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 Serviceâ€™s filing acknowledges this fact.
FMI believes that this government-sponsored competition is unnecessary and exceeds the Postal Serviceâ€™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.