... Or do they open everything and only auction off any merch that is found?
They only auction off the merchandise. Any cash they find goes back to the Federal Government. Pornography, firearms, marijuana and other drugs are destroyed. Gift cards continue to be problematic, they are not auctioned off. I think they destroy them.
In 2002, the Topek Kansas Dead Letter Office opened a parcel and found what appeared to be Marc Chagall 8-by-10-inch painting "Study for 'Over Vitebsk". It was found to be an original stolen from a museum and it was returned to Israel by the USPS.