The POD imprinted a variety of obsolete or otherwise unsellable stamped envelopes for use on official mail. They are generally common but there are scarcer varieties for specialists. The postal savings stamped envelopes from 1911-1913 can be found with different penalty imprints, and so can the Washington bicentennial envelopes, some of the circular die envelopes, etc.
At times the USPOD has been penny conscious. Surplus stock of unused envelopes was frequently overprinted when that style was or denomination was no longer useful. At the end of the circular die period, 1915-1950, the paper value alone of the surplus envelopes was in the millions and millions of dollars. The penalty overprint both demonetized the envelope and converted the envelope for official use. The face value of the stamp has no bearing on the use of the penalty overprinted envelope. The penalty overprint was not used to demonetize envelopes that had been returned to the post office like those bearing CANCELLED markings of various kinds.