Banking Blog

Finance Blogs » Banking Blog » End of Saturday mail to hit consumers?

End of Saturday mail to hit consumers?

By Claes Bell ·
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.

Bankrate wants to hear from you and encourages comments. We ask that you stay on topic, respect other people's opinions, and avoid profanity, offensive statements, and illegal content. Please keep in mind that we reserve the right to (but are not obligated to) edit or delete your comments. Please avoid posting private or confidential information, and also keep in mind that anything you post may be disclosed, published, transmitted or reused.

By submitting a post, you agree to be bound by Bankrate's terms of use. Please refer to Bankrate's privacy policy for more information regarding Bankrate's privacy practices.
Chet Dovidio
February 09, 2013 at 2:35 pm

Its about time. It should be run like any American private business and its about time that someone is finally having some balls to make a decision! If Congress leaders can't lead, then they should be replaced with someone who can. Politics and business does not mesh. The USPS has gone on way to long without any action taken. Now if someone could only make a decision about social security?

maria lopez
February 09, 2013 at 2:35 pm

The us postoffice should be ashamed of itself.I lived in London, England and they managed to deliver mail twice a day.Instead of raising postal stamps every year they should try cutting out small postal offices and huge pensions for the retirees.Every time I go to the post office I wait forever as they take their time and a lot of them are rude.
Many people dont even have jobs,you think they would be more gratful.

Joseph Bullock
February 09, 2013 at 2:35 pm

This is good news. The USPS is admitting failure and backing down. Maybe some private company can take over for their lack of coverage. Certainly the existing companies have to be chomping at the bit to pick up their slack.

February 09, 2013 at 2:34 pm

USPS............just about the best example of government mismanagement that you can find. UPS or Fedex could do it better and more efficiently, charge less and make a profit!

I shudder to think what is in store for our health care. Pay more.
Get less!

February 09, 2013 at 2:13 pm

People will not miss Saturday mail and they should cut out Wednesday also. This day in the middle of the week will not be missed.The mail service is not used today for things of value or that are time sensitive.

February 09, 2013 at 2:13 pm

Just another example of government controlled, mismanaged "service". Also look at "privatization" of prisons.

February 09, 2013 at 1:43 pm

The USPS should have done this years ago. Also, they should consider selling the business to a private company, and they would made money delivering the mail.

joan hunt
February 09, 2013 at 1:42 pm

we wont miss it that much. save where you can.

February 09, 2013 at 1:42 pm

Strange, USPS reports to employees showed a loss of 6 billion. 5.5 billion from prefunding retirement programs as required by congress. These prefunding payments end in a couple of years. Mwanwhile in major facilities the USPS is spending a million dollars per building to upgrade to energy efficient lighting to save up to 100k per year, and in five to six years relamping will cost 25k. Management at USPS is trying to privitize mail service. Hope you like what you get when that happens.

February 09, 2013 at 1:38 pm

Except for the loss of hours, I have no problem with even 4 day service. Hey, the P.O. is in the red by tens of billions.