Supermarket trade group asks PRC to stop USPS gift card sales test

The Food Marketing Institute (FMI), a trade group representing retail supermarkets, has asked the Postal Regulatory Commission to call a halt to the Postal Service’s plan to sell gift cards in up to 5,000 post offices beginning in May:

Competition in the retail food industry is fierce, and many retailers consider gift cards to be a key convenience item that they provide consumers. The private sector is clearly meeting the public need for gift cards. The Postal Service’s filing acknowledges this fact.

FMI believes that this government-sponsored competition is unnecessary and exceeds the Postal Service’s authority pursuant to the PAEA. Indeed the Postal Regulatory Commission previously determined the sale of stored value cards is a nonpostal service prohibited by the Act. Market share acquired by the Postal Service will be at the expense of our members. Gift card sales and ancillary consumer purchases at food retailers will be reduced.

Forms of government competition like this not only hurt private enterprise, but local communities as well. FMI members pay billions in federal, state and local taxes each year and collect sales taxes as well. The Postal Service does not. Our members also contribute to their communities in a multitude of other ways, from raising money for local charities and schools to sponsoring local sports teams and providing food to those in need.

The Postal Service is seeking to offer a new nonpostal service in commercial markets unrelated to its core postal business. The Commission should order the Postal Service to cancel the market test. Gift cards are available in more outlets than ever. Competition is thriving in the private gift card marketplace, and allowing the Postal Service to sell gift cards would only serve to diminish it.

So far the proposed market test has drawn opposition from the American Bankers Association and Pitney-Bowes, while Hallmark Cards and American Express, both of whom have partnership agreements with the USPS, support it. American Express has a contract with the USPS to supply gift cards for the test.

  • brian

    Once again Congress says “they must expand their offerings and venture into new business” Then here we go.. Congress will say they cant now. BUt keep that level 11 in Podunk open

  • Stu

    Most of these complaining merchants probably sell postage stamps and postal packaging products. Will any of them sacrifice offering OUR goods for theirs????

  • Peter

    Let the USPS sell Gift Cards, if the public don’t want to buy them from the USPS, that’s their prerogative. More options, more competition, better results for the consumer. It will be interesting to see if the Gift Card suppliers can work with such a non-commercial, non-competitive outlet with staff who are non-receptive to anything new.

  • benny

    we wont sell milk and bread if they stop selling stamps…

  • B.L. Wilcox

    USPS should stick to the mission- deliver the mail !

  • Glenn

    How about the Bankers Assoc. & other retail groups STOP encouraging people to pay bills & doing business “on line?” That kills Postal Service business! Greeting card sales are a ‘natural’ product aligned to our delivery service. You can get your cards & mail ’em at the same place–one-stop shopping. It would also bolster First-class postage—our mainstay that’s been hit so hard by computer communications.

  • Mel

    Give me a break! Greeting cards are a very profitable part of store business. Everyone has an agenda and in this case, the food folks want everything their way! They do sell stamps (and the USPS gladly would turn that business over to the foodies) and sell EVERYTHING in their stores. I believe USPS under Potter wanted the stores to sell stamps so it seems the stores want everything their way. If the USPS makes greeting card sales successful, more power to them.