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.
February 07, 2013 at 12:32 pm

The worst idea the Post Office could ever do !!!!!!!!!! I will miss Saturday delivery. Please Congress stop forcing the PO to pay that horrible pre payment and the PO would be perfectly fine. NO other company in this great country is forced to pre pay their health benefits except the Post Office. The PO has over-paid the government by 70 billions$$$$$ over the last 41 years yet they REFUSE to give the PO it's money back. What a sad comment on our government indeed !!!!!!!!!!!!!

February 07, 2013 at 11:28 am

Great, now I can go away for the weekend and not worry about someone stealing my mail and my identity.

February 07, 2013 at 10:46 am

This should have been done years ago.

The USPS will not survive unless they start operating as private sector business with profits in mind and not as a Government Funded Union.

Packages & freight are the only hope for the USPS and they have a lot of revamping to do.

February 07, 2013 at 10:42 am

its about time. saturday should have never been a delivery date especially to residents, as in some other industries saturdays were an emergency catch up day due to some circumstances. maybe used only during the holiday rush season.if you plan properly there is ne need for satudays for incoming or outgoing mail jim

joseph mcquade
February 07, 2013 at 10:38 am

Cool, 1 less day of junk in my box. and 80% of the stuff we pay Is closed on a Saturday by the time you get your mail..

Paul G
February 07, 2013 at 10:35 am

I don't buy into the theory of consumers not being able to pay bills. Every bank has bill pay on line. If consumers do not have internet go to your local library. If garbage only gets picked up once a week,i don't see any harm into mail 5x a week.

February 07, 2013 at 10:32 am

Great !!!! it's about time. Was always a waste of money and time.

eric tipton
February 07, 2013 at 10:31 am

Jackie states the govt. can't run a profitable business. The Postal Service has been forbiden by law from making a profit. So in great economic times the P.O. wasn't allowed to run up a surplus to help cover lean years as private business might do. Then when congress forces them to pay billions into retirement funds that no other business has to do or when fuel prices spike they are in trouble. And remember FedEx and UPS send their unprofitable business through the Postal Service for delivery.

February 07, 2013 at 10:26 am

I believe they could deliver mail three times a week Mon Weds and Fri I also believe in the not so distant future we wont need the Post Office they are kidding themselves if they think they are that important in this day and age of Technology. They need to do a lot more than drop Sat delieveries anyone else would be in some sort of bankruptcy.

February 07, 2013 at 10:19 am

I think it should've been done a long time ago also. I too, don't get my mail on Saturdays till very late in the afternoon. By then, whatever I was expecting can wait. I think this will certainly help.