By Kelli B. Grant
If a United Stated Postal Service pitch to eliminate Saturday delivery goes through, consumers could see bigger bills — even as it takes them a few extra days to arrive.
Earlier this week, Postmaster General Patrick Donahoe told USA Today that a projected $8.3 billion loss in revenue this year could force the end of Saturday delivery. He told the paper that he thinks Congress might be more amenable to the strategy — which could save $3.1 billion a year — given the federal debt and budget problems.
Consumers are likely to find expedited shipping for online orders more attractive if there are fewer delivery day options, says L.J. Shrum, chair of the marketing department at the University of Texas, San Antonio. The extra cost seems more reasonable if it gets a purchase to you by Friday, instead of three days later on a Monday. It also increases the attractiveness of free-shipping clubs like Amazon Prime, Barnes & Noble and ShopRunner.com, which include faster shipping options as a benefit to members who pay an annual fee. Retailers have already begun adding new services (and charges) for same-day home delivery.
Another pitfall: the temptation to stock up. Consumers faced with the choice to return their Netflix or Blockbuster mail-in rentals by Wednesday or miss out on weekend movie watching might decide to increase their subscription instead, Shrum says.
Some of the added costs would come from retailers, too, if the lost day shifts order patterns enough to slow processing times or prompt a renegotiation with shippers, says Luke Knowles, the founder of free-shipping-focused site FreeShipping.org. “We might see online retailers promoting [Saturday delivery from] FedEx and UPS delivery a little more,” he says, or programs that ship online orders to stores for free, as a way to cut costs.
Pay Dirt readers, how would a cutback in postal service affect your spending habits?