The Gift Card Explosion

[WSUCougar]

They're everywhere. Was pumping gas this morning and saw a placard at the gas pump exhorting me to, "Get the perfect gift" or somesuch...a BP gift card!!! w00t!!!

What does this say about gift giving?

Don't get me wrong, under the right circumstances I enjoy getting a gift card to a cool place. However, it seems like the default thing now. "Oh, let's just get X a gift card." It has become the safe choice, rather than making an effort to get someone a special gift.

Personally, I really enjoy trying to match a gift with a person's interests. Sure, I've been thwarted before, but I also have hit the mark many times.

Are you a gift card proponent? Am I just too sentimental?

[B & B]

I believe its an impersonal gift, but in this day and age, I find myself having to buy gifts for people seen once a year. On Christmas. Therefore these gift cards have a time and place. Used sparingly.

[JeeberD]

That's all my sister-in-law asked for for Christmas so that's what she's geting from us. Personally I tend not to give them unless I have no clue what else to give a person, but some people would rather just shop for themselves...

[Subby]

We bought Starbucks gift cards this year for our kids regular school teachers and aides, sunday school teachers, and bus drivers.

I think we ended up buying 17 altogether. The thought of having to go specialized in each of those cases makes me woobly.

[JonInMiddleGA]

Originally Posted by WSUCougar

Are you a gift card proponent? Am I just too sentimental?

1)Somewhat.
2)Probably.

Most recent case in point was yesterday - wife picked up gift card for someone in a client's office. She's a voracious reader & so we got her a gift card from the local bookstore just down the street from her office. We matched her interests with the choice of the gift card, since trying to buy specific titles for someone you don't know that well seemed like a recipe for failure.

My grandmother, who has some mobility issues & doesn't like to go out very much, has given gift cards for the past 2-3 years. Her trying to pick out XBox titles for Will or book titles for me, etc. isn't a pretty picture & would do nothing so much as create a good bit of grief & worry for her ("did I get the right thing", "will they like it", "are you sure this is the right one", etc.).

In reverse, I've given her gift cards as part of her Christmas presents on occasion as well. She's made good use of them for things she specifically wanted but needed to shop for herself (trying on clothes, finding just the right shoes, etc.).

Ditto my mother-in-law, who have given me B&N gift cards at least three years running. It's clean, it's easy, she knows I enjoy what I get with them, and it's definitely appreciated. Dang, almost seems like the perfect gift.

So I guess what I'm saying is that I draw some distinction between selecting gift cards for at least semi-specific reasons vs blindly handing out cards from the BP.

[scooper]

I tend to go a couple ways on this. I know my wife and I will get an assortment of cards from my mother. She buys them through church all year long and give them to us at Christmas. It's nice because when things are tight, it allows us a nice night out. We also save gas gift cards for travelling.

I don't enjoy buying them much. I enjoy the challenge of finding the perfect gift. I put a lot of thought into gift giving and I try to go above and beyond simply giving people exactly what they ask for, though I often give them that as well. This is especially true with nephews and nieces. My wife and I always seem to come up with their favorite gifts year in and year out. Now one of them has outgrown toys and is in pure video game mode. I don't know what games to buy him so we get him cards to bookstores, video store and toy stores. He's really no fun to shop for.

I made an exception with my wife this year. Sometimes she treats herself in the morning on her way to work and stop at Starbucks or Brueggers Bagels, but she has a hard time justifying spending the money when she can make coffee or get breakfast at home. So I bought her a couple cards for each as stocking stuffers. I feel in this case like I put more thought into the cards than simply buying blockbuster cards for my nephew simply to fulfill a gift giving obligation.

So in short, I think they are less personal, but they can be thoughtful as well.

[WSUCougar]

Originally Posted by JonInMiddleGA

So I guess what I'm saying is that I draw some distinction between selecting gift cards for at least semi-specific reasons vs blindly handing out cards from the BP.

I think that's fair middle ground.

I guess I just dislike the sentiment that some people have adopted - sort of the "I have to get a gift and a gift card is easiest." Also, my sister-in-law always asks for Wal-Mart gift cards for her. Just kind of turns me off. *shurg*

[WSUCougar]

I agree, Scooper.

[scooper]

Originally Posted by WSUCougar

I think that's fair middle ground.

I guess I just dislike the sentiment that some people have adopted - sort of the "I have to get a gift and a gift card is easiest." Also, my sister-in-law always asks for Wal-Mart gift cards for her. Just kind of turns me off. *shurg*

I understand this sentiment. It's like someone saying "you don't know me well enough to pick out something I'd like."

I think asking for them takes a lot of the fun and thought out of gift giving. If the trend goes much further, we might as well all just go out shopping for ourselves each December. It's almost getting to be like swapping equal amounts of cash.

[Kodos]

They're fine. They allow the person to get something they truly like, rather than being subjected to a gift that doesn't fit their taste.

The gift card makers have to love it. Sell basically a piece of plastic. If it's cashed in, that's fine, but if it gets lost, that's pure profit, baby!

[sachmo71]

I am a gift card proponant because their popularity will eventually bring about their demise. Companies love them because 30-45% of them go unredeemed, but as they become more and more commonplace, people will remember to use them, driving down the profitability of the card. When it costs more to make them than the return value, you should see less of them.

The stores that use them as loyalty cards are going to be the ones that stay in the game, however.


And I think they are great gifts for relatives that you know enjoy shopping for their own things, or people you don't know well.

[digamma]

Our office secret Santa this year was a mandatory gift card exchange. Initially, I thought it was a dumb idea, but people had fun with it and got creative with the places they got their gift cards. Most creative: Angelo's Pawn Shop, a few blocks from our office. Least creative: Starbucks.

[Samdari]

Originally Posted by WSUCougar

my sister-in-law always asks for Wal-Mart gift cards for her. Just kind of turns me off. *shurg*

I am with you - they seem impersonal to me. On the other hand, I bought several myself this year for people I don't know that well. My brother's girlfriend wears clothes I could never possibly pick out, so she gets a gift card from Bebe (or as I call it, Slut-ay). My son's day care provider gets one becuase I don't know her that well personally.

I HATE when people ask for them. That really really turns me off, unless there is a specific and good reason. My dad asked for gift cards from a sporting goods store because he wants his kids to chip in and buy him new golf clubs - makes sense, since none of us would spend that much on him on our own, but I'd love my gift for him to be golf clubs, so I bought that gift card happily. On the other hand, my sister asked everyone to buy her gift cards because she is sick of everyone having taste in clothes so inferior to hers that we cannot possibly do her justice. F*ck you, you get the ugliest home decor item I could find - from a non-chain store 400 miles from you.

[Samdari]

Originally Posted by digamma

Angelo's Pawn Shop

Wow. A pawn shop with gift cards. That alone has me warming up to them.

[digamma]

Originally Posted by Samdari

Wow. A pawn shop with gift cards. That alone has me warming up to them.

He took some liberties with the definition of "card." To be more specific, it is probably better described as a hand written receipt stating it was worth $20 in store merchandise, "no more, no less."

[sachmo71]

Originally Posted by Samdari

I HATE when people ask for them. That really really turns me off, unless there is a specific and good reason. My dad asked for gift cards from a sporting goods store because he wants his kids to chip in and buy him new golf clubs - makes sense, since none of us would spend that much on him on our own, but I'd love my gift for him to be golf clubs, so I bought that gift card happily. On the other hand, my sister asked everyone to buy her gift cards because she is sick of everyone having taste in clothes so inferior to hers that we cannot possibly do her justice. F*ck you, you get the ugliest home decor item I could find - from a non-chain store 400 miles from you.

[Fidatelo]

Originally Posted by Samdari

F*ck you, you get the ugliest home decor item I could find - from a non-chain store 400 miles from you.

That is so totally awesome. I love Christmas!

[cthomer5000]

I only go with them when i have ZERO idea what to get someone. 1 additional scenario, which for the first time popped up for me today. I have a decent number of part-time employees who work directly under me, I got them all identical giftcards for the sake of ease.

[sovereignstar]

Make less fun of gift cards and more of x-mas.

[Schmidty]

I like me some gift cards. Shopping is one of my favorite things to do.

[cthomer5000]

Originally Posted by sachmo71

I am a gift card proponant because their popularity will eventually bring about their demise. Companies love them because 30-45% of them go unredeemed, but as they become more and more commonplace, people will remember to use them, driving down the profitability of the card. When it costs more to make them than the return value, you should see less of them.

Seriously, what percent do you figure need to go unredeemed to make it worthwhile? 2%? Their success will never die.

[Desmond]

Gift cards are fine gifts to give and to ask for. It's not an admition of laziness, it's an acknowledgement that you arn't the smartest or best shopper in the world. Get over yourselves.

[Raiders Army]

Give the gift of mail-in rebates instead. If you have those who don't like giftcards, then give them mail-in rebates. They'll ask you for giftcards next year.

I bought two portable DVD players this year with mail-in rebates. Unfortunately, it's only one per household. I'll give my brother a $20 mail-in rebate with envelope and stamp this year...heh heh.

[sachmo71]

Originally Posted by cthomer5000

Seriously, what percent do you figure need to go unredeemed to make it worthwhile? 2%? Their success will never die.

Although my answer was mostly tongue in cheek, there could be a point where some of the zanier gift card providers leave the game. Since most companies pay services to run their gift card programs (they aren't free to run once they get off the ground, and they cost more than you might realize), there is a point of diminishing returns.

[Joe]

just give a donation in their name to the human fund..

[cthomer5000]

FWIW, i just came across a stat on yahoo finance stating that 8.5% of gift cards go unused.

[clintl]

I think it depends on the gift card. My brother usually sends me a Best Buy gift card, which is a great choice, because I can go buy a few CDs I want, and he doesn't know what I have. On the other hand, a BP gift card would be a pretty bad choice because we don't have any BP stations here (unless ARCO honors them).

[Senator]

I love getting them because I don't like to get presents "just because" it is Christmas. With a gift card, somewhere along the year, a store will have something I actually want, and lo and behold, it is nice to know I already have it paid for and can buy it without guilt.

THATS FREEDOM, BABY!!

[Eaglesfan27]

Originally Posted by cthomer5000

FWIW, i just came across a stat on yahoo finance stating that 8.5% of gift cards go unused.

I just realized the other day that I have 2 unused cards from Christmas in 2004. Fortunately, neither of these particular ones seem to have any expiration date.

[cthomer5000]

I'll have to admit that the 8.5% is actually lower than I expected. So I would bet that stores are counting on that less than we all thought. Even without that "found money" they still get a lot out of gift cards:

*Tons of advance sales (they're being paid for sales long before those products leave the store)
*Marketing. You've now got shoppers in your door (and probably a pretty high % of new ones)... can you retain them?

[cuervo72]

Originally Posted by JeeberD

That's all my sister-in-law asked for for Christmas so that's what she's geting from us. Personally I tend not to give them unless I have no clue what else to give a person, but some people would rather just shop for themselves...

My in-laws got me two gift cards (along with other things): one for Red Lobster, and one for Olive Garden.

[clintl]

Originally Posted by Eaglesfan27

Fortunately, neither of these particular ones seem to have any expiration date.

In California, it's illegal for them to have an expiration date. They are treated under state law as being the same thing as a gift certificate, and it's been against the law for gift certificates here to have an expiration date for years.

[Lorena]

The thing with gift cards is that the store ALWAYS makes a profit. Think about it, you get a $20.00 gift certificate, you'll most likely spend over $20.00 right? There's the profit... especially the pawn shop.

This year, we bought our family gift cards WITH a small present. For example, my mother-in-law loves crafts, so I got her a "make your own bath salts" kit along with a Michaels gift card. My brother-in-law and wife have pets, so we got them small presents for their pets, along with a Petco gift card.

[JeeberD]

Originally Posted by cuervo72

My in-laws got me two gift cards (along with other things): one for Red Lobster, and one for Olive Garden.

Use them both at Bahama Breeze if there's one near you. Best Darden restaurant that I've been to..

[cuervo72]

Don't think they have one around Frederick. We'll go to the other two though, we regularly hit Lobster after church.

---------------

As for the gift cards' profitability, I think you also have to factor in that you're giving the store guaranteed money w/o them giving any merchandise until a later date. So I'm thinking there's a wee bit of value in having that cash in advance (interest anyone?).

Oh, and Coug - I think next your sis-in-law will be asking for you to pay for her groceries for a week. Maybe as a birthday present.

[JeeberD]

Originally Posted by clintl

In California, it's illegal for them to have an expiration date. They are treated under state law as being the same thing as a gift certificate, and it's been against the law for gift certificates here to have an expiration date for years.

I know that OG gift cards don't really have an expiration date but if they aren't used in 24 months then $1.25 will be deducted monthly until it either had no more value or the card is used. I think it says that the deduction isn't valid in some states, so that probably has to do with what you're talking about in Cali.

cuervo, it looks like the closes BB to you is 43 miles away (Towson). Too bad, their Jerk Chicken Pasta friggin' rocks.

[SirFozzie]

in MA, they cannot take "yearly inactivity fees" or assign "expiration dates" to gift certificates/cards.. they have to take them. Means they don't push em as hard in MA, because there's less profit from lost/misplaced cards.

[Grammaticus]

Originally Posted by sachmo71

I am a gift card proponant because their popularity will eventually bring about their demise. Companies love them because 30-45% of them go unredeemed, but as they become more and more commonplace, people will remember to use them, driving down the profitability of the card. When it costs more to make them than the return value, you should see less of them.

The stores that use them as loyalty cards are going to be the ones that stay in the game, however.


And I think they are great gifts for relatives that you know enjoy shopping for their own things, or people you don't know well.

Gift card programs have different costs for different merchants. It is like any service, the price is negotiable. Bottom line is, the gift card costs about the same for the merchant as it does to accept a debit transaction. Which depending upon the average ticket for the merchant is pretty close to what it costs for a bankcard transaction. It is a very profitable program for merchants, even if 100% of issued cards were used. Additionally, you are giving someone funds that must be spent at that merchant location, which is a huge benefit and well worth the cost of processing. It is also very beneficial for companies like the one I work for, who process transaction services for merchants. Once a merchant invests in an individualized program like gift cards and loyalty cards, they are far less likely to change from one processor to another, as long as you provide good service.

I have never conducted research on diminished balances or unused card volume for a merchant. But I can tell you that I helped setup several of these programs and with a regional franchise that sold goods similar to Wal-Mart, after 3 years of running the program, the merchant was carrying a 7 million dollar liability on their balance sheet into the next year. This represented 3 years of unused card volume for a relatively small merchant. This caused problems and this merchant decided to have unused card balances start to diminish monthly after 6 months of issue. I think this particular merchant chose to reduce the balance by $5 per month until the balance was reduced to zero or used.

The gift card market works this way. No one wants to carry unused card balances year to year as a liability, so almost all cards start to diminish monthly at some point. Some cards start diminishing as soon as 30 days. This point is not marketed, but is a real fact. If you give the card to a lazy person or a procrastinator personality type, it may not get used and you are giving your cash to Best Buy or whoever. On the flip side, if you get a gift card, use it ASAP.

To the original question, I think people give them as a way of personalizing cash. Basically, I know enough about you as an individual to realize you like coffee, books, electronics or whatever. I try to steer clear of giving them because of the huge amounts of money that gets retired. I remind the recipient at the time of giving that it will disappear if they don’t use it fast.

[21C]

This thread made me think of my mother who is Polish born. For her whole life, she has always given me money for Christmas or birthdays. She always says that she doesn't know my tastes and doesn't know if I'd like what she'd get me so cash is safer. In turn, she prefers to get cash for her own presents as she either never uses anything bought for her or tries to give away things she receives.

It started out at $20 and I would respond with $20 for her gifts during the year. Later when I was earning more, I'd put in a $50 but this meant she raised her gifts to $50 when the time came for me. I upped it to $100 which saw her do the same right back.

I think that it is some sort of cultural thing since she grew up in the Depression and lived through the Second World War but it is annoying to me as well. All of her presents to family or for friend's weddings is cash.

It gets to the stage where she'll give me 100 bucks for Christmas, I'll go and get her card with $100 in it and basically give it right back to her. I tried to explain the folly of our "pretend" gifts but she didn't understand. I ended up saying that I should give her $1000 and then she should give me $1000 right back.

Her response?

"Oh no! That would be too much!"

[ctmason]

At this moment I have in the room with me

-Two $5 gift cards to AMC theatres (from dentist)
-One $5 gift card to Starbucks (from my dentist, too, doesn't that seem a little odd?)
-$40 in gift certificates to Savers (because I just am that cheap when it comes to clothing)
-$20 in "Ultratainment" gift certificates usable at multiple stores/restaurants
-Two free movie passes at Harkins theatres (no premieres)

I have given almost exclusively gift cards this Christmas to friends. Relatives I take the time to buy something special. Personally, I've found that gift cards are typically the most useful thing a person can have, and I'm all about helping out people in the areas they need. For instance, last year a group of friends pitched in for a $200 AutoZone gift card for a friend that was having trouble fixing his car. It literally gave him depenedable transportation to and from work, and he was thrilled.

Considering I'm avoiding my friends because I haven't finished gift shopping for "Christmas," I think I'll wind up getting mostly gift cards anyway.

[cuervo72]

Originally Posted by JeeberD

cuervo, it looks like the closes BB to you is 43 miles away (Towson). Too bad, their Jerk Chicken Pasta friggin' rocks.

Hmm, I might be inclined to go to Towson for the Melting Pot (though probably n ot as there is one in Rockville) or Rainforest Cafe (the kids like it, and they closed the one in Tyson's Corner. This could be a harder sell, though it sounds pretty tasty.

[Julio Riddols]

Quick question.. Why the hell wouldn't you just give someone money? Why limit where they can go or what they can do with their gift? Gift cards are pointless to me.

[RPI-Fan]

I hate gift cards under pretty much any circumstances. If you don't know them well enough or don't care enough to buy them a real gift, don't buy anything at all.

[Logan]

Originally Posted by Julio Riddols

Quick question.. Why the hell wouldn't you just give someone money? Why limit where they can go or what they can do with their gift? Gift cards are pointless to me.

Because some people feel awkward about handing someone a $50 bill and saying "I couldn't think of anything decent to get you, and was too lazy to go anywhere." At least with a gift card, it shows you got out of the house.

[st.cronin]

Originally Posted by George W Bush

just give a donation in their name to the human fund..

This is the right idea. My girlfriend and I can never figure out what to get her parents, so we always end up just giving money to their church.

[cthomer5000]

Originally Posted by RPI-Fan

I hate gift cards under pretty much any circumstances. If you don't know them well enough or don't care enough to buy them a real gift, don't buy anything at all.

One of the dumbest things I've ever read.

[kcchief19]

Originally Posted by Julio Riddols

Quick question.. Why the hell wouldn't you just give someone money? Why limit where they can go or what they can do with their gift? Gift cards are pointless to me.

I think that's why gift cards are taking off to a large degree -- it's similar to cash, it just has the appearance of being more personal. When you give a gift card, you're not saying, "I give up, here's cash." You're saying "I know you like to shop here so you can get yourself something you want."

I used to be on the anti side of gift cards, but I'm more on the pro side now. There are plenty of circumstances where gift cards are very appropriate. I got Mrs. kcchief19 a gift card to a spa last year because she likes getting a massage and whatnot but thinks it's an unnecessary luxury and would never spend her own money on it. I asked for Best Buy gift cards this year because I'm saving up for a new TV and a gift card there has more personal value to me than a gift card somewhere else.

There are also plenty of people I know who are impossible shop for and gift cards are great. I think it's a better gesture to give someone a gift card than to give someone something they don't really like just because it makes you feel better. And I don't have a problem with people asking for gift cards. Giving a gift should be about giving people something they want. But that's just me.

If I knew someone would didn't have much money and maybe wasn't going home to visit their family for the holidays because they didn't have gas money, even a BP GC might make sense. Maybe.

[ThunderingHERD]

My favorite are the American Express gift cards. It's no more personal than giving cash, they charge you a $4 fee for a $25 card plus, since it works like a regular credit card, you can't run the card then pay the balance like you would with a regular gift card. If your purchase is over what's left on your card, you'll just get an "Alternate tender required" or whatever. I'd imagine the amount of money left unused on those things is staggering.

[RPI-Fan]

Originally Posted by cthomer5000

One of the dumbest things I've ever read.

I should have qualified it with a "In my opinion..." (though I would guess that's assumed on this forum).

But what makes it dumb? The fact that I feel gift cards are a terrible, terrible gift that cost consumers and the government money?

[cthomer5000]

Originally Posted by RPI-Fan

I should have qualified it with a "In my opinion..." (though I would guess that's assumed on this forum).

But what makes it dumb? The fact that I feel gift cards are a terrible, terrible gift that cost consumers and the government money?

There simply are situations where you have to buy people gifts. People you barely know. A girlfriends' parents you've met once (or not at all). Employees who you supervise but barely know other than in a work environment.

Do you really just get them nothing? No fucking way. A lot of bullshit gift-giving goes on in this world out of social necessity. In my opinion, the gift card has saved a lot of us from having to give a bad gift.

So the "if you don't know them well enough to get them a gift, dont get them anything" is completely unrealistic.