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End of Saturday mail to hit consumers?

By Claes Bell, CFA · Bankrate.com
Wednesday, February 6, 2013
Posted: 1 pm ET

Hoping to mail off that bill at the last moment to avoid late fees? It better not be on a Saturday.

The U.S. Postal Service announced Wednesday it is ceasing Saturday delivery and pickup of mail from businesses and residences as of Aug. 1 to try to stem the massive losses it has experienced in recent years. Delivery of packages to homes and businesses -- and full service to post office boxes -- will continue six days a week, and post offices that now operate on Saturday will continue to do so.

"The Postal Service is advancing an important new approach to delivery that reflects the strong growth of our package business and responds to the financial realities resulting from America's changing mailing habits," said Patrick R. Donahoe, postmaster general and CEO, in a statement. "We developed this approach by working with our customers to understand their delivery needs and by identifying creative ways to generate significant cost savings."

The USPS reported an annual loss of nearly $16 billion in 2012, and Congress has been slow to implement reforms that could put it on sounder financial footing. The agency expects five-day delivery to save $2 billion per year after it's fully phased in. That's a small fraction of the agency's red ink. Indeed, a 2011 Government Accountability Office report concluded that "ending Saturday delivery would reduce costs, but comprehensive restructuring is also needed."

The USPS cited internal research and media reports indicating that 70 percent of Americans supported the move as a way for the agency to cut costs and improve its financial position.

For consumers, the impact will likely be felt in terms of payment flexibility and turnaround times for sending and receiving communications with banks.

For example, consumers who normally would have waited until after depositing their paycheck Friday before sending out a credit card payment Saturday will now face a choice between incurring late fees and hoping their paycheck clears before their payment does. Should that fail to happen, the result could be hefty overdraft fees on their checking accounts.

However, your bank's ability to receive any payments you manage to send will probably be unaffected, as many large businesses have special relationships with the USPS that allow them to receive mail more frequently than regular customers.

"We pick up from the USPS and process payments seven days a week, including all major holidays," says a spokeswoman for JPMorgan Chase & Co. "If a customer's payment arrives in the lockbox on a Saturday or Sunday prior to our 5 p.m. local time cut-off, we will date the payment as of that day."

Overall, the negative impact on customers may not be what it would have been a few years ago, thanks to direct deposit and the sort of Web-based financial innovation that's partially responsible for the Postal Service's dire financial straits. Many people now get their paychecks directly deposited, and electronic bill-pay and other online services allow consumers to pay bills instantly as soon as they have the money in their checking account to do so.

That being said, if you have lost your debit card or have some other urgent need to receive mail from a bank, you won't be able to do so on weekends any longer -- and that could lead to financial hardship for some.

What do you think? Will you miss Saturday mail delivery?

Update: Spokespeople from Citibank and Wells Fargo say they don't expect their ability to receive weekend mail to be affected.

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197 Comments
jg
February 13, 2013 at 11:00 pm

Sorry, post offices are thing of the past. we pay everything online. Start being like ups and fedex, hopefully you will survive.

Holly Turner
February 13, 2013 at 7:04 pm

Isn't going to affect me. We've three debts, one mortgage to citibank and one to chase, and a school loan that is directly withdrawn from savings as it gives us a interest rate reduction. I usually pay citibank and chase via their website online and early. Our other regular expenses we also pay online via checking or credit card with a rebate:natural gas, electric,car insurance,tv/internet/landline,cells,water/sewer/garbage. Also we have a PO Box for our family mail and we usually take outgoing to mail to a secure box/post office and that is not very often. I've had a po box for almost two decades. I like it being secure and the lobby with access is open 24 hours, including keys to lockers some of which are quite large for big packages. I had outgoing mail stolen out of my home mailbox many years ago. The blue boxes have been stolen in my community. And another con, our local neighborhood mailpersons were picking up and delivering in the middle of the night! Not good with the crime in Albuquerque!

Jim
February 13, 2013 at 7:02 pm

The USPS problems have been long in the making. Simply put, spending in excess of income cannot be sustained o matter who you are. And if the cost of providing service skyrockets, then either fees must go up, volume must increase or expenses must be cut. What business can afford to increase its rate by a only a PENNY during a decade when cost of a gallon of gas has doubled, pension obligations have tripled and letter volume has decreased 500 % ?

Obviously the USPS has to become more efficient, but Congress is crippling them with these ridiculous limitations on postage prices.
How a service provider can possibly be expected to ship a letter across the country in a matter of days for less then a dollar AND not lose money in the process ? Time to come to reality.

Dan
February 13, 2013 at 7:08 am

I have no problem going to 3 day a week mail.

Robin Dearlove
February 11, 2013 at 3:15 pm

Here is a fact. We would have been profitale 4 out of 6 years if it wasn't for prefunding the retirement. 5 day delivery will not fix the problem. I see a lot of comments that people are against the 5 day delivery so where are they getting the information that 70 percent of the people are for it. I would like to know why anyone would be for the 5 day delivery, it does not save you any money or taxes. Do what you can to let your congressman know you are not for this. When all these tax paying people loose their jobs where do you think the federal government is going to make up that loss...YOU! I am a mail carrier, don't for a minute think what you don't get on Saturday you will get on Monday. That is not how it works. We will be overburdened with our mailvolume and it will take all week to catch up so hopefully you will receive the piece of mail you were waiting for by Wednesday, or on the flip side hopefully you didn't wait til the last minute with your bills becase who knows what day of the week they will get there. Get in touch with your congressman/woman in your area and let them know you are not for this, they need to know what the public actually wants, not Donahoe saying what we want so he can do what he wants