Gift cards are now on sale in more than 1,800 post offices across the United States, and is set to roll out to 3,000 more locations over the next three months.
The US Postal Service is running a market trial with credit card company American Express to offer the cards, available in $25 and $50 amounts as well as a variable $25 to $100 option.
The aim is to branch out into additional retail products to bring in extra revenues.
USPS said the gift cards were “open loop” – in that any retailer would accept them, rather than specific retail cards. The cards are being sold alongside the Postal Service’s existing line-up of greeting cards to take advantage of cross-selling opportunities.
As sales agent for the cards, USPS receives a negotiated portion of the purchase fee for the cards, which starts at $3.95 for the $25 card, rising to $5.95 for the variable-denomination card.
Customer support for the cards is provided by American Express.
“We are always looking for new ways to improve the customer experience and generate new revenue,” said Kelly Sigmon, USPS vice president of Channel Access. “Selling gift cards, greeting cards and stamps all at one location is a natural fit for our business model and a natural fit for our customers.”
USPS is planning on running its market trial for up to two years to test out the sale of gift cards.
On the trial, as approved by regulators, USPS is free to try out different price structures and can expand the test to include vendors other than American Express, which is just the first company to participate in the program.
The market for gift cards in the US is said to be worth around $86bn a year, and for American Express represents a $1bn-a-year business. Although sales declined during the recession, analysis by First Data issued in March suggested their popularity is growing again.
According to the National Retail Federation, gift cards have been the most requested gift among American adults for the last four years.
As well as gifts for adults, the open loop cards are seen as effective alternatives to credit cards for parents to give teenagers.
Alpesh Chokshi, president of Global Payment Options at American Express, said: “Gift cards remain one of the most popular gifting choices for consumers, and as a major issuer of universal gift cards, it seemed a natural step to make American Express Gift Cards available in places where consumers can conveniently send and receive mail.”
Source: Post&Parcel/USPS
Tags: American Express, Cards, Retail, USA, USPS
