Postal Board Backs Off on 1st Class Hike

Postal officials today backed away from putting their first stamp of approval on higher rates for first-class letters, but officials said they could not delay an increase indefinitely.

The Postal Service Board of Governors felt it needed more information on expected increases in labor, retirement and other employee benefit costs before going ahead with authorization of an increase, said John Griesemer, board chairman.

As the board resumed a two-day meeting today, it enacted changes in c.o.d. rules to take effect June 7.

No Longer Middleman

Under the rules, buyers of merchandise sent “collect on delivery” will no longer make out their checks to the post office. Instead, checks would be made payable directly to the seller, removing the postal service from its role as financial middleman.

The service was stuck with about $500,000 in uncollectible checks in 1985, largely as the result of disappointed customers stopping payment for merchandise, officials said.

Consideration of a postage rate boost was prompted by an expected $2-billion increase in costs--including a new employee retirement system--over the next two years.

Postal officials last raised first-class letter rates on Feb. 17, 1985, to 22 cents.

A proposal for a rate increase from the Postal Service governing board starts a complex process taking 12 to 16 months, beginning with hearings by the Independent Postal Rate Commission.