U.S. Postal Service: Expanding Nonpostal Products and Services at Retail Facilities Could Result in Benefits, but May Have Limited Viability

USPS manages over 31,000 retail facilities, which help it provide postal services throughout the country. However, USPS faces financial challenges. In general, USPS is prohibited by statute from providing nonpostal products and services (i.e., services not directly related to mail delivery) unless approved by the Postal Regulatory Commission. But given the ubiquity of the retail network, some stakeholders have suggested that offering additional nonpostal products and services could help USPS generate revenue and provide benefits for consumers and communities.

GAO was asked to review opportunities to enhance the value of USPS's retail facilities. This report examines: (1) the costs, revenues, and other benefits associated with USPS's retail facilities; (2) USPS's nonpostal efforts since 2008 at retail facilities and the outcomes; and (3) considerations of new nonpostal efforts at retail facilities. GAO analyzed USPS retail facility costs and revenue data from fiscal years 2017 and 2018 (the only years available); reviewed relevant documents and reports from USPS and others; conducted a non-generalizable survey of USPS postmasters who managed rural, suburban, and urban retail facilities; and interviewed USPS officials, and stakeholders, including postal employee unions, industry and consumer groups, and federal agencies that partner with USPS to obtain views on current and potential nonpostal efforts.

GAO is making no recommendations. USPS, in its comments, reiterated that it faces various constraints to new offerings at retail facilities.

In 2018, U.S. Postal Service's (USPS) retail facilities, such as post offices, generated about $10.5 billion in revenue and cost approximately $5 billion to operate, making them profitable overall. While such facilities accounted for about 15 percent of USPS's total fiscal year 2018 revenues, and about 7 percent of its total costs, stakeholders identified other benefits that retail facilities provide for communities—particularly in rural areas—such as local access to government information and services.

Since 2008, USPS has offered a variety of nonpostal products and services at its retail facilities that have generated some revenue and other benefits. USPS data show that the nonpostal products and services for which USPS captures revenue data, such as money orders, generated about $431 million in total revenue in fiscal year 2018 and were profitable overall. Stakeholders said many of these nonpostal products and services also provided other benefits, such as enhanced convenience for customers, and postmasters GAO surveyed said some offerings, such as passport services, were highly valued in their communities.

Offering additional nonpostal products and services at USPS retail facilities could provide consumer, government, or community benefits, but viability may be limited. Stakeholders said new offerings, such as expanded financial products or government services could, for example, enhance consumers' access and government efficiencies. In particular, some noted that USPS could provide a viable banking alternative for those lacking banking services. However, USPS officials, postmasters GAO surveyed, and stakeholders GAO interviewed said that additional offerings may generate minimal revenue and that USPS may face factors limiting the viability of these offerings. For example, groups representing states' licensing agencies said offering state hunting and fishing licenses could be problematic given different state requirements. Also, stakeholders said USPS may not have the expertise nor the required capital to enter the market of some of these new offerings. Given such concerns, USPS and policy makers need to carefully weigh costs, benefits, and limitations of any new offerings.

The United States Postal Service’s (USPS) network of over 31,000 retail  facilities, such as post offices, reaches into almost every community in the  country and includes about as many outlets as McDonald’s, Starbucks,  and Walmart combined. This network is central to USPS’s fulfilling its  mission to provide prompt, reliable, and efficient postal services.  However, this mission continues to be at risk because USPS’s revenues  do not cover its expenses. As demand for traditional postal services has  declined, USPS has struggled to operate as a self-financing entity and  has experienced significant losses—$78 billion from fiscal years 2007  through 2019. As a result, USPS’s financial viability has been on our list  of high-risk areas since 2009.

Given the ubiquity of USPS’s retail facilities and the costs to maintain  them, postal stakeholders, such as the Task Force on the United States  Postal System, have suggested that USPS could be authorized to offer  additional products and services through its retail facilities in order to  generate revenue and provide benefits to consumers, other government  entities, and communities. The Postal Accountability and Enhancement Act (PAEA) generally prohibits USPS from providing new types of  nonpostal products and services. Even if USPS were authorized to offer  these services, there is little consensus as to what sorts of opportunities  may be worth pursuing.

You asked us to review the value of USPS’s retail facility network and the  opportunities to increase the value of this network through nonpostal  efforts (i.e., efforts that are not directly related to mail delivery). This  report examines:  the costs, revenues, and non-revenue benefits associated with  USPS’s retail facilities;  the nonpostal efforts USPS has conducted since 2008 to increase  revenues and non-revenue benefits from its retail facilities, and the  costs, revenues, non-revenue benefits, and challenges associated  with such efforts; and  the key considerations for additional nonpostal efforts USPS could  pursue to increase revenues and non-revenue benefits from its retail  facilities.

For this report, we focused on USPS-managed retail facilities including  USPS-operated post offices, postal stations, branches, and carrier  annexes, as defined in USPS’s Annual Reports to Congress.

To describe the costs, revenues, and non-revenue benefits associated  with USPS’s retail facilities, we reviewed USPS’s financial analysis of its  retail network for fiscal years 2017 and 2018, the only years USPS  conducted such analysis. Based on USPS documents we reviewed and  interviews with USPS officials, we determined these analyses were  sufficiently reliable to describe costs and revenues of retail facilities. We  used these analyses to identify the sources and amounts of retail facility  costs (e.g., personnel) and revenues (e.g., stamp sales) for most retail  facilities and facilities where revenues may not cover costs. We then  compared these amounts with USPS’s total costs and revenues to  determine how much retail facilities contribute to them. For this  comparison, we made certain adjustments to USPS’s total operating  expenses as stated in its Reports on Form 10-K by excluding certain  components of workers’ compensation and retirement benefits expenses  that did not relate to active employees’ costs, because those costs are  related to service performed in the past and thus do not reflect the impact  of operational changes.

To identify non-revenue benefits of USPS’s retail facility network, we  reviewed publications and studies, such as those conducted by USPS,  USPS’s Office of Inspector General (OIG), and USPS’s oversight body,  the Postal Regulatory Commission (PRC). Additionally, we interviewed  representatives from two consumer groups—Consumer Action and the  National Consumers League—and two organizations representing USPS  workers at retail facilities—American Postal Workers Union (APWU) and  United Postmasters and Managers of America (UPMA).

We identified nonpostal products and services offered at USPS’s retail  facilities since 2008 through our review of publications, such as PRC’s  report on USPS’s product offerings, USPS OIG studies, and interviews  with USPS officials. We selected 2008 to begin our analysis because that  was when new restrictions on nonpostal services took effect. To identify  the revenues generated by the nonpostal products and services we  identified, we reviewed data from USPS’s retail network financial  analyses for fiscal years 2017 and 2018, the only years USPS conducted  such analyses. To identify the costs incurred by nonpostal products and  services, for which information was available, we reviewed USPS’s fiscal  year 2018 Annual Compliance Report, PRC’s fiscal year 2018 Annual  Compliance Determination Report, and non-public data provided to us by  USPS. To obtain stakeholder views on the non-revenue benefits of  USPS’s nonpostal efforts, we interviewed officials from six federal  government entities that had partnerships with USPS as well as  representatives from APWU, UPMA, and two consumer groups.

As one of the nonpostal efforts USPS can currently offer includes leasing  space, we reviewed USPS’s data on the amount of vacant rentable space  for fiscal years 2017 and 2018 (the only available years), on tenants at  its facilities as of January 2020, and on the amount of revenue USPS  collected from leased space for fiscal year 2018. Based on interviews with  USPS officials and USPS documents we reviewed, we determined these  data were sufficiently reliable to describe the results of leasing excess  space at retail facilities. We also interviewed officials from the General  Services Administration (GSA), which leases space from USPS on behalf  of other federal government entities, and the Association of United States  Postal Lessors, which represents entities that lease space to USPS.

To assess the key considerations for offering additional nonpostal efforts  at USPS retail facilities, we reviewed prior GAO reports and USPS OIG  studies; interviewed USPS officials and postal experts—such as postal  groups, selected based on prior work—to provide a range of views on  potential offerings; and attended a forum exploring community use and  adaptation of USPS’s delivery infrastructure, including retail facilities. To  obtain stakeholder views on the potential benefits and limitations of these  offerings, we interviewed representatives from the two consumer groups  previously mentioned and eight industry and state licensing groups, which  we selected because of their potential to be affected by USPS offering  additional nonpostal products and services. We also interviewed  officials from the six federal entities that had or currently have  partnerships with USPS and an additional six federal government entities  that could potentially benefit from additional or new partnerships. We  also interviewed two foreign postal operators—France’s La Poste and the  United Kingdom’s The Post Office, organizations that have had  experience with nonpostal services similar to those we reviewed—to gain  insight into their experiences; they were, selected based on prior work  and other studies. The views presented in our report are not  generalizable to those of all stakeholders.

Further, we surveyed USPS postmasters at selected retail facilities to  obtain additional perspectives on the benefits of USPS’s retail facilities,  nonpostal efforts offered at those facilities, challenges associated with  those efforts, and key considerations for offering additional nonpostal  services. From August to September 2019, we conducted a non- generalizable, web-based survey of 283 postmasters who managed retail  facilities located in urban, suburban, and rural areas. Approximately 53  percent of our sample—or 149 postmasters—completed the survey. For  a more detailed description of our methodology, see appendix I. The  survey questionnaire is provided in appendix II.

We conducted this performance audit from December 2018 to March  2020 in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.

USPS is required to provide postal services “to bind the nation together  through the personal, educational, literary, and business correspondence  of the people  prompt, reliable, and efficient services to  patrons in all areas and postal services to all communities.” To help  fulfill this mission, USPS has developed a network of facilities that  provides access to retail services and supports postal collection,  processing, transportation, and “last mile” delivery of mail—functions that  are generally co-located. The retail portion of these facilities includes  public areas where USPS provides customers with retail services. The  public areas can include full service counters where employees assist  customers, self-service areas, and post office boxes. The non-public  portions include features such as workrooms, where mail processing  occurs, and employee support areas, such as lunch tables and lockers.

Although USPS data show that customer visits and transactions have  declined over the past 5 years, the size of USPS’s retail network has  remained largely unchanged during that period (see fig. 1).

We have previously reported that USPS has made some efforts to reduce  the number of its retail facilities to align with the significant decline in mail  volume and address rising costs. Several factors, however, have limited  USPS’s ability to make further reductions. For example, in 2011 USPS  moved to evaluate the potential closure of almost 3,700 retail facilities but  abandoned their effort due to stakeholder concerns. Instead, USPS  explored options to adjust its retail service without closing offices. Legal  restrictions also limit USPS’s ability to close retail facilities. For example,  USPS cannot close a small post office solely for operating at a deficit. If  USPS wishes to close a retail facility, among other steps, it must take into  consideration not only the economic savings but also the effects on the  communities served, its employees, and the services provided, and it  must provide customers with at least 60 days’ notice before the proposed  closure date.

Federal statute defines the types of services that USPS may and may not  provide. As previously noted, PAEA placed limitations on the nonpostal  products and services USPS could provide. In particular, it allowed USPS  to continue to provide nonpostal products and services that were both  offered as of January 1, 2006, and were permitted by PRC to continue.  While PAEA generally prohibits USPS from initiating new nonpostal  services, USPS uses a separate statutory authority to provide such  services to federal executive agencies. If a nonpostal service is to be  provided to a federal executive agency, generally, USPS and the parties  must specify the terms and conditions of their collaboration, including the  activities to be performed by USPS and the terms of reimbursement, if  applicable. USPS is currently not authorized to provide nonpostal  services to state or local entities.

USPS may also lease excess space at retail facilities—including parking,  office space, and roof areas—to other entities at both the facilities that  USPS owns and those it leases from other entities. USPS officials said  some leases give them the right to sublease space at leased facilities, but  the officials did not know how many facilities where USPS had such  rights. USPS collaborates with the GSA, which is the nation’s largest  public real-estate organization, to lease space to other federal  government entities. USPS works with a real estate firm to lease space to  private or other entities, such as to state and local government entities.

USPS’s Retail Facilities Are Not a Major Contributor to Its Costs and Revenues but Provide Benefits Retail Facilities Account for a Relatively Small Percentage of Costs and Revenues and Are Profitable Overall

According to USPS’s analysis, retail facilities accounted for a relatively  small portion—about $5.17 billion, or 7.1 percent—of USPS’s modified  operating costs in fiscal year 2018. (See fig. 2.)

Personnel costs accounted for the majority of retail facility operating  costs ($4.87 billion), including nearly $4.4 billion in employee  compensation.

Non-personnel costs amounted to about $0.30 billion, which included  rent ($0.09 billion), utilities ($0.06 billion), and depreciation and  amortization ($0.15 billion).

In terms of revenue, according to USPS’s analysis, retail facilities  accounted for a relatively small portion—about 15 percent ($10.5  billion)—of USPS’s total revenue ($70.6 billion) in fiscal year 2018. As  shown in figure 3, postage meters and validation and walk-in stamp sales  generated most of that revenue.

In fiscal year 2018, the majority of retail facilities were profitable (see fig.  4), with some considerations. USPS’s analysis showed that the total  retail revenue generated at retail facilities was more than double retail  facility costs in fiscal year 2018. However, over a third of retail facilities  did not generate enough revenue to cover USPS’s retail costs. In  particular, over half of the rural facilities were unprofitable, while the  overwhelming majority of suburban and urban facilities were profitable.  Overall, we found that of the unprofitable facilities, 89 percent were  located in rural areas. Among the 10 most unprofitable facilities, though, 5  were in urban areas and 3 were in suburban areas. USPS officials told us  some of these unprofitable urban and suburban retail facilities were in  areas where rent, utilities, and maintenance were very costly, and the  revenue generated was not enough at those facilities to make them  profitable.

Finally, while the number of customer visits to retail facilities has declined  by 25 percent since fiscal year 2009, customers are still using them. In  fiscal year 2018, among the retail facilities for which USPS had data, the  average number of customer visits was 46,624 annually, or an average of  154 visits per day. The most unprofitable facilities averaged 31,731  customer visits in fiscal year 2018, or about 105 customer visits per day.

Stakeholders Cited Several Non-Revenue Benefits of Retail Facilities

According to studies we reviewed and USPS officials and two consumer  groups we interviewed, USPS’s retail facility network produces economic,  social, environmental, and civic benefits (see table 1).

Some postmasters who responded to our survey told us that their retail  facilities generated economic and social benefits. For example, 90  percent (134 of 149) of postmasters managed a retail facility within  walking distance of other businesses or community buildings. Of those,  about 31 percent (41 of 134) of postmasters indicated that the retail  facility increased patronage of nearby businesses and community  buildings to a great or very great extent. Almost half (71 of 149) of the  postmasters stated that their retail facility served as a place for residents  to interact in person to a great or very great extent.

The economic and social benefits may benefit rural communities more  than urban and suburban areas, according to our survey of postmasters,  as well as the reports we reviewed and stakeholder interviews. One  survey respondent stated: “Offices in rural communities are extremely  important to the area in which they serve. Postmasters are often town  leaders and hold various positions on councils, boards, and non-profit  organizations. The USPS is usually the only government office in the  community, and it is recognized by many as their only connection to the  outside world.” According to USPS OIG and representatives from the two  consumer groups we interviewed, retail facilities serve as a gathering  place and help build social identity and connectivity, especially in rural  areas. According to USPS, small business owners depend on access to  USPS retail facilities across the country and in rural areas since USPS  facilities are often the only retail shipping provider. In addition, according  to USPS, retail facilities play important roles in connecting rural  communities.

USPS’s Nonpostal Retail Activities Generate Some Revenue and Offer Other Benefits USPS’s Nonpostal Products and Services Account for a Small Percentage of Retail Revenue and Are Mostly Profitable

USPS has offered a variety of nonpostal products and services since  2008 (see table 2). As previously described, PAEA permitted USPS to  continue offering certain nonpostal products and services that were  approved by PRC, and did not alter USPS’s statutory authority to provide  nonpostal services to federal executive entities. The nonpostal products  and services we identified were either permitted to continue by PRC  pursuant to PAEA or are services USPS provided through partnerships  with other federal government entities, such as those made through  interagency agreements.

USPS chooses where to offer its nonpostal products and services based  on several factors, and as noted in table 2 above, USPS does not offer  each nonpostal product and service at all retail facilities. USPS officials  told us they determine where to offer nonpostal products and services  based on several factors, such as customer demand and analysis of the  potential to generate revenue. In some cases, USPS consults with other  entities to make these determinations. For example, USPS officials told  us that the company that supplies the greeting cards conducts market  research to determine locations where there is demand. For passport  services, USPS and U.S. Department of State officials determine  locations based on demand and whether retail facilities have adequate  staff to perform related functions, among other factors.

USPS collects a fee for some, but not all, of the identified nonpostal  products and services offered at retail facilities. According to data from  USPS’s revenue and cost analysis, nonpostal products and services  generated a small amount of the total revenue collected at retail  facilities—about $431 million in fiscal year 2018, which accounted for 4.1  percent of total retail facility revenue, and 0.6 percent of USPS’s total  revenue. As figure 5 shows, passport applications and photo services,  as well as money orders, accounted for the greatest percentage of  revenue.

Nonpostal products and services may also generate revenue from  additional transactions that are made by customers during their visits to  obtain these offerings. For example, in 2016, USPS OIG estimated that  USPS generated almost $6.6 million in fiscal year 2015 from individuals  purchasing money orders to pay for passport-related services. In  addition, USPS OIG reported that passport services increased foot traffic  at retail facilities. A representative from a postal employee union also told  us that nonpostal products and services offered at retail facilities can  drive increased foot traffic in post office lobbies.

USPS officials said that USPS incurs various costs for nonpostal products  and services related to (1) the time it takes mail clerks to perform  transactions; (2) equipment and materials, such as passport photo  equipment for passport photo services; and (3) any needed physical  changes to the facility. USPS is required to analyze whether revenues  cover costs for some of the identified nonpostal products and services,  but not all. USPS officials said they are not required to report on  whether revenues cover costs for services provided through federal  interagency agreements, such as passport application processing. In  addition, they told us they do not track the costs for offerings that are  considered to be “non-commercial, non-revenue generating services,”  such as community bulletin boards. USPS officials also said some of the  nonpostal products and services we identified do not incur any costs; for  example, greeting and gift card displays are provided at the vendor’s  expense.

While USPS does not track costs for all offerings and make all costs  publicly available, USPS reported that most of the nonpostal products  and services we identified (as shown in table 2), and for those that USPS  tracks costs, generated more revenue than costs in fiscal year 2018.  Specifically, USPS reported that money orders earned almost $12 million  and philatelic sales earned about $1.1 million in revenue above their  costs in fiscal year 2018. USPS reported the only nonpostal product or  service that did not cover its costs in 2018 was in-bound international  money transfers.

USPS Initiated Pilots to Provide Services for Other Federal Entities at Retail Facilities

Based on our discussions with USPS officials, we identified three pilots  USPS has conducted since 2008 to provide nonpostal services on behalf  of other federal government entities at retail facilities; two of these pilots  involved USPS mail clerks performing in-person identity proofing and  biometric capture and one of the pilots involved sharing retail facilities’  lobby space.

USPS and the U.S. Census Bureau (Census Bureau) conducted a  pilot to evaluate the feasibility of having USPS assist the Census  Bureau with nationwide hiring for the 2020 Census. For this pilot,  which lasted from March 2015 to July 2015, USPS mail clerks at 12  retail facilities used Census Bureau equipment to conduct in-person  identify proofing and other administrative processes to help hire  temporary Census Bureau employees.

USPS and the Federal Bureau of Investigation (FBI) began a pilot in  September 2018 in which USPS mail clerks began scanning and  sending the fingerprints of individuals participating in the FBI’s Identity  History Summary Checks—a program that enables individuals to  request their arrest and conviction records (see fig. 6).

USPS and the Census Bureau conducted a pilot from April 2018 to  July 2018 as part of the Census Bureau’s 2018 testing activities to  determine whether interactive kiosks could be used at retail facilities  to allow customers to fill out their Census questionnaire. USPS  installed kiosks at 30 retail facilities in Providence County, Rhode  Island, that offered Internet access limited to the Census Bureau’s  online questionnaire.

According to officials from the Census Bureau and FBI, the agencies  benefited from the three pilots, to varying degrees, and USPS generated  revenue from the two in-person proofing and biometric capture pilots.

USPS officials told us that they received $125,000 from the 2015 in- person proofing pilot with the Census Bureau, and Census Bureau  officials said this pilot provided their staff with convenient locations to  meet with prospective applicants. Regarding the 2018 kiosk pilot,  Census Bureau officials said this resulted in 111 completed  questionnaires. However, after the pilots ended, the agencies did not  enter into subsequent partnerships. Census Bureau officials told us  they did not wish to extend the in-person proofing pilot due to limited  funding, and they did not wish to extend the Census kiosk pilot  because the number of completed tests did not justify the cost and  effort.

For the FBI pilot, USPS had generated almost $425,000 in revenue,  as of December 2019, from the fees paid by participating customers  since September 2018, according to USPS documentation. FBI  officials told us this pilot has improved their customer experience and  enabled them to reduce their response time for providing information  to customers. In March 2019, USPS and the FBI expanded the pilot  from two to 28 retail facilities, and this pilot was still ongoing at the  time we published our report.

USPS officials told us they also created the Digital Business Services  Team in June 2019 in part to pursue additional revenue-generating  partnerships with federal executive agencies. The officials said a major  focus of the team was to expand USPS’s in-person identity proofing and  fingerprinting services, and they estimated—with certain assumptions  regarding acquiring partnerships—fingerprinting services could generate  about $87 million in annual revenue after a 5-year rollout. USPS is  currently discussing potential new partnerships for in-person proofing  pilots with federal government entities.

Stakeholders Reported Non-Revenue Benefits and Few Challenges Related to Current Nonpostal Products and Services Offered

USPS officials, federal government entities, and stakeholders we  interviewed and postmasters we surveyed told us that the identified  nonpostal products and services (as shown in table 2) currently offered at  retail facilities provided the following non-revenue benefits.

Enhanced consumer benefits. Access to certain nonpostal products  and services at retail facilities enhanced consumers’ convenience,  according to USPS officials, and representatives from consumer  groups and a postal employee union. For example, in September  2019, USPS analysis found that 32 percent of the FBI pilot customers  selected USPS’s fingerprinting services over others who offer similar  services due to USPS’s location and rated their satisfaction with  USPS’s service highly. A representative from the postal employee  union said that many customers are happy that they can purchase a  greeting card and gift card when visiting a retail facility. In addition, a  representative from one of the consumer groups we interviewed said  that some nonpostal products and services, such as international  money transfers and money orders, may be otherwise unavailable to  certain populations, such as those who do not have access to a bank.  This representative also told us that some low-income consumers  only have internet access through their phone, which makes it difficult  to fill out forms online; these consumers therefore could benefit from  having certain forms, such as voter registration and selective service,  available at a retail facility.

Enhanced government benefits. Officials from five of the six federal  government entities that had partnerships with USPS said their  partnerships supported their ability to fulfill their missions, such as by  efficiently using resources and increasing customer convenience. For  example, officials from all six of these federal government entities said  USPS’s extensive network of retail facilities helped them reach  customers or users. Also, officials from three of these federal entities  told us that USPS’s services cut the processing time for certain  applications or services.

Enhanced community benefits. Representatives from the two  consumer groups told us that community services offered at retail  facilities—such as food drives, school tours, and community bulletin  boards—may help sustain communities and increase social  connectedness. Postmasters we surveyed also reported ways their  communities benefited from nonpostal services provided at their retail  facilities. For example, one postmaster we surveyed reported that his  or her retail facility collected eyeglasses for a local community  organization. Another postmaster we surveyed reported that during  the holiday season, his or her retail facility offers decorative rubber  stamps, which have become a community tradition.

According to the postmasters we surveyed, some of the nonpostal  products provided significant nonrevenue value, although the degree to  which these provided value depended on whether the retail facility was  located in a rural, suburban, or urban area. We asked postmasters to  identify whether certain nonpostal products and services were offered at  the selected facility, and if so, how much value the product or service  provided to the community.

Overall, passport services were the most highly valued nonpostal  product or service. About 95 percent (36 of 38) of postmasters at retail  facilities that offered passport services said passports provided great  or very great value to their communities.

Money orders were the next most highly valued nonpostal product or  service. These were offered at more of the retail facilities selected for  our survey than passport services. For the retail facilities that offered  money orders, about 78 percent (115 of 147) of postmasters said this  product provided great or very great value to their communities.

Burial flags were the third highly valued nonpostal product or service,  for some types of locations. About 66 percent (21 of 32) of  postmasters managing rural retail facilities and about 70 percent (35  of 50) of postmasters managing suburban retail facilities said burial  flags provided great or very great value compared to about 43 percent  (9 of 21) of postmasters overseeing urban retail facilities.

Among retail facilities that offered international money transfers  (SureMoney), selective service forms, philatelic products, and gift  cards, around one-third or more of postmasters reported these as  providing some value or little to no value in their communities.

Representatives of one postal employee union, postmasters we  surveyed, and officials from the six federal government entities that had  partnered with USPS reported minimal challenges related to providing the  identified nonpostal products and services at retail facilities. For example,  the representative from the postal employee union told us that the only  challenge for postal workers was when locations did not have adequate  staff to handle passport services. Very few of the postmasters selected  for our survey identified challenges related to offering the thirteen  nonpostal products and services we asked about. Officials from only two  of the six federal government entities mentioned challenges, and none of  them were significant in nature. For example, officials from the  Department of Veterans Affairs mentioned that the only challenge was  ensuring adequate supplies of burial flags at retail facilities.

Although the stakeholders we interviewed and postmasters we surveyed  cited few challenges associated with nonpostal products and services,  USPS OIG has reported that USPS could take actions to further increase  the use of some of these offerings. In 2015, USPS OIG suggested that  USPS conduct better-targeted marketing for its money orders or consider  pricing changes to the fees charged for money transfers. In 2016, USPS  OIG identified several areas in which USPS could improve customer  experience for passport services, such as improving the clarity of  information provided to customers and improving the accuracy of  offerings on USPS’s website. USPS generally agreed with the findings  but reported it had already implemented or had begun to implement  changes to improve customer service issues raised in report.

Some Revenue Results from Leasing Excess Space, but Opportunities Are Limited

USPS currently leases some of its owned excess space—including space  at its retail facilities, such as parking, office space, and roof areas—to  other entities, generating additional revenue and other benefits.  According to USPS as of January 2020, USPS was leasing space in 232  facilities (about 3 percent) of its 8,362 owned facilities to federal and local  government and private entities. USPS generated about $29 million  from its leases in fiscal year 2018. USPS officials told us they are  currently researching the feasibility and benefits of leasing space to  entities to place automated teller machines in retail facility lobbies and  parking lots as a way to generate revenue. Stakeholders we interviewed  and USPS OIG have said leasing space may also result in non-revenue  benefits for USPS and consumers. For example, a postmaster who  managed a retail facility said that leasing office space to two local  government entities likely increased foot traffic in the facility and  increased community access to government services provided by the  tenants.

USPS, however, has little additional vacant rentable space. As of  September 2018, USPS reported that it had vacant rentable space  available in 307 (about 4 percent) of its 8,362 owned facilities. In 2018,  USPS OIG reported that USPS faced unique challenges in leasing such  excess space, including poor condition and limited size, lack of handicap  accessibility, limited parking, lack of accessibility without interfering with  USPS operations, and lack of a separate restroom. According to GSA  officials, some available space is small—USPS reported that about 9  percent of available space is less than 500 square feet—and may require  significant investment from GSA or the potential tenant agency to be  suitable for occupancy (see fig. 7). GSA officials said it has been difficult  to find federal government entities willing to lease retail facility space from  USPS. For example, officials from the Census Bureau told us that they  leased some space at two USPS facilities to support 2010 Census  activities, such as to support hiring personnel and a location for training.  However, they were not able to lease as much as they would have liked  because there was very little available space that met Census  requirements, and the space that was available would have required  costly modifications prior to use. In addition, USPS officials told us there  can be costs related to leasing space, such as USPS’s making needed  renovations.

USPS does not track the extent to which space at retail facilities, such as  lobbies and parking lots, is shared with other entities without any  payment. However, USPS officials told us that while community groups  have asked to use retail facility space and parking lots, these requests do  not happen frequently. Only two of the 149 postmasters we surveyed  (about 1 percent) indicated that the selected retail facility they oversaw  shared space with other entities at no charge.

Additional Nonpostal Efforts at Retail Facilities Could Offer Some Benefits but May Generate Little Revenue and Have Other Limitations Additional Nonpostal Products and Services Could Provide Non- Revenue Benefits

Studies we reviewed and postal experts and stakeholders we interviewed  have suggested that USPS may be well positioned to offer additional  nonpostal products and services due to its trusted brand, vast retail  facility network, and experience with other nonpostal efforts. Examples of  such additional offerings are set out in the following table (see table 3).

USPS officials, stakeholders, and studies we reviewed indicated these  identified additional nonpostal activities—if USPS were authorized to offer  them—could offer a variety of non-revenue benefits to consumers,  government entities, and communities. Examples of some of the  suggested types of non-revenue benefits are shown in table 4.

However, most of these additional nonpostal products and services would  not increase revenues or greatly benefit their communities, according to  the postmasters we surveyed. Specifically, a majority of postmasters did  not think any of the nine additional nonpostal products and services we  asked about would increase revenues or benefit the community to a great  or very great extent. However, postmasters indicated that some potential  services were more promising than others. In particular, about 40 percent  (59 of 149) of postmasters indicated that notary services would increase  revenues or benefit the community to a great or very great extent, while  36 percent (53 of 149) of postmasters indicated that driver’s license and  other state license services would increase revenues or benefit the  community to a great or very great extent. Few postmasters in our survey  indicated that a benefit of offering any of the nine additional nonpostal  products and services would be that they would be providing a product or  service that is not offered elsewhere in the community.

Most Additional Nonpostal Products and Services Would Likely Have Low Net Revenue Potential

USPS officials, officials from other federal government entities, and  stakeholders told us that most of the nonpostal products and services  identified above would likely have limited revenue potential. They, as well  as studies we reviewed, indicated a variety of reasons why USPS might  not generate significant net revenue from the additional nonpostal  products and services we identified.

Low potential for a significant market share. USPS officials and  stakeholders told us USPS could face challenges gaining enough of a  market share for some of the additional nonpostal products and  services to make a profit. For example, USPS officials said if they  offered notary services, they would likely gain only a small share of  the market because other retailers, such as banks, already offer these  services for free. Also, representatives from four financial associations  said they believed consumer demand for financial products and  services was already being met or would best be met by existing  financial entities, and that many consumers may not likely obtain  these services from USPS. In addition, representatives from two  financial associations said serving underbanked populations would  likely result in limited profits because these tend to be riskier  customers who may default more often, and the services they use  result in slim profits for current providers.

High operational costs. USPS OIG has reported that USPS incurs  low customer foot traffic and high labor costs compared to other retail  facilities. According to USPS officials, these factors make it difficult  to compete on a cost-per-transaction basis for nonpostal products and  services and make leasing space in owned facilities and subleasing  space at USPS’s leased retail facilities attractive, because leasing and  subleasing would not incur personnel costs.

Additionally, USPS officials told us that offering some of the additional  nonpostal products and services could require significant investment  costs—such as major technology investments and additional training  for mail clerks—further reducing USPS’s ability to make a profit. For  example, USPS OIG estimated in 2015 that USPS could generate  $1.1 billion annually after a 5-year ramp up from expanding the  financial products it already offered. USPS officials, however, said  that expanding such offerings at retail facilities would likely require  extensive investments in physical and information technology security  and incur ongoing costs. Accounting for these sorts of costs would  mean USPS would likely generate about $100 million to $200 million  in net revenue as opposed to $1.1 billion. In addition, representatives  from the American Association of Motor Vehicle Administrators and  the Maryland Motor Vehicle Association told us that if USPS were to  offer state driver’s license services, it would need to invest in  equipment and training. Specifically, USPS would need to purchase  secure computer systems that require multiple electronic interfaces  and train mail clerks to handle complex document verification for  issuing state driver’s licenses in order to meet requirements set by the  REAL ID Act of 2005, among other concerns.

Limitations on amounts charged. USPS officials and other  stakeholders indicated that the fees charged for some of the  additional nonpostal products and services would be too low to result  in high revenues. For example, USPS officials found there would be  little potential revenue from providing photocopying services or  placing vending machines in retail facilities. Also, NPS officials and  representatives from AFWA told us that current providers of National  Parks and Federal Recreational Lands Passes and state hunting and  fishing licenses generally do not generate much revenue due to the  fee structure. In addition, USPS may or may not charge other entities  a fee for sharing information at retail facilities. For example, USPS’s  partnerships to share information on other government entities’ behalf,  such as providing selective service registration forms and displaying  information for DOJ’s National Crime Victims’ Rights week, do not  generate revenue. Last, any effort to expand community services  would not be intended to generate revenue.

We have previously reported that foreign posts began offering nonpostal  products and services to increase revenues, such as offering banking or  financial services and making additional government services available in  their retail facilities, but these efforts have had mixed results. Some  foreign postal operators have expanded their financial offerings at retail  facilities and have generated significant revenue from these efforts. For  example:

The United Kingdom’s postal retail operator—The Post Office—has  an agreement with virtually all the retail banks in the United Kingdom  that enables customers to use retail facilities to access their banking  services. According to The Post Office, the financial services it offers  generated €205 million in 2017 and €215 million in 2018. (Cost data  were not available.) Officials from The Post Office told us this  agreement has not only generated income, but also increased foot  traffic to their retail locations.

France’s postal operator, La Poste, established a bank in 2005 to  provide a full range of banking products and services through its retail  facilities. According to La Poste, its banking services generated net  revenues of €5.5 billion in 2018, which was down from €5.6 billion in  net revenue in 2017.

However, USPS officials and representatives from banking associations  cautioned that the financial and regulatory infrastructures of other  countries are too different from those of the United States to suggest that  USPS could achieve similar results. In addition, foreign postal operators  are starting to sell their banks or have a franchise model with relatively  lower-paid staff.

Views Varied on Demand and Feasibility; Other Limitations Affect Viability of Nonpostal Services and Products

There were mixed views on whether there would be demand for any or all  of these nonpostal products and services. On the one hand, USPS  officials, officials from other federal government entities, postmasters we  surveyed, and stakeholders generally said that there was little demand for  many of the additional nonpostal products and services USPS could offer  at its facilities. In particular, postmasters did not indicate very high  demand for any of the nine additional nonpostal products or services we  asked about in our survey. The highest response for products and  services in demand was only about 36 percent (53 of 149) of postmasters  who said there was demand for notary services, and the next highest was  about 33 percent (49 of 149) of postmasters who said there was demand  for printing and photocopying services. Also, officials from the 12 federal  government entities noted that while they were open to new partnerships  in which mail clerks perform transactions on their behalf or in which the  entities would have access to retail facility space, officials did not identify many specific examples of a need for such services. None of the  postmasters we surveyed reported that they had been approached by  community members in the last 10 years to share or lease space at their  retail facility.

On the other hand, based on studies we reviewed and interviews with  representatives from consumer groups, there may be demand for certain  offerings at retail facilities, such as check cashing and payday loan  services, particularly if offered at a lower price than competitors. For  example, in 2014, the Pew Charitable Trusts conducted a nationally  representative survey of 1,626 adults and estimated that only around a  quarter of American adults would be very likely or likely to use certain  financial products, including check cashing, prepaid cards, bill pay, and  small-dollar loans, if offered at USPS retail facilities. However, for those  surveyed who were already using such services, respondents indicated  they would likely obtain these at USPS retail facilities if offered at a lower  price.

Regarding feasibility, stakeholders and postmasters identified various  issues related to what types of nonpostal products and services made  sense to them. Postmasters indicated that displaying information about  government programs and printing and photocopying services were the  most feasible potential service, about 64 percent (95 of 149) and about 63  percent (96 of 149), respectively. In contrast, postmasters thought  grocery pick-up and public wifi services were the least feasible, with about  78 percent (116 of 149) and 64 percent (96 of 149) of postmasters,  respectively, indicating that they were not feasible. A representative from  one of the employee unions told us that the success of additional  nonpostal efforts would depend on the retail locations’ having adequate  staffing levels. The representative also said that any nonpostal efforts  should be designed to align with community needs and the work that  retail facility employees already conduct. Officials from the Federal  Communications Commission and representatives from a  telecommunications association told us telecommunications companies  may consider leasing space at USPS’s retail facilities that are suitable for  wireless antennas to help build out 5G networks, subject to network  design and business needs. In addition, representatives from one state  motor vehicle administrator told us state motor vehicle administrations  may consider partnering with USPS to provide state vehicle tag and title  services on their behalf, such services, would not require substantial  investment for USPS to undertake.

Finally, USPS officials, federal government entities, and postmasters we  surveyed, and stakeholders identified a variety of other limitations that  would affect the viability of nonpostal products and services. We found  that these limitations included limited interest for partnerships from other  federal government entities, the size and unfavorable characteristics of  retail facility space, complexities related to existing regulatory structures  and entering into new markets, and personnel concerns. Examples of  these limitations are described in table 5. Moreover, we also asked  postmasters what challenges would prevent their selected retail facility  from offering these additional nonpostal products and services. The most  commonly cited challenges were insufficient staff or the need for  additional staff training, particularly for notary services, driver’s license or  other state license services, financial services, and banking services.

As discussed above, given that these potential nonpostal products and  services may have benefits but face concerns about their viability, USPS  and policy makers need to consider the benefits, costs, and limitations of  potential nonpostal efforts before introducing new efforts. In particular,  though some efforts could create benefits like enhanced access for  consumers, a variety of challenges may limit revenue generation in such  a way that the potential offerings are unlikely to significantly improve  USPS’s financial condition. Moreover, there are a number of limitations to  be considered, including a potential lack of demand and factors affecting  USPS’s ability to implement such offerings.

We provided a draft of this report to the Census Bureau; Federal  Communications Commission; GSA; U.S. Department of Veterans Affairs;  U.S. Department of Homeland Security’s Federal Emergency  Management Agency and Transportation Security Administration; U.S.  Department of the Interior’s Fish and Wildlife Service and National Park  Service; U.S. Internal Revenue Service; U.S. Department of Justice’s FBI  and Office for Victims of Crime; U.S. Department of State; and USPS.  The Census Bureau and GSA sent us technical comments, which we  incorporated as appropriate.

In its response, USPS reiterated its legal constraints but noted that there  were other limitations affecting its ability to expand its offering of  nonpostal products and services. These limitations include low net  revenue potential, low potential for significant market share, high  operational costs, and limits on amounts that could be charged. USPS  noted, however, that it continues to explore partnerships with other  federal agencies.

We are sending copies of this report to the appropriate congressional  committees, the Postmaster General, the Chairman of PRC, and other  interested parties. In addition, the report will be available at no charge on  the GAO website at http://www.gao.gov.

If you or your staff have any questions about this report, please contact  me at (202) 512-2834 or rectanusl@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. GAO staff who made major contributions to  this report are listed in appendix IV.

the costs, revenues, and non-revenue benefits associated with U.S.  Postal Service’s (USPS) retail facilities;  the nonpostal efforts USPS has conducted since 2008 to increase  revenues and non-revenue benefits from its retail facilities, and the  costs, revenues, non-revenue benefits, and challenges of such efforts;  and  the key considerations of additional nonpostal efforts that USPS could  take to increase revenues and non-revenue benefits from its retail  facilities.

For this report, we focused on USPS-managed retail facilities, including  USPS-operated post offices, postal stations, branches, and carrier  annexes, as defined in USPS’s Annual Reports to Congress. We also  used the term “nonpostal” to refer to activities that are not directly related  to mail delivery. We selected 2008 to begin our analysis because that  was when new restrictions on nonpostal services took effect.

To describe the costs, revenues, and non-revenue benefits of USPS’s  retail facilities, we reviewed USPS’s financial analyses of its retail network  from fiscal years 2017 and 2018, the only years USPS conducted such  analyses at the time we published this report. For these analyses, USPS  identified the sources and amounts of retail facility costs (e.g., personnel,  rent, and utilities) and revenues (e.g., stamp sales and post office box  rental fees) for most of USPS’s retail facilities. Because some retail  facility costs USPS identified (e.g., rent and personnel) also support non- retail functions, USPS used models to distribute such costs across each  retail facility. USPS’s analyses also calculated the net revenues  (revenues minus costs) for those retail facilities included in its analysis.  Further, USPS examined characteristics of retail facilities, such as the  facilities’ surrounding population densities, to describe factors that may be  related to retail facilities that did or did not achieve positive net revenues.  Based on interviews with USPS officials and USPS documents we  reviewed, we determined the reliability of these analyses were sufficient  to describe costs and revenues of retail facilities. We compared retail  facility costs and revenues with USPS’s total costs and revenues to  determine how much retail facilities contribute to total costs and  revenues. In addition, we identified the number of retail facilities located  in urban, suburban, or rural areas where the revenues did and did not  cover costs. We defined these geographic categories using USPS’s  definitions in its retail facility cost and revenue analysis.

We also interviewed USPS officials to describe why revenue at retail  facilities may not cover costs. To describe non-revenue benefits of  USPS’s retail facility network, we reviewed relevant publications and  studies, such as those conducted by USPS, USPS’s Office of Inspector  General (OIG), and USPS’s oversight body, the Postal Regulatory  Commission (PRC). We also examined 2018 data from USPS on the  number of customer visits at the retail facilities for which data were  available. Additionally, we interviewed representatives from two  consumer groups, which we selected based on their ability to provide us  with consumer viewpoints on retail facilities and their offerings, and two  organizations representing USPS workers at retail facilities: American  Postal Workers Union (APWU) and United Postmasters and Managers of  America (UPMA).

To examine the nonpostal efforts USPS has conducted to increase  revenues and non-revenue benefits from its facilities since 2008 and their  results, we first identified nonpostal products and services offered at  USPS’s retail facilities through interviews with USPS officials and reviews  of relevant publications, such as PRC’s report on USPS’s product  offerings and USPS OIG reports. See table 6 for a complete list of USPS  OIG reports we reviewed. We also identified the number of retail facilities  that offered each identified nonpostal product and service, where data  was available, using USPS’s facility data from November 2019, as well as  information from USPS’s Inspection Service on facilities that participated  in the Department of Justice’s Office of Victim’s National Crime Victims’  Rights week. Because USPS’s facility data included facilities without retail  functions, we merged these with data from USPS’s fiscal year 2018  financial analysis of its retail network to ensure we included only facilities  with retail functions. To describe the revenues of the nonpostal products  and services we identified, we reviewed data from USPS’s fiscal year  2018 financial analysis of its retail network. We also reviewed USPS  OIG reports to identify indirect ways that nonpostal products and services  can contribute to revenue at retail facilities.

To identify the costs of these activities, for which information was  available, we reviewed USPS’s fiscal year 2018 Annual Compliance  Report, PRC’s fiscal year 2018 Annual Compliance Determination  Report, and non-public data provided to us by USPS. From these  reports, we also determined whether the revenue USPS generated from  these nonpostal efforts did or did not exceed costs. We reviewed only  fiscal year 2018’s revenue and costs because we did not have revenue  data prior to fiscal year 2017 and USPS was unable to provide  information on trends.

As one of the nonpostal efforts USPS can currently take at its retail  facilities includes leasing space for revenue, we reviewed USPS’s data on  the amount of vacant rentable space for fiscal years 2017 and 2018 (the  only available years), on tenants at its facilities as of January 2020, and  on the amount of revenue USPS collected from its leased space from  2018. Based on interviews with USPS officials and USPS documents we  reviewed, we determined the reliability of these data were sufficient to  describe USPS’s efforts and results of leasing excess space at retail  facilities. To obtain stakeholder views on USPS’s nonpostal efforts,  including the costs, revenues, non-revenue benefits, and challenges of  these efforts, we interviewed officials from six federal government entities  that partnered with USPS on initiatives as well as representatives from  APWU, UPMA, and two consumer groups. See table 7 for a complete  listing of the entities we interviewed. We also interviewed officials from  the U.S. General Services Administration (GSA), which leases space on  behalf of USPS to other federal government entities, and the Association  of United States Postal Lessors, which represents entities that lease  space to USPS. We also interviewed postal stakeholders at three retail  facilities that had vacant leasable space, leased space to other entities, or  offered nonpostal products and services. We selected these locations to  obtain information on a variety of USPS’s current nonpostal efforts.

To examine the benefits and key considerations of offering additional  nonpostal efforts at USPS retail facilities, we interviewed USPS officials,  postal stakeholders, and postal experts, selected based on prior work;  reviewed prior GAO reports and relevant USPS OIG studies; and  attended a forum exploring community use of USPS’s delivery  infrastructure, including retail facilities. From the studies we reviewed and  stakeholder suggestions, we selected and categorized examples of  nonpostal efforts that were mentioned at least twice. To obtain  stakeholder views on the potential benefits and limitations of such  offerings, we interviewed representatives from consumer, industry, and  state licensing groups. We selected these entities because of their  potential to be affected by USPS offering additional nonpostal products  and services. We also interviewed officials from the six federal entities  that have partnered with USPS on initiatives and an additional six federal  government entities that could potentially establish expanded or new  partnerships with USPS. See table 7 above for a complete listing of the  entities we interviewed. We also interviewed two foreign postal  operators—France’s La Poste and the United Kingdom’s Post Office— that have experience with nonpostal products and services similar to  those we reviewed and reviewed relevant documentation, such as their  annual fiscal year 2018 financial reports. We selected these postal  operators based on prior work and other studies and to provide us with  insight into their experiences. Finally, we reviewed statutes, including the  Postal Accountability and Enhancement Act (PAEA); regulations; and  legal rulings, to evaluate USPS’s current legal authority to provide these  services. The views presented in our report are not generalizable to those  of all stakeholders.

Further, we surveyed USPS postmasters to obtain additional perspectives  on the benefits of USPS’s retail facilities, the nonpostal efforts offered at  those facilities, and the key considerations of offering additional nonpostal  products and services. Specifically, we conducted a non-generalizable,  web-based survey of postmasters who managed retail facilities located in  urban, suburban, and rural areas from August to September 2019. We  defined these geographic categories using USPS’s definitions, as  described above. Using the dataset of facilities from the USPS revenue  study, we removed all facilities that were located in an overseas American  territory, any facility missing a geographic category code, and certain  kinds of facilities that were not relevant to the survey. Using these filters  we identified a sample frame of 26,600 retail facilities. We randomly  sorted the facilities within each of the three geographic categories and  took the first 150 from each random sort. We then matched the selected  USPS facilities with the postmaster responsible for them, using USPS’s  postmaster data provided to us in May of 2019. Because postmasters  may manage more than one retail facility, we capped the number of  surveys an individual postmaster could receive at one. If a postmaster  already selected in the random sort occurred again the selected facility  was omitted from the sample. We restricted the total sample size to no  more than 100 unique postmasters within each stratum. The sample is  comprised of 83 postmasters who oversee an urban retail facility, 100  postmasters who oversee a suburban retail facility, and 100 postmasters  who oversee a rural retail facility. Approximately 52 percent of our  sample—or 146 postmasters—completed the survey. The survey  questionnaire can be viewed in appendix II.

In developing, administering, and analyzing the survey, we took steps to  minimize non-sampling error that may result from differences in how a  question is interpreted and the sources of information available to  respondents. To help reduce measurement error, we consulted an  experienced former postmaster for input on the development of the  survey instrument, and also conducted pretests of the draft questionnaire  with four postmasters drawn from the intended survey population. The  questionnaire was modified throughout development and pretesting to  improve clarity of the questions, and we removed questions when our  modifications were unable to remedy observed difficulties in  interpretation. To maximize survey response, we sent pre-notification  letters by postal mail to the selected respondents prior to launching the  web survey. After launching the survey, we sent multiple email reminders  and extended the submission deadline, and also conducted follow-up  phone calls.

Appendix II: GAO’s Survey of U.S. Postal Service (USPS) Postmasters at Selected Retail Facilities

GAO administered the survey questions shown in this appendix to learn more about USPS postmaster views related to the community benefits of USPS’s retail facilities, the nonpostal efforts offered at those facilities, and the key considerations of offering additional nonpostal products and services. The survey was divided into seven sections covering background, post office benefits to the community, current USPS nonpostal products and services, leasing space for revenue, sharing space, additional nonpostal products and services, and additional information. Open-ended follow-up questions were selectively included to allow respondents to provide more detail about their responses. This appendix accurately shows the content of the web- based survey, but the format of the questions and response options have been changed for readability in this report. For more information about our methodology for designing and administering the survey, see appendix I.

Appendix IV: GAO Contacts and Staff Acknowledgments

Lori Rectanus, (202) 512-2834 or rectanusl@gao.gov.

In addition to the contact name above, Kyle Browning (Assistant Director);  Anne Doré (Analyst in Charge); Isabelle Aboaf; Carl Barden; Karen Chen;  Barbara El Osta; Geoff Hamilton; Serena Lo; Tina Paek; Samuel  Portnow; Malika Rice; Matthew Valenta; and Lauren Voloder made key  contributions to this report.

The U.S. Postal Service has over 31,000 retail facilities—a network reaching into almost every community in the nation. As demand for some mail products has declined, USPS has been unable to cover its costs as it is required to do—putting it on our High Risk list.

A task force and others have suggested allowing USPS to offer additional services at its facilities, such as hunting licenses, to generate revenue and other benefits.

We asked postmasters and industry and consumer representatives about potential services. They said that some—like banking—could expand consumer access. But adding services may require additional expertise or resources.