American Express Co. will sell gift cards in more than 1,800 post offices starting in June under a pilot program with the U.S. Postal Service.
The Amex-branded cards will be sold in fixed amounts of $25 and $50 as well as variable amounts of $25 to $100. They will cost $3.95 to $5.95 to activate but will have no other fees, the New York card issuer said in a press release Monday.
The USPS said in January that it would test the sale of gift cards in its branches to generate additional revenue, with plans to retain a percentage of the card sales. It could expand the cards' availability to an additional 3,000 locations later, USPS spokeswoman Patricia Licata said Tuesday. Licata said the percentage of sales the postal service would retain is proprietary.
American Express did not say how much revenue it shares with the USPS.
"We're going to see how it works and what the consumer response is," Licata said.
"We're selling these gift cards in the same places that we're selling greeting cards," she continued. "Greeting cards are very popular with consumers … so it's a natural, good fit, and it's also one way for us to increase revenue."
The program continues an effort at Amex to expand beyond the traditional credit and charge products it has historically focused on.
In February, American Express began testing sales of cobranded prepaid cards at Target Corp. stores. In April it announced a digital wallet service called Serve, which can be funded with non-Amex payment cards.
Alpesh Chokshi, Amex's president of global payment options, said in Monday's press release, "Expanding our distribution network to new and innovative locations like post offices is key to accelerating the company's growth in new payments and digital platforms."
American Express is not an exclusive participant of the pilot program; the program could be opened to other payment networks, card issuers or processors, Licata said.
