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Post office to sell gift cards

But they won't be much of a deal. Charging $4.95 to send $25 may not lure many customers.

By Teresa Mears Jan 6, 2011 1:16PM

In an effort to drum up business, the U.S. Postal Service has decided to sell gift cards.


Stamp us underwhelmed.

The cards will be the type known as "open loop," issued by Visa, MasterCard, Discover and American Express, usable anywhere credit cards are accepted.


They sound great, don't they? What an easy gift.


But those easy gifts come with hefty fees. The post office plans to charge $4.95 for gift cards with a set rate of $25 and $50 and $5.95 for cards in variable amounts ranging from $26 to $100. There is no word yet on whether the cards will have an expiration date or carry any additional fees.


Those fees don't approach the level of fees charged by some prepaid debit cards such as the now defunct Kardashian card, but $4.95 for a $25 gift card is still a hefty fee. You can buy a $25 gift card for a department store for $25, with no fees.


Richard at Student Scrooge wrote an open letter to "Uncle Robert" about why he hates open-loop gift cards. He wrote:

For one thing, it pains me that anyone, especially a family member of mine, would buy these things, given the activation fee associated with it. Yeah, it is only a few dollars, but it seems silly that you paid $3 or $4 on a $25 gift card. I was looking at American Express gift cards the other day, and the most basic version has a $4 activation fee. Yikes. You really could have simply given me cash (which, last I checked, has no activation fee), or even a normal gift card to a major merchant. Really, this point isn't so much for me as it is for you. I hate to see you waste money.

"Advocate" at Gift Card Advocate has a post about problems using these types of cards at gas stations and restaurants.


The post office's gift cards will become available in May at the post offices that sell greeting cards.


We share MSN Money columnist Liz Pulliam Weston's distaste for gift cards, believing that they are indeed the new fruitcake, and we really don't like fruitcake.


We can see that these new cards may come in handy not as gifts but to send in emergencies or to bail out errant relatives rather than doing a wire transfer or using Western Union (which also sells gift cards).


The cards can be used anywhere credit cards are accepted, so they can be used to buy groceries or pay for utility bills, auto repair and medical bills in many cases.


The gift cards will be offered for two years on a trial bias, and the post office will consider whether to add single-merchant gift cards.


The question is whether gift cards will get anyone into the post office. Would you buy one?

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