I explained previously what discount postage is for mint stamps. Iím not going to rehash that discussion again.
Around 2010, the market for discount postage started to change. Prior to 2010, discount postage was bought for about 80% of face value and it sold for 90% of face value, give or take a few percentage points.
Since 2010, a lot of discount postage has come on the market. Everyone has been digging out their childhood collection, a collection from a long-lost uncle, and so forth. Today, some dealers have stopped buying mint postage because they have so much of it. And overall, prices have dropped. Buying at 50-60% of face is common right now.
Will the market for discount postage ever return to that 80% level or more? In my opinion, no. Several things lead me to this conclusion.
Almost all stamps produced now are Forever stamps. People are willing to put one or two stamps on an envelope to mail it. To the general public though, putting 3+ stamps on an envelope to mail it is not desired. Itís too much work compared to just using Forever stamps. Now, if the discount was really steep, they may sacrifice and put multiple stamps on an envelope. Meaning, if the public can buy postage at, say, 50% of face, then they will go the extra effort to put many stamps on an envelope. If the sale price is 50% of face and the dealer needs to make a profit, guess what the buy price is? Not much compared to face value!
Since 2000, the USPS has increased the number of self-adhesive issues. Today, almost every stamp is self-adhesive. If youíre buying and selling self-adhesive stamps for discount postage, there is a market for that. However, the public is spoiled into using self-adhesive stamps. If you have stamps with gum that has to be moistened, forget it. Once again, unless the discount is really steep (50-60% of face), people donít want to buy gummed stamps and lick them. Itís too much work and itís messy. The gum tastes nasty.
One more point. The USPS now offers a 1Ę discount for pre-printed postage. In time, I see this discount growing to perhaps as much as 5Ę or 10Ę below the first class rate. This will drive customers to use pre-printed (and self-adhesive by nature) postage. If pre-printed postage catches on like I think it will, especially if the USPS increases the discount, then the market for discount postage is going to drop even further.
Until this economy makes a major shift to recovery, prices for discount postage are going to be soft, especially for low denomination gummed stamps.
Today, self-adhesive Forever stamps are selling in the 85-90% range from dealers. I think that is likely to continue for a long time. There is demand for them and they are easy to use.
Low denomination, gummed stamps may never recover. Demand is very soft and not likely to change any time soon given the points I raised.
If you think that holding on to mint stamps until the price increases is a good strategy, I respectfully disagree. I say, sell them now and get what you can for them. Even if the US economy started growing by leaps and bounds today and there was a surge in interest in mint postage, Iíd say it will take 2-3 years to use up what is on the market now before prices rise. If that did happen, I think prices for self-adhesive Forever stamps will remain strong or even increase slightly while prices for low denomination gummed stamps will change little, if any.