Royal Mail PLC to scrap first and second class stamps within a year

Royal Mail PLC (LSE:RMG) is abandoning its traditional first and second class stamps in favour of a barcode system, a move that will affect millions of stamps currently in the hands of the UK public.

The change, set to be in place from 31 January 2023, is likely to cause a rush to replace old stamps, which will be facilitated by Royal Mail in its free ‘Swap Out’ scheme.

After the cut-off date, a surcharge will be placed on any old-style stamps posted.

One-off commemorative stamps will remain in use beyond the cut-off date.

The decision is part of Royal Mail’s move towards digitisation of its operations, allowing packages to tracked using the Royal Mail app and will add another level of security to operations, it said.

Royal Mail continues to have the biggest market share in the UK among couriers, but has faced competition from the likes of more logistically advanced services like Amazon, Hermes and DHL in recent years. 

Stamps have proven a popular asset for fans of philatelic investment, a form of investment popularised in the 1970s that focused on collectable stamps, coincidentally most embraced during times of high inflation.

One Twitter user, @davidiancollins, claims to be among those worried about missing out on philatelic gains.

“Postage stamps have been the best performing asset class in my portfolio for most of past 2 decades. Ideally @RoyalMail would buy them back at today’s prices. At minimum they should continue to carry mail.”

Whether newfound scarcity positively impacts these minority investors remains to be seen.