USPS to market test gift cards

Recognizing the popularity of gift cards, the U.S. Postal Service reported it intends to conduct a gift card pilot at 2,000 initial branch locations. The pilot will first test the sale of open-loop, network-branded cards, which may be followed with a closed-loop gift card pilot, according to the USPS.

The Postal Service said the market test will run from May 2011 to May 2013 and mandates that the revenue from activation fees on the cards not exceed $10 million per year. Additionally, the cards will be available at service windows, not at self service kiosks or online.

To conduct the pilot, the Postal Service said it will partner with a gift card provider or providers. The cards will be cobranded, featuring Postal Service imagery, such as stamp art or the USPS corporate signature. The USPS plans to offer "fixed" cards at $25 and $50 denominations, as well as "variable" cards with a minimum of $26 and a maximum of $100.

The USPS said the cards will be available at postal locations that already sell greeting cards "in order to take advantage of the inherent cross-selling opportunity between gift cards and greeting cards." To capture holiday sales, the Postal Service expects to expand the pilot to up to 3,000 additional locations in October 2011.

The sale of gift cards is meant to support its customers' mailing needs and pointed out that it is often easier for customers to mail gift cards that can be redeemed for merchandise rather than merchandise itself, the USPS said.

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