Food Market Institute Urges PRC To Cancel USPS Request To Market Test Gift Cards

In January of this year, the Postal Service notified the Postal Regulatory Commission that it intends to conduct a market test of  Gift Cards. USPS said, “This product will provide postal customers with the ability to purchase a card loaded with a specified sum of money, which can be sent as a gift through the mail. The test will begin on or after May 1, 2011.”  American Express Travel Related Services Company has entered into a contract with USPS  to be the first supplier of gift cards in the experimental product test. However, Food Market Institute,  a “national trade association that conducts programs in public affairs, food safety, research,education and industry relations on behalf of its 1,500 member companies – food retailers and wholesalers – in the United States and around the world,” is opposed to USPS selling gifts cards at retail windows.

Here is an excerpt of  comments submitted to PRC by Food Market Institute :

FMI believes that the United States Postal Service should not compete in commercial markets unrelated to its core postal functions. FMI believes that this government-sponsored competition is unnecessary and exceeds the Postal Service’s authority pursuant to the PAEA.

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.2

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.3 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.

Pitney Bowes Inc and American Bankers (in part) are also oppose to granting USPS to sell gift cards at  post offices. Hallmark cards  and American Express with current partnerships agreements with USPS, are in favor of allowing the sell of gift cards.

Re: Market Test of Experimental Product: Gift Cards (Docket No. MT2011-2)

6 thoughts on “Food Market Institute Urges PRC To Cancel USPS Request To Market Test Gift Cards

  1. When the post office operated on a break even model it could spend no more than it earned. A balanced viewpoint aimed at core operations yielded a budget that was balanced. It’s mission statement was clear,which was to deliver the mail as expeditiously as possible and as cost effectively as possible! It wandered away from a break even model and incurred massive debt. There was nothing that forced the service do this, nor did anyone outside of the U.S.P.S. bear responsibility for making them do this.They did it to themselves by spending more money than they had.Now to make-up for their shortcomings employees have to suffer from reduced hours and future retirees face reduced benefits and still more will be taken from us! Management should share the burden of poor decisions made and work with labor to solve the service’s problems rather than make the employees the convenient scapegoat for their bad decisions!

  2. fmi is 100% correct in saying we the po should stay to its core mission as it relates to postal services and products. instead of trying to reinvent the fucking wheel why dont the bean counters figure out how to offer more service instead of putting people on standby to justify closing offices… what a joke…

  3. Thanks for the correction on my spelling. When you consider that the postal service,according to a study by the Congressional Research Service in 2010, had 803,000 employees in 2003 and had by 2010 reduced that number to 575000(a reduction of 28%) and yet has a projected budget deficit of 6.5 billion this year is a primary example of their profligate spending philosophy! A 28% reduction in payroll should translate into some sort of quantifiable revenue to the bottom line on their balance sheet, but it has not. Instead they continue to LOSE MONEY! You never hear from “Donahoe and Crew” that they are going to limit executive compensation or freeze purchases of new equipment and plant. If you continue to lose money each year at some point you freeze purchases and try to balance the imbalance not constantly shift blame. Flip Wilson used to say “the Devil made me do it!”or my favorite “a lie is just as good as the truth,if it works!”That been management’s philosophy for a very long time!

  4. O’rourke, first of all it’s “losing” money, not “loosing”. And the only reason it is a “failed business model” is because they went away from it being a break even governmnet service. Dope.

  5. Soo let me get this straight. I can buy stamps at a food chain register. This is a convienence for the customer at the expense of the window clerk who sells stamps as part of his retail job but a Post Office can’t sell a gift card to a local merchant store???

  6. In countries like Japan and Germany postal services are allowed to offer postal patrons savings accounts at post offices with interest rates that compete with those at banks.These services are trusted for their history of security and solvency in dealing with the public.This is just another attempt by the U.S.P.S. to obtain money to finance their failed business model from the public by offering a “service of convenience” at post offices the same way they presently offer money-transfers to Mexico by wire.Let us face the facts. The U.S.P.S. needs to stop loosing monies from it’s operations before asking customers to trust them with their hard earned cash! What’s next ? A dozen eggs,a loaf of bread and a six pack of beer along with a book of stamps the next time you visit the post office? Hmmm… maybe!!

Comments are closed.