Frugal Living, Investing, Retirement 

When Frugality Is A Fault: Certified v. Regular Mail

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So I recently started the 401k to IRA rollover process, moving my assets from my former employer’s 401k plan to a Rollover IRA at Vanguard, and just today I received the check for the value of my assets that I would be sending off to Vanguard. The check is easily the largest single legitimate check I’ve held in my hand (beating a check that was the down payment for my house a year and a half ago) and I kind of wondered why the plan administrator would mail something so important in regular first class mail.

Anyway, I was very very tempted to just slap a thirty-nine cent stamp on the letter and mail it off but I thought better of it. While I’m pretty sure that there was a 99% chance the letter would make it there without any problems (I have faith in the USPS, even if Nick doesn’t), do I really want to deal with the hassle in that 1% case?

Let’s compare…
99%: I save myself a few bucks.
1%: I’d have a headache. First, it would take me a little while to learn that the check was lost, then I would have to request that my 401k plan administrator void the original check and reissue a new check. That request would likely come with some sort of (unreasonable) fee. Then, after I lose about three or four weeks of appreciation on a pretty sizable sum (to me anyway), I’d send it via certified mail this time. So… I think certified the first time is the route to go.

So, frugality can be a fault and in this case, saving a few bucks could potentially cost me a lot in terms of time, hassle, and money.

{ 14 comments, please add your thoughts now! }

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14 Responses to “When Frugality Is A Fault: Certified v. Regular Mail”

  1. Patty says:

    Yes, it appears reasonable to do this for your peace of mind, you would know sooner whether it got there or not. However sending certified doesn’t guarantee it gets there, it just tells you if it did. If it doesn’t you still have the delay of requesting a new check and their possible unreasonable fee.

  2. Jason says:

    The timeliness of this entry is amazing as I wrestled with this exact question this morning for the exact same reason! I too was rolling over a 401(k) to a Vanguard IRA. When I left home this morning I had the check in a first-class envelope with a $.39 stamp on it. When I got to my office, my over-thinking mind got the better of me and I took the envelope to the post office and sent it via priority. I learned something in the process though: the post office deducted the $.39 stamp from the cost of sending the check via priority.

  3. jpsfranks says:

    I have no idea what the USPS’s failure rate is, but I’m sure it’s several orders of magnitude lower than 1%.

    That being said, I probably would have done the same thing.

  4. Jeremy says:

    It is good for a piece of mind, but probably not necessary. I handle rollover and transfer checks all the time and we send regular mail 99% of the time. Occasionally we have an employee who wants us to send either UPS/Fedex overnight or something so they can track it. But I’ve sent and received checks upwards of $300,000 with a 39 cent stamp without issue (knock on wood!)

    As Patty said, certified mail really only allows for first class mail to be tracked and verified it was received by the correct party. It essentially has the same likelihood of being lost as regular mail. If you really want to send something through the mail with the most protection you should use Registered Mail. Registered Mail provides maximum protection and security for valuables. It provides the sender with mailing receipt and a delivery record is maintained by the USPS. A record of mailing is maintained at the mailing post office.

    Also, registered mail is handled separately from the regular mail and all handling recorded on a ledger by your carriers which would virtually eliminate the chance of getting lost.

    As for me, I stick a stamp on it and will deal with problems as they arise. I like the thrill of the possibility of unexpected headaches sure to arise when a large check is lost 😀

  5. jim says:

    Ahhhh, sounds like I should be doing Registered Mail instead of Certified.

  6. Jeremy says:


  7. MikeK. says:

    This is an interesting and funny post actually. All these thoughts of hypothetical problems with mail delivery. When I had this situation years ago. My father in law gave us a sizeable check (sizeable to me at that time). I ended up driving to a T.Rowe Price office and hand delivered the check for deposit. What way, I just eliminate all the mail risk.

    Now, I would have just put a stamp on it and not think twice. After all, once you go down that path of hypothetical risks you start to think things like: what if the clerk at the T.Rowe Price office mis-typed my deposit and put the wrong account number in? Or, what if this T. Rowe Price office gets fire bombed the moment after I deposit, what then? Or what if my car catches on fire on my way to T. Rowe Price and I lose the check in the fire?

    Sometimes, its just not worth thinking about things beyond your control.

  8. Tim says:

    I would send my stuff certified, getting it there is only 1/2 of the battle,getting a bone head on the other end of the phone to admit that it is there is the other half.
    Try a .39 stamp on property taxes or big rebates,if they say they never got it,your hung out to dry.
    With certified,you can go online the next day and ask for E-mail notification when delivered.
    You can even ask for an E-mail to be sent out in front of delivery to the person you are sending the letter to. Take that old ” checks in the mail ” out of the arguement.

  9. Weekly Roundup – 01/26/07

    Here’s a quick look at some articles that caught my eye over the past week:

    JLP talked about retirement risks.
    Jim talked about when frugality is a fault.
    Flexo is having trouble with his TIAA-CREF SEP-IRA.
    FMF talked about the best place to sa…

  10. Rob Carlson says:

    A few months ago my rollover check made it all the way to Wachovia, was received by them, and then lost on some guy’s desk inside the company. When we all finally figured it out, I had to go through the whole lost check procedure even though it was their fault. So the postal service is only one part of the process that might possibly go wrong, and it has a pretty good track record.

  11. jersey jen says:

    i think when i convert 401k from t. row price to a rollover ira at schwab, i filled out a form and gave them the new account number. too bad i never get to see the big check. nevertheless, when i was doing my b-school applications, i sent everything first class with delivery confirmation (plus waiting in long lines at post office).

  12. Bob Max says:

    I’ve heard of some large corp. mailing out checks even if your intention was a direct rollover-
    in any case, a lost 401K check is compounded by the fact after 30-60 days you’ve got to now prove to the IRS you don’t owe them early withdrawal penalties on the lost life-time savings- EGAD!!

    GO Registered Mail- Crap Happens!!!

  13. Joe L says:

    Although the mail system does work 99% of the time, I am currently an example where it does not. I requested a IRA rollover to an another IRA (via Direct rollover) and the bank decided to cut a check. 30 days later the company holding the new ira has not received the check. Trust me, after 10 phone calls and countless hours on the phone on a problem that is unresolved as of today, taking the extra step to hand carry or pay extra postage is well worth the effort than slapping on a 39 cent stamp. I agree its not always USPS whereas I have a mortgage payment lay on someone’s desk for two weeks.

  14. Amar Khanna says:

    I wish I’d read this thread before mailing my passport out via certified mail. It’s been 13 days now and the Tracking tool on the USPS website says, ‘your item was missent, we have corrected the problem and will be delivering it shortly.’ When I call customer service, they basically parrot the same statement adding, ‘someone will be calling you shortly.’
    If only I had sent my passport via Registered mail and not listened to the USPS official who said, ‘Certified Mail is a good enough option, it’ll be fine…’

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