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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
Chet Nelson
February 10, 2013 at 12:00 am

Funny, we've gotten along with the vast majority of banks closed on Saturday for many years.

I've often been told that one of the strong points of human beings that they can adjust to conditions as they are - - or can they?

PAT S.
February 09, 2013 at 8:53 pm

The USPS is mandated to provide UNIVERSAL mail delivery to the entire country. Not to make money or lose money. If Congress would stop STEALING from it with pre-funding we would not be having this discussion. They are robbing Peter to pay Paul.

life2live
February 09, 2013 at 8:53 pm

If the USPS stop Saturday delivers, then there should be extended hours of neighborhood substations to be open past 5pm to pick up you packages, buy postage stamps, money orders, etc. Business owners that have P.O. Boxes are limted as to what time you have excess to the lobby section to get your mail. Stopping saturday deliveries and service is going to affect a lot of business owners, and individuals. This is a bad executive decision.

Mary Wenger
February 09, 2013 at 8:35 pm

Removing the Saturday postal delivery is going backward instead of forward. Yes, I no longer mail most of my bills and instead of mailing letters I email now. The post office says this has caused them a hardship. I doubt that since now days I purchase items online on a regular basis and also have a ebay account where I ship at least 5 to 10 packages a week. I spend tons more using the post office than I ever thought I would and I also believe most others are just like me. Unfortuatly it is looking like because of computer hackers and identity thieves that banking online might not always be a viable option. Unless something is done soon to make computers more secure people might just have to return to the old fashioned way of paying their bills. I know many people who will not pay bills online now and it will only take once for me to quit. I truely believe stopping Saturday delivery is a big mistake. Add in a Holiday closure with no Saturday or Sunday and we are talking about a huge lapse in time for bill payers payments to be counted late. People just do not have huge amounts of money sitting around to be able to pay their bills weeks in advance of their due dates and most live pay check to pay check.
Mary

PAK
February 09, 2013 at 8:29 pm

The government does not know how to look forward. If they did, they would have realized years ago that internet banking, e-mail, etc. would have impacted their bottom line. The fact that they are raising the price of the stamp AND stopping Saturday deliveries is the most ridiculous move I've seen in a very long time. FIRE some of the incompetent, non-caring staff in the offices who don't do anything for you when you DO use the post office. LOOK AT THE REAL PROBLEM!!!!!

vicki
February 09, 2013 at 8:14 pm

The $16 billion loss by the USPS in 2012 is caused by incompetent government management, incompetent government management, AND incompetent government management! (@Ron: Any organization the government has control over, is a disaster. This is not a Republican vs. Democrat issue and should not be politicized. You may disagree with my opinion and that is your right but as an example, look at the Solyndra debacle here in California. Thanks U.S. Government!) To continue, my opinion is that the USPS needs to be privatized. Private companies (with the exception of those that have needed bailouts) can do so much better at organization, management of resources, and customer service than ANY government agency. I would love to see a good, solid private company take over the running of the USPS. One may notice that in the article large companies will continue to get 7-day a week delivery, but in two of the comments above, please note how some folks will suffer without Saturday delivery. Privatization is the best answer to the USPS ongoing problem and the USPS might even make a profit! Wow, Capitalism--what a concept!

Sandy
February 09, 2013 at 8:03 pm

The Post Office has to pre-fund their retirement pensions. They are funding retirements for people who aren't even born yet. No other department of the government has to do this. The Post Office has been the governments cash cow for years, but they can not afford to do so now.

jeannemarie coulter
February 09, 2013 at 7:07 pm

i do not want the saturday service to be stopped...i pay my bills, order my ph refills through the mail and have them delivered by the mail...i am a disabled person and i depend on the us postal service.

Pat
February 09, 2013 at 5:11 pm

I opt to receive paper billing received by mail. I do not have a "reliable" computer , therefore I cannot pay bills "online". If my computer goes down, I have no ability to pay bills, if I had cancelled my "paper" bills that come by mail. I cannot afford a new computer. There are lots of people in this same situation.
If the USPS would "re-organize", make cuts to some "unnecessary" spending, become more "efficient" and "accountable", then I believe they can be more prosperous without laying off workers or stop delivering mail on ANY given day; it could gain new customers, and, we wouldn't be having this conversation! Our Country doesn't need to add more head count to the overwhelming unemployment numbers, nor should we have to experience major personal delays and inconveniences due to the receipt of our "late" mail!

Ron
February 09, 2013 at 4:47 pm

Republicans have bee saying they are for jobs and the economy but they are the ones who are distroying these by having them fund their pensions. They aRe always talking about the constitution and amendment but this agency was written into and is a very vital to a lot of people. Replublical have really turned me off and people should see what they are doing to the country.