Breast Cancer Research Stamp

The breast cancer research stamp was the first stamp ever issued by the Postal Service to raise money for a nonpostal purpose--in this case medical research on breast cancer. The stamp is a "blockbuster" commemorative stamp that costs 40 cents, or seven cents above the cost of a regular first-class postage stamp. The Postal Service is authorized to deduct from the seven-cent surcharge its costs to print, sell, and distribute the stamp. GAO found that it is unclear how much it cost to develop and sell the stamp because the Postal Service did not track these expenses. Postal officials said that these costs were inconsequential or immaterial and it would have been too expensive to track them. In March, the Postal Service reported that the bulk of its costs to develop and sell the stamp through the end of 1999 was $5.9 million. About $5.4 million of these costs were recovered through the 33-cent first-class portion of the stamp, and the remaining $482,000 had been recouped from the surcharge revenues. GAO was concerned that the Postal Service had not formalized its criteria for determining what costs would be recouped from the surcharge revenue and was not consistently applying its informal criteria, which changed over time. In response to GAO's recommendation, the Postal Service indicated that it would formalize and consistently apply its cost recovery criteria. The Postal Service plans to recoup costs from the surcharge revenue that were over and above the costs normally incurred with a "blockbuster" commemorative stamp issue or a new postal product. The U.S. Mint's experiences offer lessons that may be applicable to semipostals, because there are many similarities between the two. In the mid-1990s, GAO reviewed the commemorative coin program and found that some coins were unpopular and did not sell well. GAO also found that as the number of commemorative coins proliferated, the market became saturated and sales fell. As sales fell, the U.S. Mint was unable to cover its costs on some commemorative coin programs. This testimony summarizes the April 2000 report, GAO/GGD-00-80.

GAO noted that: (1) the Stamp Out Breast Cancer Act directed the U.S. Postal Service to create the BCRS, the first ever semipostal in the nation's history; (2) the BCRS sells for 40 cents--with 33 cents covering the First-Class postage rate; (3) after recouping its reasonable costs, the Service is to remit the net surcharge revenue to the National Institutes of Health and the Department of Defense for breast cancer research; (4) the public and a majority of key stakeholders GAO spoke with believe it is appropriate to use semipostals issued by the Service to raise funds for special purposes--such as breast cancer research; (5) the Service, although supportive of the BCRS, is generally opposed to semipostals because the Service believes them to be outside its mission; (6) in GAO's opinion, the BCRS has been an effective fund-raiser; (7) it has raised millions and, at the same time, has been convenient and voluntary; (8) by the time BCRS sales conclude on July 28, 2000, the Service estimates it will have raised about $14 million for breast cancer research; (9) the average monthly surcharge revenue generated by the BCRS compared favorably with 7 of the 12 foreign semipostals included in GAO's survey, although it did not raise as much money as most of the foreign semipostals on a per capita basis; (10) it is not clear how much it cost the Service to develop and sell the BCRS; (11) the Service reported that the bulk of its costs, through the end of 1999, were about $5.9 million; (12) according to the Service, about $5.4 million of those costs were recovered through the 33-cent First-Class portion of the BCRS, and the remaining $482,000 had been recouped from surcharge revenue; (13) throughout the review, GAO was concerned that the Service had not formalized its criteria for determining what costs would be recouped from the BCRS' surcharge revenue and was not consistently applying its informal criteria, which changed over time; (14) GAO recommended that the Service formalize and consistently apply its cost recovery criteria, and in response to that recommendation, the Postmaster General said the Service would do so shortly; and (15) according to the Postmaster General, the Service planned to recoup costs from the surcharge revenue that were over and above the costs normally incurred with a blockbuster commemorative stamp issue or new postal product.