Small Business

The Post Office Returns to the Local Store


“I’d like to hire someone else and be open a few more hours. This could be key.” —Heather Gable

Photograph by Adam Golfer for Bloomberg Businessweek

“I’d like to hire someone else and be open a few more hours. This could be key.” —Heather Gable

Heather Gable has had it rough. During the recession, sales dropped off at Finger Lakes Coffee House, the business she owns in Van Etten, a small Upstate New York town. She had to lay off most of her employees. At least there’s one recent development to keep her optimistic: In March she opened a post office inside her store. She hopes she’ll be able to sell lattes and bagels to customers who come in to mail letters and packages. “I’d like to hire someone else and be open a few more hours,” Gable says. “This could be key.”

Gable is one of the newest business owners to sign up with the U.S. Postal Service’s nationwide Village Post Office project, which is intended to help the imperiled federal agency save money while giving local entrepreneurs a boost. The USPS has 31,272 post offices across the country. Only about 6,000 generate enough business to cover costs. In May 2012, the USPS announced a plan to save $500 million by reducing hours of service at 13,000 rural branches.

There are 31,272 post offices across the country. Only about 6,000 generate enough business to cover costsPhotograph by Adam Golfer for Bloomberg BusinessweekThere are 31,272 post offices across the country. Only about 6,000 generate enough business to cover costs

Hoping to minimize the inconvenience to customers, the Postal Service is encouraging coffee shops and grocery and hardware stores to provide limited mail services. They can sell stamps, ship flat-rate packages, and rent out post office boxes. More ambitious business owners can choose to offer all the mail handling services of a full-fledged post office—though that requires costly security measures to meet federal standards, including installing steel-lined walls to thwart mail thieves. The USPS expects to have 300 Village Post Offices around the country by this summer and many more in the future. “It’s a low-cost alternative for us, and it’s a win-win situation when you look both from a customer service aspect and a community aspect,” says Edward Phelan, the USPS’s vice president of delivery and post office operations.

Before the Civil War, the vast majority of post offices were located in country stores and taverns. “There were virtually no free-standing post offices,” says Richard John, author of Spreading the News: The American Postal System from Franklin to Morse. He says the government gave small business owners a share of their postal revenue, but no salary. Today they get even less. Gable says she receives $100 a month from the Postal Service. The main attraction for entrepreneurs, then and now, has been the prospect of getting more people through their doors. John says the postal service began erecting free-standing post offices after the Civil War when the public was more tolerant of federal construction projects.

One natural skeptic of the new push toward Village Post Offices is Sally Davidow, spokeswoman for the American Postal Workers Union, which represents 220,000 USPS employees. She questions whether newcomers like Gable are qualified to handle mail. “People need an experienced postal clerk who can answer their questions,” she says.

Gable’s customers don’t see her inexperience as an issue. On an April morning, the Finger Lakes Coffee House was filled with customers. Most said they still had boxes at the regular post office in town. (So does Gable.) But Will Smith, a retired Cornell University employee, said he liked taking his business to Gable’s place. “She has Wi-Fi, so you can bring your laptop, do your bills, and mail them here.”

Gable says she’s not seeing a ton of postal business yet. But she notes that the USPS recently cut the hours at Van Etten Post Office from five and a half to four on weekdays, and says if the government eventually closes it she’ll be the primary beneficiary. At the moment, she’s more concerned about getting the USPS to deliver on its promise to install a big blue mailbox on the sidewalk outside her shop. When people stop to mail a letter, they’ll see the sign over the door advertising her mini-post office inside. “That will entice more people to come in,” Gable says. “I mean, I drive around looking for those blue boxes.”

Perhaps she shouldn’t get her hopes up too high. Valerie Warner works at McDonough’s Valley Hardware in Keene Valley, N.Y., about five hours northeast of Van Etten. Her brother, David McDonough, the store’s owner, opened one of the first Village Post Offices in 2011 after the USPS closed the local government-operated one. Warner says sales haven’t increased much, though she’s not complaining. “It’s been great just having our post office back,” she says.

The bottom line: The USPS wants businesses to sell stamps and mail packages in towns where the post office has closed or cut hours.

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Leonard is a staff writer for Bloomberg Businessweek in New York.

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