The Holiday Gift Card Debate
With Thanksgiving coming up this Thursday, it’s safe to say the holidays are upon us and accordingly, gift cards are once again a hot topic in the media and consumer blogosphere.
I have always had mixed feelings about the cards as legitimate, thoughtful holiday gift-fare—they often seem to serve little purpose other than to clog my wallet. They’ve furthermore proved remarkably adept at expiring mere days before I finally attempt to redeem them and I try not to think about the the many cards I’ve been given that have gone unused.
When a college friend very generously gave me a spa certificate for my birthday a couple of years ago, I put it in a drawer and vowed to redeem it upon completion of my final exams. Of course, I forgot about my opportunity for a free facial in the chaos of end-of-the-year festivities and when I finally booked myself in for an appointment the following Christmas, I was unceremoniously informed that the gift card had expired. Guilt-ridden, I resolved never to admit my forgetfulness to my friend– and also began to think twice before purchasing gift cards for others.
Undoubtedly, I am not alone in this frustration and complex gift card fees and expirations have resulted in a windfall for retailers.
According to The New York Times:
“In 2006 alone, $8 billion in gift card sales were never redeemed. That same year, shoppers spent about $80 billion on gift cards. Of that, consumers forfeited 10 percent — about $8 billion — either because the card was lost, stolen, never used, or fees cannibalized what was left on the card.”
Certainly, $8 billion in lost cash is not a number to sniff at — and the recent buzz around gift card management demonstrates that reporters, bloggers and finally consumers are really beginning to pay attention.
On November 13th, Consumer Reports kick-started a public education campaign aimed at creating awareness around the hazards of gift cards with a full-page ad in The New York Times. USA Today, Reuters, The Consumerist, the NPR News Blog and The Motley Fool have all discussed the dirty little secrets of the gift card industry—and that’s just the tip of the iceberg.
With all this coverage, one could say that consumers finally are striking back against an industry that profits — and to a vast degree — from a combination of shopper ennui, ignorance and the post-holiday frenzy, all of which result in deferred or perpetually delayed card redemption.
A new LaunchSquad client is also moving into this space with a free personal web application that helps users better manage gift cards, and loyalty/rewards program memberships. Launching this week, the service is called Leverage and allows users to purchase, track and exchange gift cards and even earn interest on gift card balances for the first time.
What with the proliferation of coverage around the industry and launch of a comprehensive gift card management service like Leverage, I can’t help but wonder if the days of missed expirations and the subsequent exasperation are coming to an end.
$8 billion is a pretty big number. This year, by actually proactively managing my gift cards rather than relegating them to a lonely drawer or the recesses of my already painfully congested wallet, I hope to do my part to put a dent in it.
Let the shopping begin.
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Comments (6 Responses)
[...] persephonesawakening had some great ideas on this topic.You can read a snippet of the post here.With Thanksgiving coming up this Thursday, it’s safe to say the holidays are upon us and accordingly, gift cards are once again a hot topic in the media and consumer blogosphere. I have always had mixed feelings about the cards as … [...]
[...] Original post by Leonora [...]
Finally - transparency in the gift card space! Companies like Leverage should not only enhance customer experience, they’ll also force retailers to re-examine deceptive gift card policies. Once out in the open, I can’t imagine that hidden fees and expiration dates will be tolerated by consumers.
As I too am guilty of an overstuffed wallet and a drawer full of forgotten cards, a gift card tracking program is a sorely needed development. From a public relations perspective (I’m also in tech PR), what an exciting company to launch! It’s a practical service but with an online banking meets social networking meets internet retail approach.
As for the rewards program and gift card exchange, I’ll be interested to see how those play out.
Social network? Is there really going to be an SN built around gift cards? Or just the exchange?
[...] Gift cards have become the number one holiday gift and, as my colleague Leonora points out, it’s a little known fact that more than $8 billion in gift card value is lost each year. We kicked off the launch with stories in TechCrunch and LA Times and then made a heavy broadcast TV push, landing coverage on CNN Headline News, Fox Business News, ABC News and CBS News. The company’s CEO Mark Roberts was also featured on CNBC’s Squawk Box discussing the impact of gift cards on the holiday shopping season. [...]
The Holiday Gift Card Debate
Posted on November 19th, 2007 at 12:16 pm.
[...] Original post by Leonora and software by Elliott Back [...]