One thing that has always half amused me, half annoyed me is the immense popularity of gift cards. The reason this is, is because I perceive it to be of less value. Money can be used everywhere, however gift cards are often locked to a single store. The other downside is when used you don't get change, the only way to utilize them fully is to get something to the exact value or higher.
The value to the stores seems to be immense. First off they get money without giving up a product or service. All the while that card sits in your pocket they'd be investing it and earning on it. Then there is the fact that often the card will either be forgotten and go out of date or you'll simply use it once and ditch it because it's not worth carrying around something that only has a few dollars. I'd really like to see the ROI on these cards because I think it'd be surprisingly high.
Yet the reason we do this is to show that we care...slightly. 'I acknowledge you like this store, so here's some money that can only be spent there.' The idea always seemed stupid to me because as a poor uni student I prefer the idea of money that can always be used to say buy me groceries to stop me starving rather than have to be spent on something I may never use.
So the value is added there. Although I think so much more could be done to encourage this. Especially in the current economic position locking in money without providing anything is important. One market untapped with this is the closer relation market. People who are really close to you find it impersonal. I think this is something that could be turned around.
One of the causes for the impersonality is the lack of differentiation of the cards. EB Games is someone who has done a bit differently by having specific games on their cards to help target more specifically but there is still more. I think the chance to actually be able to put messages on the cards could realy lead to a tapping into the market. Hell if it were possible to make the cards out of a metal and you could engrave that I would probably pay a premium for it.
8 comments:
What I like about gift cards is that if I was given money, I'd put it my wallet, not thinking about where it'd be going, and probably spend it on junk like chocolate, and next thing I knew, it'd all be gone. I get that a lot... (where the hell did all my money go? Oh. Right. Wow. I spent that much, accumulatively, on junk-food...)
Wherein a giftcard ensures you don't stupidly spend your money, and that it's spent on something you can actually use. I'm more likely to hold onto money that's contained within a giftcard, than actual money.
I got a $100 Borders gift card as a present, a while ago. If it was actual money I'd have spent that within about a week or two, probably on random, worthless junk that just happens to cost $100 all up. But because I can only spend it at Borders I've saved that money for a lot longer, for a time where I'll actually need it. (School books or whatever...)
It depends on the gift card. Sure, if someone gave me a random giftcard to some random store, I'd feel like it were impersonal. Coles giftcard? Great, I'll buy junk with it, just like I would have if you'd just given me money. But if someone gave me a giftcard to something like Ikea (because they know I have an obsession with home decor), I'd probably love them forever.
My favourite blogger Seth Godin loves talking about gift cards.
Last year, more than $8 billion was wasted in unspent and expired gift cards. Great scam, but great marketing.
@Lili: So you're saying a giftcard is a better idea because it means that those close to you are recognizing your lack of impulse control?
Personally I'd be insulted by that. I really don't like gift cards. They hold up money in my wallet that I'd rather have in the bank earning something and worst of all they make me impulse uy to get rid of them but because I'm stingy about it I must use every cent of it which usually means buying more than the value on the card.
@Zac: That's a scary statistic but also great proof of what this product line offers return wise. Was that Aus wide or world wide?
Aren't you being a bit harsh on chocolate? How about a Lindt gift card?
Bit harsh on chocolate? I haven't actually mentioned chocolate...
Curious that you would use the show site as a link which unfortunately makes me think Bot. Unless you wish to explain yourself further?
Firstly, blogger fails for not allowing me to use quote tags.
@Tannie
Lili said:
if I was given money, I'd put it my wallet, not thinking about where it'd be going, and probably spend it on junk like chocolate
I believe this is what Gruen the show was talking about (although I could be utterly wrong). Lili called chocolate junk. Chocolate doesn't have to be junk, chocolate can be awesome (for example Lindt).
Also, really don't think this is a bot. That it links to a page that isn't even in the top search results for "Gruen Transfer" seems to indicate some form of intelligence. Shouldn't it instead link to something that would make it's master some dosh?
Thanks for picking up on that Trent. I think I was just taking the skeptical approach since I doubted anything linked to the show would appear here.
I agree with Lili, although giftcards can seem impersonal they do prevent you wasting it on things like grocery's. It forces you to buy something special, or more memorable, rather than squandering it on daily needs.
I had a friend who turned 21 a while ago, and whenever anyone asked him what he wanted he said a giftcard to a specific music store. At the end he had a couple of hundred bucks to spend at the store, and you could argue that you could have just given him money to spend and he could have gotten it anyway. But people like to know, or at least have some idea of what they got you and that you got something special.
I have another friend who absolutely loves Grill'd, its her fav fast food resteraunt. It was her 20th the other week and so I got her a Grill'd gift card. From her reaction I'd have to asssume she thought it was great. I didn't buy it for her because I think she has a 'lack of impulse control', I bought it because I know she loves Grill'd and I don't think a burger and chips is an appropriate gift to take into a pub.
That said, the no change thing is a bitch.
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