Counterfeit Forever Stamps

Wayne's estimate of $1 billion losses per year on counterfeits seems high to me. $1B is about 1.3B stamps a year, or about 10% of the 13.8B real stamps they sold (in 2024, the most recent info I could find). While I think the problem is significant, not sure it amounts to nearly 10%.

Royal Mail and the USPS are both fighting a massive surge in fake stamps, but they are getting completely different results. The struggle comes down to one technical choice: is a stamp a "unique digital key" or is it just "printed currency"?

The Royal Mail Strategy: The Digital Kill Switch
Royal Mail recently overhauled their system by adding barcodes to all standard stamps. This changed the game because it turned every stamp into a uniquely identifiable item. When a letter passes through a sorting machine, the system scans that specific barcode and marks it as "used" in a national database.
This effectively broke the business model for counterfeiters. If someone prints 10,000 copies of the same fake stamp, the machine will catch every single one after the first one is scanned. Because of this, large-scale counterfeiting has become mathematically pointless in the UK. While Royal Mail still allows older commemorative stamps without barcodes to circulate, those are not the primary target for fraud.

The USPS Problem: Anonymous Postage
The USPS is in a much tougher spot. In the U.S., a "Forever" stamp functions like a bearer instrument, similar to a $1 bill. However, it has no serial number and no unique identity. As long as a fake stamp looks correct and uses the right chemical ink that glows under UV light, the sorting machines generally accept it.
This has created a booming black market. Counterfeiters can mass-produce any forever stamps and sell them at a deep discount on social media or third-party websites. Because there is no digital trail for an individual stamp, the USPS has no automated way to tell a high-quality fake from a real one bought years ago. Every fake that passes through is a total loss of revenue for the postal service.

Why the U.S. is Stuck
The reason the USPS hasn't followed the UK's lead is mostly down to politics and law. First, there is the "Forever" promise. Millions of Americans own stamps they expect to be valid for life. Trying to tell the public that their old stamps are suddenly invalid or need to be swapped would be a legal nightmare.
Second, the scale of the U.S. infrastructure is massive. Upgrading every sorting center with barcode-tracking software requires a huge investment. Since the USPS operates under strict Congressional oversight, getting the budget and approval for a track-and-trace system is a slow, bureaucratic process.

No question that Chinese counterfeit stamps are taking a huge bite out of Post Office revenue.

Compare this to stamp collectors using older postage.

From a financial standpoint, the two issues are different in origin but similar in impact on cash flow. Counterfeit stamps are an outright loss: mail is delivered, but no payment is ever received. Older unused stamps, by contrast, were paid for years—or even decades—ago. The USPS carries these sales as deferred revenue (roughly $3–3.5 billion in recent years; USPS FY2025 Form 10-K). The agency does not have cash set aside for these redemptions. When someone mails a package using old stamps, the USPS still has to provide delivery today, using current resources and budget. In that sense, the net effect on cash flow is the same: services are rendered without new revenue.

This is such a typical government behavior. A problem is detected, in this case counterfeit postage, and years go by with much discussion, proposed solutions and no improvement. In fact, things worsen. You see it in all areas from program fraud to consumer product safety. There is not one single private sector entity that would be able to do this. Problems are either addressed or the company fails. Quickly. From banks to Walmart problems need to be solved. In the case of the USPS, they simply eat the loss and run in a constant deficit and/or pass the losses on to consumers.

The USPS has a 40-billion-dollar ten-year infrastructure modernization budget which includes 9.6 billion dollars for electric vehicles, 2.8 billion for IT services and they can't figure out how to combat this fraud?

The biggest way would be for US consumers to stop buying them. The next biggest would be AI scanning for the small but recognizable differences in the fakes. Neither of these are going to happen. I would love to see a breakdown of quantities of counterfeit stamps purchased by state. I suspect that the largest volume would come from the poorest states generally. Perhaps not an exact match, but close.

What do you mean by "poorest"? Total state economy? Per-capita income?

I would disagree. I think the largest QUANTITY of counterfeit stamps would be purchased in the states with the largest populations, unless you mean converting the number into some sort of "counterfeit stamps purchased per capita" metric.

It's a moot point, as we'll never have access to that data.

P.S. I also don't know that the numbers would wind up the way you think they would anyway, as those at the lowest end of the economic spectrum have the least use for postage stamps. Those at the highest level likely wouldn't be bothered to seek out cheaper alternatives. I think we'd find that it's primarily an upper-lower through middle-class trend.

Poorest as in per capita income. They still have to pay bills, and probably don't use a PC to do so. And small local or home businesses working on tight margins; there are probably more of them in those states as well. I assume that they are being used elsewhere as well, I just don't think that a lot of middle class people have the use or need for them.

I would go with the money.

If you look at the ads, counterfeiters are not targeting low-income consumers.

They are pushing bulk sales—often 1,000 stamps or more—aimed at high-volume users like wedding invitations, holiday cards, and small business mailings.

This is not a market built around people struggling to pay bills. Those consumers typically rely on cash and in-person bill-payment services. If someone has the ability to go online and purchase stamps in bulk, they also have the ability to pay their bills online.

Nailed it.

Crime, and it is a crime to use counterfeit stamps, is not exclusive to certain demographics. It is equal opportunity.

Everyone has weddings. Rich or poor. And I mentioned small business users.

If you're quite hard up for cash, you're probably not going to tie a bunch of it up in Forever stamps, real or counterfeit. The folks scraping together coins for a stamp here and there are likely to be plunking said coins down on the counter at a post office to buy a one-off stamp if and when they need it, not shelling out for sheet and rolls of stamps.

sochummy - how are the US forevers any different than the UK's 1st?

While the US is bigger and presumably has more sorting/cancelling machines, it should also have more resources - i.e. the burden per capita should be similar.

When WWII gets really going, we will no longer have to worry about Chinese counterfeits.

They really should print stamps that simulate engraved stamps so you can run your fingernails across them to see if they are real, like a $20 bill. At least it would be harder to fake them.

UK's 1st include:

- Definitive Stamps (Invalidated): These are the "workhorse" stamps used by the billions. Because they all look the same, they were the primary target for mass-market counterfeiters. By forcing a switch to barcodes, Royal Mail killed the fraud market for 95% of the mail stream.

- Commemorative/Special Stamps (Still Valid): These are issued in smaller batches and have complex, changing artwork. Counterfeiters rarely bother with them because they aren't used in bulk by businesses. Royal Mail decided the risk was low enough that they didn't need to force collectors to swap them out or add barcodes to them.

US forevers: virtually every stamp has counterfeiters.