A few months ago, there was an announcement that post offices will start selling gift cards in select locations nationwide. This week alone, an estimated 1800 locations are already participating reportedly and they are set to roll out to 3,000 more locations over the next three months.
USPS has teamed up with American Express to run a market trial focused on presenting consumers a different way to purchase cards and retail product, with the goal of bringing in extra revenue. The cards will be available in $25 and $50 amounts as well as a variable $25 to $100 option.
All the cards that will be sold at the USPS locations are “open loop” and are the type of cards that are accepted anywhere Credit or Debit cards are accepted. This unlike the specific store gift cards gives consumers a broader variety of spending options and in turn brings in more revenue. The gift cards are also being sold alongside greeting cards – already being sold- to take advantage of both avenues. USPS receives a portion of the purchase fee for the cards: $3.95 for the $25 card, rising to $5.95 for the variable-denomination card.
USPS plans to run this market trial for up to two years to test out the sale of gift cards. During the trial period, USPS will try out different price structures and can expand the test to include vendors other than American Express, which is just the first company to join the program.
In the US, the gift card market is thought to be worth around $86bn/year and for American Express is $1billion/year. First data reported that popularity of gift cards are rising again following a decline due to the recession. According to the National Retail Federation, gift cards are the most requested gifts among American adults in the last 4 years.