it out. http://www.kiwibank.co.nz

  • Surely the “bank” service they are thinking of is more like sending money orders or check cashing. That could be a lucrative business. It feels a little slimy at any other place, the USPS could use their air of credibility as a government agency (if you believe in such a thing) to build confidence from the public. I would feel better about using the Post Office than some grocery store Western Union, or some Checkz Cashed EZ type of place. Not that I ever use those services, but if I had to I would prefer to do it at a post office than the alternative. Plus with the gajillion locations it would be convenient for almost everyone.

  • I love the post office and go nearly once a week. I just think their customer service tends to be shoddy at best. (you think they got the rep going postal for nothing). It tends to be all about waiting in lines. I love the idea of adding lots of automated postal service stations. We have one in our PO that is open 24 hours. Great for me, as I tend to pay bills and get packages ready after the kiddos are in bed. Set those up in the local gas station and you take care of 50% of the needs of small towns. maybe even more.

  • The problem with the post office is that, in our electronic age, very few people send mail anymore. We pay all of our bills online. The only things we mail are birthday/Christmas cards.

    The only stuff I get in the mail is junk.

    The solution is not adding more services, but a downsizing. Reduce the number of days they deliver mail.

    The private firms (UPS, FedEx) are able to be profitable shipping packages. If the post office can’t, then they shouldn’t do it.

    Even though it’s not a government entity, who do you think ends up footing the bill for all of those losses?

  • I think banking would probably be a step in the wrong direction. Banks now accomplish most everything online and the actual foot traffic they receive is diminishing.

    I would give more thought to making the Post Office the destination place to be. I agree with the Starbucks idea above but let’s not stop there. Add in a bookstore, a food court, and maybe a fitness center.. ok, I may be getting a little extreme in the suggestions but you get the gist.

    Of course, in my vision, the Post Office just becomes a leaser of property and that is counter intuitive to their mission of delivering mail.

    Maybe they should open up a charge by the minute computer lab so that everyone can email each other? I think that still falls within the Postal Reorganization Act’s guidelines..

  • Shawn is right; a huge part of the USPS’ fiscal woes have to do with the fact that people simply use them less. They mail fewer cards and letters, instead opting for email and social networking, and they pay their bills online. However, that doesn’t mean that the postman has to/gets to visit them any less. Whether s/he’s deliver 10 pieces of mail or 1, they have to make a stop at each house, but the difference between the revenue produced by 1 piece of mail versus 10 is significant. Multiply that across all of the homes on their route and the figure is tremendous!

    In my opinion, there are simply too many post-offices, period. With few exceptions, the average person visits just a handful of times per year, because it simply isn’t necessary. The mailman comes to your house almost everyday and will take almost anything you’d like to mail – why would you actually go TO the post office, other than to mail a large package, and who does that with any real frequency? Not many people.

    The idea of adding a bank is a pretty stupid one simply because we already know that online banking is one of the primary factors in why the general public is sending less mail. So if they’re banking online, WHY would they go to this proposed bank/post-office combo?

    Of course, there is a segment of the population that does not bank online, and/or doesn’t bank at all and instead simply uses money orders and wire transfers for which there is a market that the post office might be able to tap into.

    But I think a much more common-sensical approach would be to close A LOT of branches (most?) and instead outsource the services they provide to other sources. For example, in my neighborhood there is a little market, and they have a small mail counter in the back where you can do pretty much anything you can do at the post office, except no one who works there is actually EMPLOYED by the post-office. They’re just certified by the USPS to provide those services.

    Likewise, we should drop Saturday AND Wednesday service or go to every other day delivery.

    And finally, raise the cost of stamps by at least 3 cents.

  • You people think you stopped sending greeting cards and moved to online banking and that’s why the USPS is suffering. Stop. It’s not you. Your personal mail volume does not make up the shortfall.

    The major reason the USPS is suffering from a lack of revenue is that businesses are not advertising and sending out what everyone calls ‘junk mail’. That ‘junk’ subsidizes your greeting card to Grandma or wedding invitations. The post office is making a pittance on retail customer services. The lost volume from business mail is the main reason why they are losing money. The recession is killing USPS along with rising gas prices.

    The biggest financial problem if you haven’t already heard is that the USPS is required to pre-fund retirement benefits at 80%. No other company or agency anywhere in the US is required to do that kind of the accounting. At this point, even NALC (Letter Carriers’ Assoc) is asking people to lobby Congress to lift this crippling mandate even if in the long run, it’s not in their best interest.

    I could keep on ranting, but I’ll stop now. I’ll just encourage everyone with a complaint about lost mail etc to call their local postmaster or the Postal Regulatory Commission. If you are ok with 5-day delivery tell the PRC and your congressperson. Because right now, even though USPS wants to move to 5-day delivery, retail/residential customers want 6-day to continue.

  • Add in some “kinko’s” type features – let me come in, hook up to your WiFi, print out color pictures or documents, get some copies made, print some business cards, or order customized greeting cards, wedding invitations, brochures. Get documents bound, etc. Buy batteries for my cell phone, charge my laptop. Print customized stamps. Their model is “mail” so if mail is moving to a more electronic medium, then that’s where they need to look – look to doing things that didn’t exist in 1970 and therefore won’t be prohibited in an Act that passed in 1970. Throw in a rack of gift cards too so I can go there, buy a greeting card (they sell them at the PO by me now!), print a custom stamp for the card, pick up a gift card to put in the card and then I can print out a nifty color label with balloons on it and send the card out – one stop shopping. Obviously, all for a fee…

  • In Europe they do this already. My gf used to constantly go to the post office and mail something and take some money out of her account that was with post office. I think it’s a great thing to do, granted the accounts wont make consumers any money, maybe 1% interest if you’re lucky, but you can’t deny the fact that you’ll have great access to your money!

  • Definitely, the retirement pre-funding requirement has got to go if the USPS is to survive. Besides that, I think they should really look to the European model and start moving in this direction. I like the Kinko’s analogy too. In short, the USPS has to become creative if they are to remain relevant. One idea that crossed my mind was for them to air advertising over their PA systems. Most of the time you’re in there, you’re stuck in a line anyway. Why not air 30-second commercials that businesses would pay for, just like they do in movie theaters?

  • Hi….i think they have almost no foot traffic relative to those named stores. So, the USPS wants to be able to attract new customers through initiatives such as banking and other services.some time we stuck and we want to find the way out and they move here and there.

  • Hi…. i think if we set a small business and make the more good looking we can can make big change and we can make a different ways to improve.

  • I live in a small town, Carnation Wa. It floods here, surrounding but not in downtown, and building out much is impossible. I would love to see some property freed up for other possibilities, by putting our bank and post office in a bigger grocery store, as one possibility. The liquor store is in the hardware store. California has liqour stores in grocery stores. With the internet, we do not need separate bank and post office buildings.
    Going back to the general store concept for these kinds of businesses makes sense. Would love to see it here.

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