January 9, 2011 in Business

Post office to start selling gift cards in May

Randolph E. Schmid Associated Press
 

WASHINGTON – The post office wants to get into the gift card business.

Pre-paid cards have become one of the most popular gift items and postal officials want to do more than just deliver them to the lucky recipients.

So they plan a two-year test beginning in May, with about 2,000 post offices selling cards issued by companies such as American Express, Discover, MasterCard or Visa, according to papers filed Wednesday with the independent Postal Regulatory Commission.

The first test will be at post offices that also sell greeting cards. If that works out, the experiment will expand to another 3,000 offices or so in October in hopes of getting in on holiday card sales.

The National Retail Federation estimates that more than three-quarters of consumers purchase at least one gift card during the holiday season.

The cards the post office plans to test, known as “open loop” cards, can be used at any merchant that accepts cards from the issuing organization.

Current plans call for sales of fixed amount cards of $25 and $50 value, plus variable-value cards where the buyer can designate the amount at between $26 and $100. In addition there will be a fee of $4.95 for a fixed amount card or $5.95 for a variable one. The cards will have to be purchased from a clerk.

The post office said it may also decide to test so-called “closed loop” cards that are specific to one merchant, but plans for that have not been completed.

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