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Postage hike adds up for some

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While it seems small, that 2-cent increase on the price of a postage stamp will cost businesses a bundle, and it could spark a major push for more online bill-paying.

Effective Sunday, stamps will jump from 37 cents to 39 cents as part of a 5.4 percent across-the-board increase to postage rates and fees.

But the mail will go out as usual.

State Farm Insurance Cos. offices, for example, mail around 1 million letters on the average day, mostly bills and informative letters to policyholders. Last year, it spent $204 million on mail. This year, State Farm will pay an extra $11 million, said spokeswoman Missy Lundberg.

"Obviously with this increase, we'll be looking for things throughout the year to save money," she said.

Country Insurance & Financial Services sends out about 12.5 million letters to Illinois residents each year.

"In Illinois alone, it's going to cost us about $290,000 in additional postage fees," said spokesman Alexander Williams.

NicorGas, meanwhile, expects to pay around $500,000 more this year for postage. The company sends out more than 20 million pieces of mail a year.

"That 20 million (figure) is just bills, but then we have other stuff as well - (informative) brochures. We send out a lot of miscellaneous mail as well," said NicorGas spokesman Bernie Anderson.

By presorting mail, the three companies earn better deals on bulk mail. For example, State Farm saves about $30 million, Lundberg said.

Still, that's a benefit they're exhausting and the postage increase is across the board. Companies will look for other ways to save.

To beat the increase, many companies will ask customers to pay bills online, rather than receive a bill in the mail.

"That's going to be pushed much harder," said Anderson. "People will ask, 'What's the benefit for me?' Well, you're not paying the postage to send it back."

This will be the first time the post office has raised rates since 2002.

It is being done as part of a federal law that requires the U.S. Postal Service to establish a $3.1 billion reserve account.

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