When at the supermarket near the office buying my breakfast Diet Coke and Daily News this morning, I saw a rotating rack filled with a gaudy assortment of gift cards. Not gift cards for the supermarket, mind you, but for online merchants and retail stores selling books, gifts, apparel — you name it.
Gift cards must be part of the zeitgeist, because just yesterday one of Multichannel Merchant’s sister e-newsletters, Chief Marketer Report (www.ChiefMarketer.com), had published a story about a partnership between Stored Video Systems (SVS) and Coinstar — the company that owns those kiosks where you dump all your loose change and they’ll tally it for you in exchange for taking 8.9% off the top. Now Coinstar will give customers the option of receiving a gift card for the full sum of the change they’ve given over to be counted in addition to the cash minus the 8.9% service fee. In addition, SVS was launching its own “gift mall” in which merchants can sell gift cards from other companies in addition to their own.
“Merchants are now looking for ways to get their gift cards in customer hands outside the traditional in-store delivery system,” Bob Skiba, SVS executive vice president/general manager, said in a statement.
What a boon to direct marketers that don’t yet have a retail presence! Clearly online merchants, like their retail counterparts, have come to appreciate the benefits of selling gift cards. According to Lauren Freedman’s article in this issue (“Wish list,” page 29), 86% of the consumer Websites visited by her company, The E-tailing Group, during the fourth quarter of 2004 sold gift cards or certificates, up from 77% the previous year. I’m only surprised that 14% of the sites didn’t offer them — especially since consumers who receive gift cards generally spend more than the face value of the card when making their purchase.
Selling gift cards can also help you smooth out your seasonal cycle. According to research firm Deloitte & Touche USA, as of the end of January, 39% of gift cards purchased during the holiday season had yet to be redeemed.
I realize that I’m coming off as a booster for the gift card industry. Okay, I’ll admit it: I am not a disinterested party. My husband is a wonderful man, but he’s lousy at picking out gifts. I’ve told him to simply buy me a Borders gift certificate for every birthday and Hanukkah, but he insists on getting “creative.” If, say, Garnet Hill or Boden or Bluefly gift certificates were readily available at the checkout area of our local Stop & Shop, he could get creative in a way that wouldn’t necessitate my having to trudge to the mall to make a return.