We present a policy-based approach to managing congestions in Short Message Service (SMS) systems. Congestion situations typically occur on SMS Gateways (SMSGs), which route SMS messages between different networks and domains. In our architecture, an SMS operator can dynamically define the maximum acceptable loss of messages of a non-guaranteed SMS service class, thereby controlling the trade-off between minimal message loss and maximum throughput in an SMS system. We present the functional architecture of a manageable SMSG and discuss the realization of the Policy Decision Point (PDP), which applies the congestion policy on the SMSG. An implementation of our architecture on a commercial SMSG, the EMG, is underway.