This is the third in a series of U.S. Postal Service Office of Inspector General (OIG) reports addressing the 21st Century Post Office (Project Number 11YG039DA000). Our objective was to assess opportunities for the U.S. Postal Service to provide non-postal products and services at retail facilities. Non-postal products and services are those not directly related to the delivery of letters, printed matter, or mailable packages. This self-initiated review addresses strategic risk associated with the 21st Century Post Office. See Appendix A for additional information about this audit.

Because of declining mail volume2 and revenue, the Postal Service has been operating at a deficit. To address budget issues and to increase profit, the Postal Service proposed, in its 5-Year Business Plan, to eliminate Saturday delivery, recalculate retirement prefunding obligations, and downsize the workforce. Most of the Postal Service’s efforts to eliminate budget deficits focus on cost-cutting initiatives. Adding non-postal products and services to those currently offered could increase revenue and enhance the Postal Service brand.Conclusion
The Postal Service could increase the value of Post Office retail facilities and address community needs by evaluating and offering non-postal products and services. The Postal Accountability and Enhancement Act (PAEA) of 2006 prohibits the Postal Service from offering new non-postal products or services. Under PAEA, the Postal Service can only provide the non-postal services it offered as of January 1, 2006. However, pending legislation could provide additional opportunities. The Postal Service should consider offering non-postal products and services suggested by stakeholders and those offered by foreign postal systems to generate revenue. Before implementing non-postal products and services, the Postal Service needs to ensure a business case exists, address barriers to offering non-postal products and services, and ensure that they are strategically placed at retail locations with sufficient foot traffic to help ensure success.

The OIG has offered suggestions for products and services in prior audits and white papers. These reports suggested the Postal Service:

• Expand government services at retail sites on behalf of federal agencies to facilitate E-Gov initiatives in addition to passport services and selective service registration. Expanding government services would increase public access to these services and provide additional revenue to the Postal Service.

•  Assist the National Broadband Infrastructure initiative through partnerships with commercial Internet service providers (ISPs). Specifically, the Postal Service could provide facilities and land for expanding the broadband infrastructure. Such ventures could make Internet services available and more affordable for the underserved and increase revenue for the Postal Service.

• Provide electronic currency transactions to underserved markets in the form of prepaid cards. Most electronic payment tools require users to have a bank account or credit card. Otherwise, payment options for underbanked individuals, such as low-income families, new immigrants, the unemployed, and the non-creditworthy would generally include only cash and checks.

One Postmaster suggested that USPS charge a small fee for supplies and boxes.

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