Red's Hop In Market is Malone's new Village Post Office. It will offer basic services as the Postal Service attempts to cut back its budget.
Red's Hop In Market is Malone's new Village Post Office. It will offer basic services as the Postal Service attempts to cut back its budget. - 

Kai Ryssdal: You know who doesn't have to worry about a double-dip recession? The United States Postal Service, that's who. Not because it's recession-proof -- quite the contrary. The Post Office still hasn't come out of its first dip. It's been financially troubled for a long time. This year it has expected to be $9 billion in the red. So the USPS says it's going to close upwards of 3,700 post offices.

Some of them will be replaced with village post offices. Outlets, kind of, inside an existing grocery store or other local retailer. The first Village P.O. is opening today in a tiny town in Washington state.

Marketplace's Jennifer Collins went to check it out.


Jennifer Collins: "Town" might be a tad grandiose for Malone, Wash. It's just six blocks of houses nestled in forest and farmland about 50 miles from the coast. Cheryl Lee never even knew it existed until...

Cheryl Lee: One day my husband came home and said, "Honey we're opening a store in Malone." And I said, "Where in the heck is Malone?"

Actually, it was 30 miles from her house. The store, Red's Hop In Market, is Malone's one-stop shop for coffee, cigarettes, beer, socks and...

Lee: Pickled sausages. People really like them. There's a Hot Mama, which is the spicier version. And a Big Daddy is the less spicy version.

Beginning today, Red's will also be the Village Post Office. Red's will sell stamps and flat-rate packages and rent mailboxes.

Dean Granholm is the vice president of U.S. Post Office operations.

Dean Granholm: I think Malone was costing us about $85,000 to $90,000 a year and was bringing in less than $20,000 a year.

He says, by putting a scaled-down version of the post office inside a store, it'll be much cheaper to operate.

And there's a much bigger post office a few miles away that handles home delivery and complicated shipments.

I ran into Malone resident Darlene Gainey there. She was picking up 75 white and brown chicks. I asked her what she thought about losing Malone's post office.

Darlene Gainey: I was amazed they kept it open for so long, because it was such a small post office.

The Postal Service will pay Red's Hop In Market about $2,000 dollars a year to become the new Village Post. Red's may also cash in on increased sales from customers who stop in to send a package and leave with a gallon of milk. Dean Granholm says that makes the Village Post Office a hot contract.

Granholm: We do have some towns that have several stores that are really interested in the Village Post Office concept.

Right now the Village Post Office and closures may only save about $200 million a year, a sliver of the Postal Service shortfall.

Lee Fritschler: It's not, I would say, a drastic change. It is a marginal change.

Public policy professor Lee Fritschler of George Mason University says if the Village Post Office concept catches on, it could replace thousands of money-losing post offices.

Fritschler: If I could do my mail business while I was shopping for my Cheerios and Wheaties at the local supermarket, I think I would view that as a real convenience.

And in many towns, the village post will be a return the old ways. Nancy Graves fills in for Malone's postmaster on Saturdays. She'd probably be mayor if they had one. She's the secretary/treasurer of the water system and unofficial town historian. She shows me a picture from 1912.

Nancy Graves: When they brought the post office to Malone, they put it in the store.

That was fine in 1912. But some people in town aren't so comfortable it in 2011.

Graves: A lot of people are worried about the security because people still get their checks through the mail.

Still, if the choice is Village Post Office or no post office...

Graves: I definitely wouldn't want to lose the post office, period. I mean, would we even be a place?

For now, Malone will still a place with its own zip code: 98559.

I'm Jennifer Collins for Marketplace.