Allegations That the Postal Service Is Entering Into Unfair Competition With Private Postage Stamp Vendors

GAO was asked to look into allegations made by the President of the National Association of Postage Stamp Vendors that the Postal Service was entering into unfair competition with private postage stamp vendors.

Much of the Service's existing equipment is over 10 years old and no longer satisfactory. During fiscal year 1982, a procurement is planned of: (1) booklet vending machines; (2) small currency changers for installation along with the booklet vending machines; and (3) small stamp vending machines to replace obsolete machines in postal facilities. The Service maintains that the thrust of its stamp vending machine program is to replace obsolete equipment and allow limited expansion in nonpostal, retail service locations to satisfy expressed customer needs. It believes the booklet vending equipment serves a different market and will not compete directly with the small, single-stamp machines maintained by private vendors. The National Association of Postage Stamp Vendors approached the Service with the idea of purchasing stamps at less than face value and then, through their network of private machines, selling them at the same price the public would pay at the post office. A contract was drawn up; however, the Service could not identify any economic benefit which would justify undertaking a national commercial face-value vending program. The Service also concluded that the potential level of improved service did not outweigh the additional postal costs and other attendent problems. However, the Service is currently administering a test of face-value vending through private stamp vending machines operated by a private vendor. The Service believes the major tangible benefit that could result from this test would be the reduction of post office window service hours.