USPS to trial postage-paid greeting cards
The United States Postal Service is proposing a new service to allow people to mail greeting cards without having to buy stamps separately. The USPS is proposing a trial that would see greeting card producers paying for postage, so that the cards can be pre-stamped ready to go straight in the mail once filled out by consumers.
Payment would be 50% upfront, with card companies paying a rate to USPS based on how many cards are sold, with remaining payment made once the cards have been mailed and scanned at sorting offices.
The USPS intends to start a two-year evaluation process in January, based on its First Class service but with a slightly higher premium rate.
Sources in the greeting cards industry said the trial was being conducted with card giant Hallmark, though the company was not responding to requests for comment today.
The US Postal Service believes the new pre-pay card service could be one option to counter the decline in First Class mail volumes, which have dropped 14% since 2002.
A wider adoption of pre-stamped greetings cards would also mean cost savings for the USPS selling stamps direct to the public, it believes.
American consumers purchase about seven billion greeting cards each year, according to the greeting card industry, generating $7.5 billion in retail sales.
But, as with the regular mail, the greeting card industry is now also facing competition from the use of electronic cards, with 500 million “e-cards” now being sent each year worldwide.
Seeking approval for the trial from the Postal Regulatory Commission, the USPS said the rise of electronic communications meant convenience and ease of use was a more significant factor in whether consumers would use the mail.
“Consumers often say that the extra step of providing postage is one of the primary obstacles to sending greeting cards and other correspondence,” explained the Postal Service pricing and product development team. “Under this market test, however, there is no need for the correspondent to pay postage. Instead, the greeting card is nearly ready for mailing at the time it is purchased.”
For greetings card producers, the USPS believes the service will allow them to send more cards to busy people, because of the ease of use. Producers could also see whether consumers would pay more for cards are pre-stamped.
Card producer Hallmark, which has by far the largest market share in the US greeting card industry, selling its products in 41,000 US retail stores, worked with the USPS on a trial using post cards earlier this year.
That program, launched in April, saw Hallmark selling prepaid post cards in packets of 16 for $9.99 a packet – or 62 cents for each post card.
Card producers taking part in the greeting card program would place barcodes and special markings on their envelopes to allow scanning by the Postal Service Intelligent Mail system, and so consumers are clear that the cards do not require postage.
Cards would have conform to USPS-approved dimensions, with the Postal Service proposing an overall price of 48 cents for items up to one ounce in weight, with a second ounce rate added for items between one and two ounces in weight.
Based on the results of the first year, in the second year of the trial, the USPS intends to test out other pricing levels, it said.
The PRC is seeking comments on the USPS proposals by December 8, 2010.
