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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
John0
February 07, 2013 at 9:12 am

If congress would just give back the money they took from the post office a few years back ( during the Bush administration along with the money they gave away from the social security fund ) the Post Office wouldn't have these financial problems. As for no delivery on Saturday... who should care... when I was growing up there wasn't a Saturday delivery. Personally if there is something that important that I need to mail I would drive to the post office. From what I have read USPS will still deliver packages and overnight mail... so what's the big deal... America get a grip....

Bernadette
February 07, 2013 at 9:06 am

I meant you "get" to the bank till monday! I miss my regular mailman..He retired.

Bernadette
February 07, 2013 at 9:03 am

Eliminate Saturdays...does it really make a difference. It never gets to you house before 12 pm anyway so if your waiting for a payment you get go to banks anyway till monday...

John
February 07, 2013 at 8:56 am

Eliminating Saturday delivery should have been done months ago. There is no reason that 5 days a week is not viable. The Post Office must take measures to ensure that they can be profitable. Congress is the real problem here, not the Post Office. Let them run the business like a business.

jim
February 07, 2013 at 8:46 am

And one more thing that really bothers me. And this from an employee. This person said that the have people out following them to see if they do back up and do the little things that might get them fired. WHY ARE THEY WASTING MONEY ON THIS, IS IT SO BAD THEY CAN,T TRUST THERE EMPLOYEES. Another waste of money. Guess they need new people to take charge and get rid of the seat warmers that all they have to do is sit around and make it harder for the people that deliver the mail. So sad.

Timmy
February 07, 2013 at 8:46 am

If you "lost your debit card" you can go in any branch and they will give you a temporary card until you receive your new one via US Mail. I wonder all the doom and gloom. Nothing isnt' going to happen.

Dexter
February 07, 2013 at 8:43 am

Monday's are already a challenging (think "heaviest") delivery day for postal letter carriers. This is the case because the USPS's processing centers often play "catch up" on Saturday and Sunday...providing a deluge of mail to Post Offices for Monday's delivery. Under the 5-day delivery plan, I fail to see how individual Post Offices will be able to maintain traditional services standards. As of August 2013, some of the mail formerly delivered on Saturday or Monday, will likely be delivered on Tuesday...possibly later.

Finally, on Wednesday, Comcast Xfinity reported that 5-day delivery will save taxpayers $2 billion. Not true. The Postal Service is an independently run organization and is not supported by federal taxes.

Mike
February 07, 2013 at 8:40 am

In this free enterprise country any company that is and has been losing billions of dollars would have been shut down along time ago.
The idea of mail delivery is way past its time. Everything today can be done via internet. Paying bills and any type of money transfer can be done electronicly. I even bought a home out of state and did the whole transaction electronicly.

David
February 07, 2013 at 8:39 am

How is it that UPS & Fed Ex can make a profit but the Post Offcie which has a monopoly on lettrer carriers; the PO also handles packages terribly! Privatetize the dieing USPO and watch the turn around.

Jacquie
February 07, 2013 at 8:38 am

I have been saying for years that they should stop Saturday deliveries. How many businesses are in the office to receive their mail on Saturday anyway? Good move USPS. Dont blame the postal service if you can't pay your bills on time.