Local traders have complained about the VAT concession

It follows criticism they take advantage of a rule allowing goods below �18 to go VAT-free to the UK.

The Office of Utility Regulation (OUR) is to look at what action can be taken to reduce risks to local businesses.

The Jersey authorities have already come to an agreement with their bulk CD and DVD mailers to avoid excessive exploitation of the tax concession.

Guernsey's Commerce and Employment Department is asking the OUR to identify how the island can best introduce similar controls, ahead of holding talks with Guernsey Post, Treasury and Resources and the Policy Council.