It won't cost more to ship your holiday presents, but if something needs to go back, watch out -- sending something someplace is going to cost more in the new year.

Vote: Will the rate increase change your mailing habits?

The U.S. Postal Service will be raising its rates about 5.5 percent on Jan. 8, a move that has raised some concerns. Unlike in the past, when a rate increase was needed to offset costs, this increase comes at a time when the Postal Service is actually enjoying a $2.6 billion budget surplus.

Still, come early next year, a first-class stamp will cost 39 cents instead of today's 37 cents. Want it there fast? Express Mail will cost you an extra 75 cents.

Returning some holiday gifts? That's also getting pricier with increases for Parcel Post, Priority Mail, and Express Mail.

Thinking of going with a private company? FedEx and United Parcel Service are raising prices starting Jan. 2, and DHL will follow suit.

FedEx's fees will go up about 5.5 percent across the board, while UPS will charge 3.9 percent more for ground service and 5.5 percent more for overnight delivery. That's offset a little because both companies will be reducing their fuel surcharges by 2 percent.

DHL also said it will raise its rates about the same amount.

Roanokers, who sent more than 100 million first-class letters in 2005, are taking news of the mailing and shipping increases in stride ... although some may check the total cost more carefully before buying online.

"It's understandable as far as business goes," said Janet Geriesenbeck of Roanoke. "With the gas prices the way they are, everybody's expenses are going up."

The rise in shipping costs may cause her to think twice before clicking the "buy" button online, Geriesenbeck said. "I try to buy as much as I can locally. I like to support the local business. But you can't always get everything. When it comes to gifts, I think I would go to an alternative instead of paying for the shipping," she said.

Rich McConchie of Buchanan, a state employee with the Department of Rehabilitation Services, had a shorter-term perspective. He was glad the rates won't change till next year. "They could have gigged everything up during the Christmas season," he said, "but they didn't."

Henry Stripling, a clerk for Norfolk Southern in Roanoke, said he understands why the price had to go up. "I imagine with everyone e-mailing these days, they'd have to keep upping the rate to cover costs," he said.

But that turns out not to be the case.

Private companies change their rates for a variety of reasons -- increased fuel or personnel costs, for example, or simply to respond to competition -- but the Postal Service has to request an increase from the Postal Rate Commission.

The PRC hears arguments from the post office as well as anyone else who wants to weigh in, which usually means businesses that rely on mail: direct marketers, magazine publishers, and the like.

While those businesses aren't happy about the increased costs they incur, they recognize that prices do go up. They would just like it to be on a set schedule.

"They would prefer to have smaller increases that they could more or less plan on every year," said Shelley Dreifuss, director of the PRC's Office of the Consumer Advocate. The OCA represents the needs of consumers, and consumers, Dreifuss said, dislike the hassle of rate increases more than the amount.

"Consumers want to see their rates go up less frequently," she said. "You don't want to go through the trouble of scrambling for new stamps or make-up stamps."

One suggestion she's working on with the post office is a first-class "forever stamp" -- one without a set value that would always be good for sending a letter no matter what the cost.

"Consumers would purchase them anytime they like, and they'd be good on a first-class letter forever," she explained. The post office could raise rates every year (as businesses would prefer) and consumers wouldn't have the nuisance of buying new stamps.

A forever stamp is at least a year away from being a formal proposal, Dreifuss said. For now, businesses and consumers will have to deal with this increase, the first since 2002.

That might seem a reasonable amount of time for the price of a stamp to go up, but there's more to it. For the first time, the Postal Service has a surplus -- some $2.6 billion in the bank.

Here's the story: The Postal Service, as did many Federal agencies, contributed to the Civil Service Retirement System fund for federal employees. (It's a pension for workers hired before the mid-1990s, when that system was replaced by the Federal Employee Retirement System.)

But in a November 2002 audit, accountants for the Office of Personnel Management discovered that the money the post office was contributing was earning a lot more interest than anyone expected -- in fact, it had over-contributed to the tune of at least $70 billion.

Congress decided that this merited the Postal Service a three-year reprieve from contributing to the fund, and that it could use that money to pay off its $9.3 billion debt, which it did.

"We're virtually down to zero debt, and we kept our rates stable," said Gerry McKiernan, spokesman for the U.S. Postal Service.

Congress also said that, after 2005, the Postal Service had to start contributing to an escrow account -- and the first payment, due in September 2006, had to be $3.1 billion. Why? Congress hasn't decided yet. (The money will most likely be used toward the rising cost of health care benefits for retired USPS employees.)

Simply put, said Rick Smoot, the Postal Service's mailing standards specialist for the Appalachian district in Roanoke, had it not been for that $3.1 billion requirement, postage would not be going up.

"Because of that $3.1 billion that we were taxed with, we had to find some way to pay for it," he said.

So it filed for the increase with the Postage Rate Commission, and was granted the increase coming next month.

Dreifuss wasn't happy about that because the post office left out a crucial bit of information: $2.6 billion the post office has accumulated by not contributing to the pension fund since 2002.

That's a chunk of change that would go a long way to filling that $3.1 billion escrow account, which is what she suggested should be its first use. And that would mean the post office didn't need a 5 percent increase -- a 0.5 percent boost would do the trick.

But does the post office have a $2.6 billion surplus? It doesn't know, and it won't until Dec. 6 when the accounting for the past fiscal year (which ended in September) is complete, according to McKiernan.

But he doesn't think the number is that high. "I'd be surprised if it was $2.6 billion," he said, considering the post office's debt payments and continuing operations costs.

And he added something that might be part of the U.S. Postal Service's mantra: "I think it's very commendable that we've kept our rates stable since 2002."

Rich McConchie agreed. "I always thought it was amazing. For 37 cents you put a letter in the mailbox, and in three days, it can go all the way across the country. It is pretty mind-boggling."

andrew.kantor@roanoke.com 981-3384

christina.rogers@roanoke.com 981-3340