Banking Blog

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

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.

«
»
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.
197 Comments
Gene Kreutzman
February 07, 2013 at 10:15 am

For the Post Office , years ago I saw a sheet of paper showing the Christmas bonus that ihe Post Master General and all the way down to the managers received, The Clerks and mail carruers received words Merry Christmas . The Post Master General bonus was more than I made in a year . Would like to see someone come up with those yearly figures . Maby we can raise the price of stamps so they can continue to get their bonuses.

Diane Morain
February 07, 2013 at 10:13 am

I agree, I would not miss Saturday delivery either. I think that it is a great idea, I even agree with cutting more deliveries per week.

Steve
February 07, 2013 at 10:09 am

I agree that there should be no problem stopping Saturday mail delivery ppl mention paying bills ect but the majority of us are direct deposit and pay bills electronically and if you are worried about paying a bill on time via USPS then just send it Friday, if it is a check that you are floating the if you mail it Friday instead of Saturday the bill would not be delivered until Monday or later no matter when you sent it so what's the problem

Jim
February 07, 2013 at 10:06 am

Junk mail is a real drag to us all and I agree with Debbie, most of it goes straight to the trash. However, even at reduced rates that are given to junk mailers, it is still a fair amount of income to USPS. I can't remember the full details but it seems to me that there was some action by the Feds involving the pension plans or something to that effect, that put a real bind on USPS. Perhaps we should once again look to our overp[aid elected officials to do their job (fat chanch). The loss of Satrday delivery will be a bummer but it appears that USPS dose not have much choice. However with just an estimated savings of
2 million, sounds as though they are managing their budget much like the Feds.

David
February 07, 2013 at 10:02 am

Many of you are under the impression that postal employees are over paid this is simple not true,fedex and usp employees enjoy higher salaries, the problem is a retirement prefunding 10 years in advance which no other company or government agency has to do congress takes 5.6 billion a year from the postal service and has been over paid in the tune of 75 billion over all years since the funding began, they of course want you to believe other problems so they do not have to pay the money back. We are also controlled by congress as to what we can do which limits what we sell how much we sell it for and the hours we keep.In short employees are victims of a failed system with to many restrictions on how we do business. Thank you and God Bless all.

Jerry
February 07, 2013 at 9:59 am

No i won't miss it! They should even go further like two days a week. The postal service is top heavy with people! With electronic mail and elctronic payments now it's time to phase the service out.

Lewis
February 07, 2013 at 9:43 am

Good move. I've been retired from the postal service for 12 years and they should have done this long before I retired.

Debbie
February 07, 2013 at 9:42 am

It DOES COST THE TAXPAYERS. The last time I checked, it was the taxpayers that mail their bill payments, order items through the mail, get monthly bank and card statements, etc. Not to mention that because US TAXPAYERS WORK, we also receive a substnatial amount of junk mail which ironically goes straight into the trash. Considering that Christmas cards I mailed a week before Christmas took 5 weeks to get to their destination, pony express would be better than the current system. So while it may not result in higher taxes, the cost of postage has gone through the roof. Cut service to once a week per household and most of America would use thier computeres to receiveand pay bills, place orders, etc. No one thought that reducing trash collection to once a week would work, I remember when it was 3 times a week. You won't know until you try.

Joan
February 07, 2013 at 9:29 am

Should have stopped Saturday delivery long ago, alot of people are out of town on weekends and mail just lays in the mail boxes on porches or roads waiting for someone to steal mail and identy, and like someone said earlier, never get mail before noon, so whatever can wait till Monday

Jackie
February 07, 2013 at 9:14 am

Dexter is fool. I own my own business and if the Post Office was privately run they would of been bankrupt many years ago. A 12 billion dollar lost last year alone. I've been saying for at least 5 years they need to slash payroll and cut out Saturday deliveries. As usual the govt. can't run a profitable business, they are too fat with union workers.