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Why does it matter that Walmart offers it at a lower price? No one is forcing you to go to USPS. All that suggests is that USPS set the service at a price where

Why does it matter that Walmart offers it at a lower price? No one is forcing you to go to USPS. All that suggests is that USPS set the service at a price where it should be profitable. Walmart may subsidize the service assuming you’ll spend money in store and they’ll get several more dollars out of the transaction. Even less expensive, grocery stores have long done cash checking for free when you check out at the store. It is hard for me to be upset about a new service that is less expensive than the set of companies gouging people, but has some competitors that are cheaper. I don’t get up in arms over price differences between target and Walmart, why should I between USPS and Walmart?

lpolovets 5y ago
> No one is forcing you to go to USPS. First, the government does force you to use USPS for some things. The USPS has a monopoly on the delivery of certain types of mail. Second, we all pay for USPS as taxpayers regardless of whether we use its ancillary services. Well, we won't pay if check cashing is a profitable program, but we will if it's not -- and I'm skeptical that it will be profitable given you have fraud costs, training costs, etc. > Walmart may subsidize the service assuming you’ll spend money in store and they’ll get several more dollars out of the transaction. Even less expensive, grocery stores have long done cash checking for free when you check out at the store. To me these are both reasons for the government not to get into this business. If Walmart offers a lower price, whether that's a loss leader or not, it's great for consumers. IMHO govt services make sense when private industry can't provide them effectively. That doesn't seem like the case here. > It is hard for me to be upset about a new service that is less expensive than the set of companies gouging people, but has some competitors that are cheaper. Zero qualms about other companies offering new services. If they work well, those companies will succeed, and if not, they will fail. And success is based on making customers happier than competitors do. That's not the case with government services. If they work well, great, and if not, everyone subsidizes them. For example if a startup launches check cashing and loses $10m because of fraud, they go under. If the USPS ends up losing $1b due to check fraud next year, I'm guessing they'll just ask for $1b more in funding the following year. And if check cashing seems like a good direction, should the government develop its own reward credit cards? Buy now, pay later? Crypto exchanges? Etc.
- throw0101a 5y ago
  > First, the government does force you to use USPS for some things. The USPS has a monopoly on the delivery of certain types of mail. What type of mail does the USPS deliver that you cannot pay FedEx, UPS, DHL, etc, to deliver?
  - lpolovets 5y ago
    They have a monopoly over letters and your mailbox. See: https://www.cato.org/tax-budget-bulletin/privatizing-us-postal-service#:~:text=USPS%20Advantages,postal%20systems%20in%20the%20world https://www.cato.org/tax-budget-bulletin/privatizing-us-post....
- smt88 5y ago
  > First, the government does force you to use USPS for some things. The person you were replying to was referring to USPS's upcoming banking services, not their mail services. > we all pay for USPS as taxpayers regardless of whether we use its ancillary services We do not. USPS has its own books and does not receive taxpayer funds directly[1][2]. > To me these are both reasons for the government not to get into this business. If Walmart offers a lower price, whether that's a loss leader or not, it's great for consumers. The problem is not that banking services are unavailable or that Walmart isn't offering them cheaply. It's that Walmart isn't guaranteed to continue to offer them cheaply, and it doesn't serve nearly as many rural places as post offices do. There are post offices absolutely everywhere in the US. The same is not true of Walmarts. > IMHO govt services make sense when private industry can't provide them effectively. That doesn't seem like the case here. 25% of Americans are underserved by banking as of a few years ago, so obviously something is wrong that the free market has not been able to solve[3]. Retail banking is not very profitable, so there isn't much incentive for existing banks to do a good job of it. > I'm guessing they'll just ask for $1b more in funding the following year Again, that's not how USPS works. > And if check cashing seems like a good direction, should the government develop its own reward credit cards? Buy now, pay later? Crypto exchanges? Etc. Ah, so we get to the "what about the slippery slope?!" part of the argument. It's not black and white. We need to assess each case based on real data, not based on theory. No one is saying the government should compete in every industry just because it wants to cash checks for people who have been exploited by payday lenders. We have nationalized libraries and schools, but somehow we haven't slipped down the slope to nationalized grocery stores. I think we'll be OK if USPS offers a very simple service that isn't far off from things they already do (like cashier's checks). 1. https://www.brookings.edu/blog/up-front/2020/08/26/how-is-the-u-s-postal-service-governed-and-funded/ https://www.brookings.edu/blog/up-front/2020/08/26/how-is-th... 2. https://facts.usps.com/top-facts/ https://facts.usps.com/top-facts/ 3. https://www.cnbc.com/2019/03/08/25percent-of-us-households-are-either-unbanked-or-underbanked.html https://www.cnbc.com/2019/03/08/25percent-of-us-households-a...
bubblethink 5y ago
>Walmart may subsidize the service What is the cost of this service anyway ? Why isn't it close to 0 ? The $5+ fee quoted in this article seems absurd when letter delivery is in cents and $5 will get your stuff delivered across the country with priority mail in under 2 days.
- ceejayoz 5y ago
  Check cashing is a potentially risky business. If someone cashes a $1k check that bounces or was fraudulent, that's 200 fees gone.
throw0101a 5y ago
> All that suggests is that USPS set the service at a price where it should be profitable. Why? Why does everything have to be about profit? Or even breaking even. Can't the "profit" be the social good that the service provides?
- wan23 5y ago
  Not everything needs to be about profit, but the USPS is self-funded. It doesn't use tax money for its operations so it does need to try to break even at least on the services it provides.

lpolovets 5y ago

> No one is forcing you to go to USPS. First, the government does force you to use USPS for some things. The USPS has a monopoly on the delivery of certain types of mail. Second, we all pay for USPS as taxpayers regardless of whether we use its ancillary services. Well, we won't pay if check cashing is a profitable program, but we will if it's not -- and I'm skeptical that it will be profitable given you have fraud costs, training costs, etc. > Walmart may subsidize the service assuming you’ll spend money in store and they’ll get several more dollars out of the transaction. Even less expensive, grocery stores have long done cash checking for free when you check out at the store. To me these are both reasons for the government not to get into this business. If Walmart offers a lower price, whether that's a loss leader or not, it's great for consumers. IMHO govt services make sense when private industry can't provide them effectively. That doesn't seem like the case here. > It is hard for me to be upset about a new service that is less expensive than the set of companies gouging people, but has some competitors that are cheaper. Zero qualms about other companies offering new services. If they work well, those companies will succeed, and if not, they will fail. And success is based on making customers happier than competitors do. That's not the case with government services. If they work well, great, and if not, everyone subsidizes them. For example if a startup launches check cashing and loses $10m because of fraud, they go under. If the USPS ends up losing $1b due to check fraud next year, I'm guessing they'll just ask for $1b more in funding the following year. And if check cashing seems like a good direction, should the government develop its own reward credit cards? Buy now, pay later? Crypto exchanges? Etc.

throw0101a 5y ago
> First, the government does force you to use USPS for some things. The USPS has a monopoly on the delivery of certain types of mail. What type of mail does the USPS deliver that you cannot pay FedEx, UPS, DHL, etc, to deliver?
- lpolovets 5y ago
  They have a monopoly over letters and your mailbox. See: https://www.cato.org/tax-budget-bulletin/privatizing-us-postal-service#:~:text=USPS%20Advantages,postal%20systems%20in%20the%20world https://www.cato.org/tax-budget-bulletin/privatizing-us-post....
smt88 5y ago
> First, the government does force you to use USPS for some things. The person you were replying to was referring to USPS's upcoming banking services, not their mail services. > we all pay for USPS as taxpayers regardless of whether we use its ancillary services We do not. USPS has its own books and does not receive taxpayer funds directly[1][2]. > To me these are both reasons for the government not to get into this business. If Walmart offers a lower price, whether that's a loss leader or not, it's great for consumers. The problem is not that banking services are unavailable or that Walmart isn't offering them cheaply. It's that Walmart isn't guaranteed to continue to offer them cheaply, and it doesn't serve nearly as many rural places as post offices do. There are post offices absolutely everywhere in the US. The same is not true of Walmarts. > IMHO govt services make sense when private industry can't provide them effectively. That doesn't seem like the case here. 25% of Americans are underserved by banking as of a few years ago, so obviously something is wrong that the free market has not been able to solve[3]. Retail banking is not very profitable, so there isn't much incentive for existing banks to do a good job of it. > I'm guessing they'll just ask for $1b more in funding the following year Again, that's not how USPS works. > And if check cashing seems like a good direction, should the government develop its own reward credit cards? Buy now, pay later? Crypto exchanges? Etc. Ah, so we get to the "what about the slippery slope?!" part of the argument. It's not black and white. We need to assess each case based on real data, not based on theory. No one is saying the government should compete in every industry just because it wants to cash checks for people who have been exploited by payday lenders. We have nationalized libraries and schools, but somehow we haven't slipped down the slope to nationalized grocery stores. I think we'll be OK if USPS offers a very simple service that isn't far off from things they already do (like cashier's checks). 1. https://www.brookings.edu/blog/up-front/2020/08/26/how-is-the-u-s-postal-service-governed-and-funded/ https://www.brookings.edu/blog/up-front/2020/08/26/how-is-th... 2. https://facts.usps.com/top-facts/ https://facts.usps.com/top-facts/ 3. https://www.cnbc.com/2019/03/08/25percent-of-us-households-are-either-unbanked-or-underbanked.html https://www.cnbc.com/2019/03/08/25percent-of-us-households-a...

bubblethink 5y ago

>Walmart may subsidize the service What is the cost of this service anyway ? Why isn't it close to 0 ? The $5+ fee quoted in this article seems absurd when letter delivery is in cents and $5 will get your stuff delivered across the country with priority mail in under 2 days.

ceejayoz 5y ago
Check cashing is a potentially risky business. If someone cashes a $1k check that bounces or was fraudulent, that's 200 fees gone.

throw0101a 5y ago

> All that suggests is that USPS set the service at a price where it should be profitable. Why? Why does everything have to be about profit? Or even breaking even. Can't the "profit" be the social good that the service provides?

wan23 5y ago
Not everything needs to be about profit, but the USPS is self-funded. It doesn't use tax money for its operations so it does need to try to break even at least on the services it provides.