March 29 (Bloomberg) -- In Robert Heinlein’s classic novella “The Man Who Sold the Moon,” an entrepreneur raises money for a lunar expedition by warning a soft-drink company that, without its support, he might have to turn to a competitor that will pay him to display its logo on the surface, where it will be visible from Earth.
The story came to mind when I read about the recent decision by the U.S. Postal Service to license the slogan “Rain Heat & Snow” to a manufacturer of all-weather clothing. Much of the news media misreported the story, suggesting the USPS was planning to sell its own line of apparel.
What makes this and other Postal Service rumors so eminently reportable is that the USPS is in big trouble, and everybody knows it. The Postal Service, which by its own estimate handles 40 percent of all the mail delivered in the world, lost $15.9 billion last year, on revenue of $65 billion. Its unfunded pension liabilities are close to $50 billion.
USPS receives no tax dollars. It has to eat what it kills. Yet new revenue is scarce, as are viable ideas for reducing spending. The Postal Service’s hasty sales from its real estate portfolio haven’t raised much money. Its plan to end delivery on Saturday would have saved $2 billion, but Congress killed the idea, at least through the end of September.
Some say the U.S. should follow the lead of the many other countries that have privatized the post office. Short of that politically unlikely solution, about the only money-making strategy left is to follow Heinlein’s advice and sell the moon.
Which is to say: It’s time for the Postal Service to monetize its most valuable tangible asset and offer advertising space on the 22 billion stamps it sells each year.
The idea isn’t entirely new. In 1981, the USPS proposed selling advertisements on the booklets holding stamps (not on the stamps themselves), an idea that went nowhere. Beginning in the late 19th century, several other nations, including Great Britain, began to allow advertising on the obverse side of stamps, as well as on what is known as the selvedge (the page edges that are left when you tear out the stamps).
The postal service already has a “vanity stamp” program allowing users to pay for customized stamps for their own use: Anycorp can order stamps bearing its logo, a bride and groom can display their wedding date. The program was the subject of scandal early on, when customers began producing stamps bearing, for example, the likeness of Ted Kaczynski. In any event, it has never produced much revenue.
The program was a good idea, weakly executed. USPS should take it further, and sell space not on specially ordered vanity stamps but on stamps in general circulation. The idea would be that Anycorp’s stamps, rather than being used simply on its own mail, would be for sale at every post office.
I have no idea what rates the market might bear. But private companies that print stamps carrying business logos often charge more than twice the face value of the postage. Were the USPS to emboss logos directly on first-class stamps at a cost of, say, 30 cents each -- not bad for a guaranteed view of the ad by the recipient -- the deficit could be cut by as much as $6.6 billion, or more than 40 percent. If USPS were to sell advertising on postmarks or bulk-rate cancellations, revenue could be higher still.
Now, you might immediately object that nobody will buy branded stamps -- that the customer at the counter, faced with a choice of a stamp bearing the Anycorp logo or a stamp bearing whichever historical figure USPS has most recently chosen to honor, will choose the commemorative. I’m not sure. People plunk down good money for the honor of being allowed to dress as walking advertisements for Nike. A stamp bearing the Nike logo or images from “Mad Men” might be a huge seller.
Nevertheless, let’s assume that the median stamp buyer would shun the Anycorp stamps, or even the Nike stamps. How then to monetize the considerable asset that the space on postage stamps represents?
Two solutions come to mind. First, the Postal Service might end the sale of commemorative stamps entirely, and sell only branded stamps. This might cause a revolution, especially at Christmas.
In the alternative, then, the USPS could place a logo in the corner of its commemorative stamps -- all its commemorative stamps. More to the point, USPS could auction off the right to sponsor some set of its stamps for a period of time. For three years, say, every stamp sold honoring a great American would be sponsored by Microsoft; every stamp honoring wildlife would be sponsored by Starbucks.
You might object that this would be disrespectful to George Washington or the tufted puffin, to pick two currently available stamps. But is this necessarily so? If I buy a book about the first president or about the varieties of auks, and the name and logo of the publisher are embossed on the cover and the frontispiece, I don’t worry about whether I’ve become a toady of corporate America.
Selling advertising space would require a change in law, but so would most other tools by which USPS might increase revenue. As Walter Russell Mead has put it, “A Postal Service that can survive will need to be able to pursue new business opportunities without saying ‘Congress, may I?’ at every turn.”
Still don’t like the idea? Think stamps should be sacrosanct? Let’s turn back to Heinlein’s story. His protagonist, Delos Harriman, isn’t trying to get rich. He just wants to go to the moon. “I would cheat, lie, steal, beg, bribe,” he says, with no sense of shame. He seeks corporate sponsors because he sees no other way to raise the capital he needs.
That’s where the Postal Service finds itself. Certainly it would be nice to live in a world where stamps remain commercial-free. I’m no fan of selling off our public spaces. But the Postal Service can no longer survive on its own. At some point, like Harriman, it will have to go where the money is.
(Stephen L. Carter is a Bloomberg View columnist and a professor of law at Yale University. He is the author of “The Violence of Peace: America’s Wars in the Age of Obama,” and the novel “The Impeachment of Abraham Lincoln.” The opinions expressed are his own.)
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