USPS's scanner missed all 800 counterfeit stamps in a live test
Summary
The Postal Service's inspector general ran a controlled test of the machine USPS relies on to catch counterfeit postage: 800 counterfeit stamps, placed on real mail, run through an Advanced Facer Canceller System 200 machine in the mode the Postal Service actually operates it in. All 800 passed as genuine. OIG traces about $337 million of an estimated $349 million in FY2026 revenue loss to that single operating-mode choice, with a further $1.7 billion at risk from a separate mail channel that has no counterfeit-detection capability at all.
A scanner with two settings, and the wrong one in daily use
About 500 AFCS 200 units⧉ run nationwide, processing nearly 7 billion mailpieces in FY2025. The machines can operate in a stricter high-revenue protection mode, which rejects mail failing either of two authenticity tests, or a low-revenue protection mode, which rejects mail only if it fails both. Postal Service officials told they choose the low-revenue setting for cost and service reasons -- rejecting far less mail overall. A follow-up nationwide test of 327 million pieces in April 2026 confirmed the gap: 7% of mail was rejected in low-revenue mode versus 22% in high-revenue mode.
View data as table
| Low-revenue mode: failed both tests | 3% |
|---|---|
| Low-revenue mode: total rejected | 7% |
| High-revenue mode: failed either test | 6.5% |
| High-revenue mode: total rejected | 22% |
One machine's setting accounts for nearly all the loss
's Results section puts a dollar figure⧉ on the AFCS 200's operating-mode gap alone: $337 million in potential FY2026 revenue loss (the Postal Service's own written response to the audit cites this same estimate as $336 million -- a small discrepancy between the two sections of the report). That's roughly 96.6% of 's $349 million total FY2026 loss estimate. A separate, unnamed mail-processing channel with no counterfeit-detection capability at all adds $1.7 billion more in revenue considers at risk, plus a further $47 million in loss attributes to yet another under-monitored entry point -- $19 million already realized between FY2024-2025, $28 million more projected through FY2027.
View data as table
| Revenue loss, FY2026 | 349,000,000 |
|---|---|
| Revenue at risk, FY2026 | 1,700,000,000 |
Slow everywhere else, too
The detection gap isn't limited to the mail-processing floor. found the Postal Service takes more than twice as long⧉ to disable online counterfeit-stamp sellers as comparable companies -- over 30 days by the Postal Service's own accounting, versus 8 days by 's contractor benchmark. That's on top of real, already-documented losses: the Postal Inspection Service seized 21.6 million counterfeit stamps worth $18.1 million in FY2025 alone, and in April 2026 a direct-mail marketing operator pleaded guilty to a scheme using nearly 400,000 counterfeit Forever stamps that cost the Postal Service more than $441,000.
The takeaway
- A live test found the detector doesn't detect, in the mode actually used. All 800 counterfeit stamps in 's controlled test passed as genuine under low-revenue protection mode.
- One setting accounts for nearly all of the estimated loss. The AFCS 200's low-revenue operating mode alone drives about 96.6% of 's $349 million FY2026 loss estimate.
- Management agreed with every fix, but its disagreement on the dollar figures wasn't uniform. For the $337 million AFCS 200 estimate, agreed with the calculation and cited an offsetting factor. For the $47 million other-channels estimate, it went further and disputed the number itself.
The public version of this report redacts several technical details -- the exact test criteria the machine uses in each mode, and the names of the additional mail-processing channels behind the $1.7 billion and $47 million estimates -- for security reasons; this piece quotes and cites only what left unredacted. The $349 million loss and $1.7 billion at-risk figures are separate estimates for separate channels and should not be added together. Postal Service management agreed with all four recommendations (one already closed), and its response section is headed "disagreed with the monetary impacts" -- but the detail underneath is more mixed: management said it agreed with the $337 million AFCS 200 calculation itself (citing an offsetting factor), while it explicitly disputed the validity of the separate $47 million estimate. The report doesn't fully reconcile its own summary header against that more qualified detail, and this piece presents it as written rather than resolving it on the Postal Service's behalf.
Sources(1) ▾
- U.S. Postal Service Office of Inspector General, Counterfeit Stamps (Audit Report No. 25-121-R26) (2026-06-16) — self-initiated audit of Postal Service and Postal Inspection Service efforts to mitigate counterfeit stamps, including a live controlled test of detection equipment, issued June 16, 2026. Read in full via curl with a browser user agent and pdftotext -layout. The public version of this report redacts several technical details (specific test-mode criteria and the names of some mail-processing channels/locations) for security reasons; facts below quote only the unredacted text and note where detail was withheld. uspsoig.gov · original document
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's Office of Inspector General tested⧉ the Postal Service's primary counterfeit-stamp detector -- the Advanced Facer Canceller System 200 (AFCS 200) -- by placing 800 counterfeit stamps on real pieces of First-Class Mail and running them through a live machine. Evaluated under low-revenue protection mode -- the mode Postal Service officials say they actually choose to run these machines in -- every one of the 800 counterfeit stamps incorrectly passed as genuine. estimates the resulting detection gap, combined with a second undetected mail channel, cost the Postal Service $349 million in FY2026 revenue and put $1.7 billion more at risk.