The engineer in me is always running calculations and analyzing data. I’ve come to realize that some people don’t think this way.
Some time ago, a seller had some mint postage. I explained the situation with discount postage. The seller insisted that the stamps should be worth at least face value. Here is where some sellers make a mistake. They believe that by using two or more stamps at a time on their own mail, they are getting a better deal. Sometimes, they are wrong.
Let’s use a very simple example. Suppose the seller has two 29¢ stamps. Total face value is 58¢. Suppose I offer to buy them at 80% of face which is 46.4¢. “That’s unacceptable. I’ll put two of them on a letter and use them myself.” The seller just lost money.
In this case, the seller used 58¢ of stamps to mail a letter. Instead, they could have sold the stamps to me. Take the money and buy a 46¢ stamp from the post office to mail their letter. And they have 0.4¢ profit. That seems tiny, but we’re only talking about two stamps here. Multiply this example by the hundreds or thousands of stamps people usually have. Now we are talking serious money.
It could be worse. If the seller used two 32¢ stamps, my offer would be 51.2¢. In this case, the seller is losing 5.2¢ each time. Ouch.
In some cases, using the stamps would be better for the seller. For example, if they used a 29¢ stamp and an 18¢ stamp, they paid 47¢ to mail a letter. They overpaid a penny, but it is less of a loss than my discount postage offer.
There is a mathematical solution to this problem. Divide the first class postage rate by the discount rate of postage. In this example, that is 0.46 divided by 0.80. First class postage is 46¢ and I’m giving you 80% of face value.
The answer is 57.5¢. If you can come up with combinations of stamps that are equal to or less than 57.5¢, then you are better off using the stamps up for postage. You’re overpaying the postage a tiny bit, but it’s better than the 20% off of face that I’m offering. If the combinations of stamps are greater than 57.5¢, then using up the stamps costs you more money. You’re better off selling them for less than face value.
Sellers should keep this equation in mind. Look at the combinations of stamps you have and determine if you’re better off using them up for postage or should you sell them below face value.
A couple of caveats here.
If you’re dealing with $100 or less in postage, you can use them up in the next couple of years. If you have a significant amount of postage, you may never use them up. Why not sell them for below face value and do something with the money? Like taking a vacation? Otherwise, you’re going to spend many years fumbling around with these stamps and if you die before you use them up, then you’re going to leave those stamps to your heirs and they have to decide what to do with whatever is left. Sometimes I think it’s better to sell the stamps at a loss and take the money and enjoy doing something with it.
There is also the issue of loss. If you had a fire in your home and the stamps were destroyed, then what? You can’t go to your insurance company and say, “Hey, I had about $500 of my grandfather’s stamps that I was using for postage.” The insurance company isn’t going to pay more money because you say that you had some mint stamps in the house. If you hold on to the stamps and they were lost in a fire, flood, or burglary, then you also lost money because you could have sold them below face and did something with the money. Now you have nothing.
I hope I have given you many things to consider when dealing with whether or not to sell the stamps for discount postage. Think about it.