WASHINGTON - Like any good businessman, David Failor works hard to understand his customers and make sure he has a product they will want to buy - and maybe save.

That's when his employer, the U.S. Postal Service, reaps a big profit.

Stamps that are bought but not used mean $150 million to $200 million annually for the Postal Service.

It's Failor's job, as director of stamp services, to make sure there is a ready supply of eye-appealing stamps on the market.

"People really look at the stamps they put on a letter. They want attractive stamps," Failor said in an interview.

Of course, any stamp would get the material delivered. Attractive ones draw more customers and people who save some of those stamps.

Although fewer people are joining stamp clubs than in the past, large numbers of people still collect or at least accumulate stamps.

A stamp really is nothing more than a receipt for prepayment of postage. So collectors pay for the service of having their letter delivered, take the receipt that proves they paid, but never demand the service.

Many people collect used stamps. But their postmarks make them less attractive to others who want items in mint condition, which are a better investment over the long term. For example, a 15-cent Henry Clay stamp issued in 1903 is now worth $5 used, but $170 in mint condition.

The number of stamps that are purchased but never used is in the millions every year.

Sales last year of philatelic products, including framed stamps, an annual stamp yearbook and other items, came to nearly $50 million, compared with $40 million a year earlier.

That total is in addition to the $150 million to $200 million the agency takes in from stamps that are purchased but not used.

Elvis is still king of that group.

The 29-cent Elvis Presley stamp issued in 1993 accounts for 124 million stamps bought but never used, the post office reports. That translates into almost $36 million in income for the agency.

The Postal Service made $22 million each from the wildflowers stamps that were issued in 1992 and the rock 'n roll series from 1993.

Others in the top moneymakers included those with sports themes - baseball and the Olympics - and stamps featuring America, its land, its heritage and its history.

The first U.S. postage stamps were issued in 1847 - a 5-cent Benjamin Franklin and an 10-cent George Washington. They remained in use for many years, with the colors changing somewhat. A 1-cent Franklin and a 3-cent Washington were added in the 1850s.

Today, a mint-condition original Franklin sells for $6,250 to $12,599 depending on its shade of brown or orange. A mint Washington is valued at $27,500.

Over the years, stamps featuring other presidents and politicians came out. But Failor says it was in 1893 that the post office seemed to realize it could make money from collectors.

That year a colorful series of 16 stamps was issued to mark the Columbian Exposition, featuring images of Columbus, his ships and Spain's Queen Isabella.

Today the Postal Service tries to issue commemorative stamps covering 25 to 30 subjects annually. It gets as many as 50,000 proposals each year. They are checked to make sure they meet the standards for a stamp such as featuring mainly American subjects, not honoring a living person and not featuring any commercial, fraternal, sectarian or political organization.

The ones that meet standards go to the Citizen's Stamp Advisory Committee. The committee makes its recommendation to the postmaster general, who has the final decision.

When a topic is selected, an artist is commissioned to design the stamp. Artists are paid $5,000 for their work, which then becomes the property of the post office.

When an individual is involved, such as John Wayne, the estate has to give permission. That can take considerable negotiations or effort, which was the case in finding just the right portrait of President Reagan to please Nancy Reagan, Failor said.

Failor said he often gets proposals for a NASCAR stamp and shudders to think of the hours of legal negotiations that would be involved in getting permission for all the commercial brands that cover those race cars.

In addition, he noted, a current driver could not be used. Except for former presidents, no one can be honored on a stamp until 10 years after his death.