Counterfeit Forever Stamps

In the UK, Royal Mail is a private company (PLC). While they are regulated, they have more flexibility to change their "Terms of Business," including which stamps they accept.
The USPS is a government-related entity tied to federal law. Because Forever stamps were sold as non-expiring, many legal experts argue that the USPS cannot unilaterally "turn them off." Any attempt to do so would likely be tied up in federal courts for years, making a quick transition to barcodes impossible.

The math of the "swap" is much harder in the U.S.:
- Royal Mail: Processes about 7 billion letters a year. They handled the swap for a population of 67 million.
- USPS: Processes over 116 billion letters a year for 330 million people.
To "copy the UK," the USPS would have to process "Swap Out" forms for billions of stamps held by the public. The administrative cost of counting, verifying, and shipping out new barcoded stamps to every household in America would likely cost more than the money they lose to counterfeits.

Now they can fake engraved stamps. The "Boston 2026" issue is an example.

100% this.

However, the U.S. government (regardless of which party holds power) absolutely LOVES to create new bureaucracy. Plan on a Department of Postal Legitimacy Oversight coming soon.

/s

Yes, engraving is no longer a line of defense against the crooks. As with tagging before it, etc. The China counterfeiting tech is strong enough that it's now very much a game of cat-and-mouse with them.

The UK barcodes have helped (Royal Mail claims fraud has dropped 90%) but Chinese-made fakes are still flooding the market: https://www.telegraph.co.uk/money/c...omic-warfare

So there's obviously still a market for Chinese knockoffs, or the problem wouldn't be continuing. This despite the fact that some are getting £5 postage due counterfeit fines assessed at delivery, which has upset quite a few recipients (understandably.

It's just too easy to make the fakes and smuggle them into the country. Think about how many travelers there are between the UK and China every day, for example; how hard would it be to just throw a block of sheets in a suitcase, with the courier getting a nice little reward for their efforts?

As for political pressure, both the UK and the US have more pressing issues to deal with when it comes to China. Counterfeit stamps fall way down the list, which means it'll be up to postal administrations to try and solve the problem themselves. The Royal Mail solution is by no means perfect, but it's a step in the right direction.

At the very least, USPS ought to be copying what Royal Mail has done and implement barcodes on stamps.



First-class mail volume in the US was 42 billion last year: https://about.usps.com/who/profile/...nce-1926.htm

One forgets the monumental technological overhaul (and resulting expense) that would be required to accommodate this, at least at the software level, from electronic eye sorting equipment, to point-of-sale systems that would now presumably need to accommodate these barcodes in addition to the ones they already deal with.

This might address the problem somewhat moving forward, assuming that the counterfeiters can't find a way around it, but it doesn't address the BILLIONS of currently valid postage stamps in the wild. You can't just invalidate those.

Given the comparative dollar amounts in play, the cure may be more expensive than the disease.

What does "The math of the "swap" is much harder in the U.S" have to do with outfitting sorting/cancelling machines with bar code readers?

As for the swap, your math is all wrong. First of all, the number of "letters" mailed is not the relevant number. Most of the mail in the US is sent without stamps and many that do have stamps is bulk/junk mail that uses 5c or 10c stamps that they have not been counterfeiting. The relevant number is the number of stamps held by the public, both mailers and collectors/dealers (some of those would not be turned in). Yes, the US is bigger than the UK, so the total number of stamps being held is larger, but again, being larger means we also have more resources. Would it cost any more to swap out each stamp in the US than in the UK? Is the % of counterfeit being used in the US any higher or lower than it was in the UK? The real relevant number is the total cost of swapping out all the stamps offered Vs the total loss on all the counterfeits being used. I have no idea which is higher. I suspect the cost of swapping out all the stamps that would be offered would be rather high (and the counterfeits have gotten so good they people doing the swaps for the PO probably would accept some of them).

edited to finish writing after accidentally hitting post

"One forgets the monumental technological overhaul (and resulting expense) that would be required to accommodate this, at least at the software level, from electronic eye sorting equipment, to point-of-sale systems that would now presumably need to accommodate these barcodes in addition to the ones they already deal with."

If the UK could do it, why can't the US?

"If the UK could do it, why can't the US?"

They *CAN* do it, the question is whether it is worth the costs involved. Many more post offices here in the U.S., more sorting hubs, etc.

I'm sure there are bean counters crunching numbers to determine whether the dollars lost through counterfeiting is sufficient to justify the retooling expense (not just upfront expenses, but maintenance, retraining, etc., as you increase the complexity of underlying systems and processes), especially in light of the current fiscal deficit woes.

We'll see. *shrug*

You are 100% right that the "total letters" count is the wrong metric. Bulk and metered mail is irrelevant here. It is strictly about the Stamp Pool held by the public. And you are also right that a larger country has more resources.
However, the reason the math still "fails" in the U.S. isn't just about the number of stamps. It is about the security risk and the legal contract of the "Forever" brand:

The "Laundering" Trap: You hit the nail on the head regarding high-quality fakes. If the USPS opens a swap, they are essentially offering to "clean" the counterfeiters' inventory. A fraudster could turn in $100k of high-quality fakes and get $100k of genuine, barcoded stamps in return. To prevent this, every single stamp turned in would have to be scanned by a high-end forensic lab. Royal Mail actually had a scandal where their scanners wrongly flagged genuine stamps as fakes during their swap, leading them to appoint an independent arbitrator to settle the disputes.

The "Forever" Contract: This is the real killer. In the UK, Royal Mail (a private company) could simply say, "As of July 2023, these are no longer valid." But in the U.S., "Forever" stamps were sold with a legal promise that they would never expire. USPS policy states that all stamps issued since 1860 are still valid. Forcing a swap could be challenged as an unconstitutional "taking" of private property under the Fifth Amendment's Takings Clause. Since these stamps have a fixed cash value, invalidating them without "just compensation" would trigger massive class-action lawsuits.

The Cost-Benefit: The USPS prints about 13.8 billion stamps a year. Even if we only swapped out 10 billion stamps (a fraction of the total pool), a processing cost of just $0.10 per stamp for secure logistics and forensic checks puts the bill at $1 billion. When the USPIS reports annual counterfeit losses at roughly $600 million, spending $1B to solve it is a hard sell to a Congress that is already looking at a $9.5 billion net loss for FY2024.

Basically, the UK could do a "hard reset" because they are a smaller, private entity. The USPS is trapped by a 20-year-old promise that makes a digital upgrade a legal and logistical nightmare.

It's a fair, difficult question about whether the cure is more expensive than the disease. Still, I don't think it sends the right signal to essentially throw in the towel and give up on revenue protection. Something needs to be done. The problem only keeps getting worse.

I'll stir the pot again and say that it's time to abolish new stamp issues. At this point, every new issue is just increasing the attack surface for counterfeiters. Introduce the written one-time-use code for those who are just sending a small handful of letters. For wedding invites and holiday cards and the like, drop them off at a post office and get them mailed there.

That won't solve the Forever stamps quandary, but at least it will stop growing the problem.

They could then honor existing Forever stamps indefinitely (although what's to stop fraudsters from printing up a billion more Boston 2026 sheets?) or give people a redemption window for a swap out scheme as in the UK, except instead of new stamps, you get USPS 'store credit'. Keep that system going on for several years and it'll be likelier to withstand legal challenges, I'd think.

Regarding the technical barriers to determining whether something's counterfeit or not: the problem is implementing detection at massive scale throughout the system. Presumably if detection of counterfeits was happening in a handful of dedicated facilities (where the swap outs are processed, for example), then USPS can concentrate resources on sniffing out counterfeits in a cost-effective manner. Make that process centralized and a lot of cost and complexity is removed.

sochumy: Your arguments fall flat on almost all premises.
1. Nobody says that LEGAL Forever stamps will not be LEGAL forever. That's just not an argument.
2. If somebody walks in with $100k of Forever stamps, warning lights will fire all over the place.Nevertheless, for such cases a few centralized swap stations would do the work. It is not needed for every Post Office all over the States.
3. If grandma walks in and wants to exchange 3 Forever stamps, you give her 3 coded stamps. Why bother. When she walks in the four hundredth time with 3 stamps, you take a good look at grandma.
4. Most counterfeits do not require sophisticated spectroscopic equipment. A good UV lamp and a manual about what to look for completely suffices.
5. You are assuming that even with controls set up, there will be 10 billion fake stamps every year (which is not a small fraction of stamps, it's the majority of stamps). Unless you forgot the "." in the 10). My guess is that the fake numbers will drop considerably once people realize they pay a hefty fine when caught (let's say 100-1000 times face value of the fakes). People do not do this voluntarily, they have to feel the pain in their purses.

It would take an effort by USPS but it would be doable.

You apparently have not seen any of the more recent counterfeit Forever stamps. They are tagged. They are virtually indistinguishable from legitimate stamps UNLESS meticulous scrutiny is applied... by an expert. Moreover, some of the counterfeit stamps have 10-20 DIFFERENT variants from different makers/counterfeiters.

There is no "at a glance" method that postal clerks could possibly be expected to undertake.

Drkohler:

This sounds practical only if you imagine USPS working like a stamp club.

First, "legal Forever stamps will always be legal" is irrelevant. The issue isn't legality, it's authentication. A counterfeit Forever stamp is also treated as "valid" by the system if it can't be detected. That's the whole problem.

"Just use a UV lamp and a manual" ignores reality. There are hundreds of designs, and plenty of counterfeits already mimic UV well enough to pass a quick check. That might work at a desk with one envelope. It doesn't work at scale.

USPS isn't inspecting a few stamps. They're processing massive volumes at high speed. There's no step where someone pauses and checks each stamp under UV.

Fines only matter if people actually get caught. If detection is low, the deterrent effect is weak.

So no, this isn't a "just use UV and common sense" fix. It's a system-scale problem, and your solution only works in a world that doesn't exist.

Forcing a swap could be challenged as an unconstitutional "taking" of private property under the Fifth Amendment's Takings Clause. Since these stamps have a fixed cash value, invalidating them without "just compensation" would trigger massive class-action lawsuits."

How is getting a new bar coded stamp not just compensation?

Why do several of you keep bring up that the US is bigger than the UK so it will cost more? Should we stop maintaining roads in the US because it will cost more since we have more miles of roads? We presumably have more counterfeit stamps being used in the US. The question is, which costs more - the total loss from counterfeits or the total cost of any particular solution?