USPS Loses $3.1 Billion to Counterfeit Labels Over Two Years
The U.S. Postal Service lost an estimated $3.1 billion to counterfeit package labels between March 2024 and February 2026, according to a new Inspector General audit. The audit also found that approximately 2 million paid packages were mistakenly routed for extra processing from December 2024 through February 2026 because of processing or mail-entry errors.
Postal Service tracking data showed that 97 percent of counterfeit labels were still processed for delivery from October 2023 through February 2026, indicating limited success of interception systems. Counterfeit labels alone caused an estimated $1.6 billion loss in fiscal year 2025, when USPS generated $32.6 billion from shipping 6.8 billion packages. The OIG estimates the agency could lose another $520 million through February 2028 if current trends continue, raising the total potential impact to more than $3.6 billion over four years. An internal USPS analysis of April 2026 volume attributed 47 percent of the mistaken‑package errors to employees or technology and 52 percent to customers failing to transmit payment records before entering packages into the mailstream.
Earlier reports in April noted that online sellers were seeing packages rejected at drop‑off as “unpaid” as USPS rolled out stricter postage‑verification measures. The September 10 Inspector General report expands on those earlier observations by providing a broader view of the counterfeit‑label problem and its financial impact.
What we know
OIG estimates USPS lost $3.1 billion in unrecoverable revenue from counterfeit labels between March 2024 and February 2026 and could lose another $520 million through February 2028, putting the total potential impact at more than $3.6 billion over four years.
The Office of Inspector General now says approximately 2 million paid packages were mistakenly routed for additional processing from December 2024 through February 2026 because of processing or mail-entry errors.
But the systems intended to stop those packages had limited success for much of that period, with Postal Service tracking data showing 97% of counterfeit labels were still processed for delivery from October 2023 through February 2026.
Counterfeit labels alone accounted for an estimated $1.6 billion loss in fiscal year 2025, when USPS generated $32.6 billion from shipping 6.8 billion packages.