2009 Gift Card Study
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From: Ablang on 9 Dec 2009 08:46 2009 Gift Card Study By Ellen Cannon • Bankrate.com http://www.bankrate.com/finance/credit-cards/2009-gift-card-study-1.aspx Experts believe 2009 gift card purchases will bounce back from last holiday season, when spending on the cards decreased to $24.9 billion from $26.3 billion in 2007, according to the National Retail Federation. However, there's some disagreement about how much spending on gift cards will rise. "Consumers are buying gift cards that have less value -- the average value of the cards is down by $6, to $46 from $52," says Dave Sievers, principal and Consumer Products and Retail Practice lead at Archstone Consulting in Stamford, Conn. "Generally, they're buying cards that can be redeemed for necessities and practical purchases -- such as Walmart, Target, supermarkets, restaurants -- versus discretionary items." The 24th Annual Holiday Survey conducted by Deloitte indicated that gift cards will be the No. 1 present for the sixth consecutive year, with 64 percent of consumers saying they'll give or receive them. Deloitte's survey says average spending will increase to $35, up from $28 a year ago. "I don't think gift card spending will be down at all," says Dan Horne, a marketing professor at Providence College in Providence, R.I., and an expert on the gift card business. "People want to give recipients something they can really use, and they don't want to make a mistake. Gift cards will be an alternative." Regardless of whether spending per card is up or down, necessities, not luxuries, will be what gift givers spend their money on. With that trend in mind, Bankrate.com added five new cards to our annual study of gift cards. These are iTunes, Starbucks and three of the major restaurant chains: Darden (Red Lobster, Olive Garden, Longhorn Steakhouse, Seasons 52, Bahama Breeze, the Capital Grille), OSI Restaurant Partners (Outback, Carrabba's, Bonefish Grill, Fleming's, Roy's) and Yum Brands (KFC, Long John Silver's, Pizza Hut, Taco Bell). Once again, we looked at the terms on gift cards from major retailers, including Amazon and eBay, and those from American Express, Discover, MasterCard and Visa, which are known as open-loop cards. In September, American Express announced it would no longer charge the $2 monthly service fee after 12 months -- and that change is retroactive to old cards, too. However, our survey found that Discover, MasterCard and Visa still charge a $2.50 monthly maintenance fee after 12 consecutive months of inactivity. advertisement "This year, the gift card market is very competitive and we're seeing discounting," says Horne. "American Express did away with its fees. To do well, you have to innovate. Competition drives consumer benefit. " All of the open-loop gift cards, which can be used anywhere, have a "valid thru" date now, which is printed on the front of the cards. Previously, cards expired after 24 months. This valid thru date is not an expiration date. However, once the valid thru date arrives, the cardholder must request a new card with a new valid thru date in order to keep using it. "The valid thru date is a technological issue," says Horne. "When you buy online, you need to give an expiration date. Since open-loop cards run on the same rails as credit cards, all those fields have to be plugged in; it has to have an expiration date." "The funds on the card never expire," says American Express spokeswoman Marinna Norville. "Valid thru is just to demonstrate the magnetic stripe for the life of the card. Shelf life for the mag stripe is about five years. If you have a card with a past valid thru date, just call and you'll get a new card." Get in on the CARD Act When the Credit CARD Act pertaining to gift cards takes effect Aug. 22, 2010, gift cards cannot expire before five years have elapsed unless clearly disclosed on the card. The dormancy fee is still allowed after 12 consecutive months of inactivity. The new law does allow a one-time "service fee" to be charged. "National retailers are quite content to sell gift cards without fees," says Sievers, "because it brings shoppers into the stores, and people tend to make purchases that are greater than the gift card value. But the bank cards have to charge fees -- that's how they make their money." None of the retailers' cards has a service fee. Starbucks charges a $1.50 handling fee for cards purchased online but no fee if the card is bought in the store. Also, retailers' cards do not expire, which is good for consumers. "Generally, consumers don't like expiration dates -- who likes to be told what to do and when?" says Sievers. "But human procrastination is normal, so an expiration date forces them to use it." This year, Home Depot joins the list of retailers whose cards can be used online as well as in the store. Only T.J. Maxx/Marshall's and CVS do not allow gift cards to be redeemed online. The restaurant chain gift cards we surveyed, of course, have to be redeemed in the restaurant. The restaurants all offer gift cards in denominations as low as $10, and Yum! Brands has $5 gift cards for Long John Silver's and Taco Bell -- a little stocking stuffer for your stomach. Pizza Hut cards can be reloaded with additional funds, just as Starbucks' cards can. Regardless of what type of gift card you receive this holiday, the advice remains the same. "Get 'em and spend 'em," says Horne. "Boxing Day -- the day after Christmas -- people will be lined up to spend their gift cards at youth-oriented merchants, Best Buy. People without resources but 'pressing needs' -- like teenagers -- will be there." So maybe in the States we should call Dec. 26 "Big Box Day"? Before you buy or use a gift card, check out the issuers with Bankrate's Exclusive: 2009 Gift Card Study. This study was conducted the week of Oct. 12, by Bankrate market analyst Heather Kuhn.
From: pbj on 10 Dec 2009 08:59 On Wed, 09 Dec 2009 05:46:40 -0800, Ablang wrote: > 2009 Gift Card Study > By Ellen Cannon • Bankrate.com > > http://www.bankrate.com/finance/credit-cards/2009-gift-card-study-1.aspx > > Experts believe 2009 gift card purchases will bounce back from last > holiday season, when spending on the cards decreased to $24.9 billion > from $26.3 billion in 2007, according to the National Retail Federation. I have never understood why people give "gift cards". I give cold hard cash, spendable anywhere for anything and without all the conditions, gotcha's, and fees.
From: Michael Black on 10 Dec 2009 12:37 On Thu, 10 Dec 2009, pbj wrote: > On Wed, 09 Dec 2009 05:46:40 -0800, Ablang wrote: > >> 2009 Gift Card Study >> By Ellen Cannon • Bankrate.com >> >> http://www.bankrate.com/finance/credit-cards/2009-gift-card-study-1.aspx >> >> Experts believe 2009 gift card purchases will bounce back from last >> holiday season, when spending on the cards decreased to $24.9 billion >> from $26.3 billion in 2007, according to the National Retail Federation. > > I have never understood why people give "gift cards". I give cold hard > cash, spendable anywhere for anything and without all the conditions, > gotcha's, and fees. > Here we go again. Gift cards allow the giver to be specific on what they want you to spend the money on. You may feel you shouldn't splurge on books when you'd rather eat, but a gift card for a bookstore ensures that you will splurge on books, it can't be spent elsewhere. It's like saying "I know how much you like books, I really wanted to get you one, but then I wasn't sure what book, so I got you this gift card". That's actually a lot better than "I haven't a clue what you might like, don't have a clue what interests you have, so here's cash and you can do whatever you want with it". A gift card ensures that you will splurge, rather than being sensible. I got a nice light winter parka for my birthday because I was given a gift card. I could have bought all kinds of little things, or bought one pair of hiking boots (which didn't seem a good choice since I wouldn't spend that kind of money on hiking boots anyway), but instead I bought this jacket that I've been tempted to buy for a few years but wasn't sure it was a really good choice. It's practical, but also something I'm not sure I would have bought otherwise. And if I'd been given cash, yes, there would have been the temptation to spend it on "practical" things. If you want to gripe, then gripe about the people who merely give gift cards instead of cash. They don't think about the receiver, so that guy getting the bookstore gift card who never reads of course is going to prefer cash so he can use it as he desires. Or gripe about the cards that do put limitations on the use, an expiry date or a charge after a certain time. Those are problems of specific cards, not of gift cards in general. Michael
From: BigDog1 on 10 Dec 2009 15:54 On Dec 10, 10:37 am, Michael Black <et...(a)ncf.ca> wrote: > On Thu, 10 Dec 2009, pbj wrote: > > On Wed, 09 Dec 2009 05:46:40 -0800, Ablang wrote: > > >> 2009 Gift Card Study > >> By Ellen Cannon • Bankrate.com > > >>http://www.bankrate.com/finance/credit-cards/2009-gift-card-study-1.aspx > > >> Experts believe 2009 gift card purchases will bounce back from last > >> holiday season, when spending on the cards decreased to $24.9 billion > >> from $26.3 billion in 2007, according to the National Retail Federation. > > > I have never understood why people give "gift cards". I give cold hard > > cash, spendable anywhere for anything and without all the conditions, > > gotcha's, and fees. > > Here we go again. > > Gift cards allow the giver to be specific on what they want you to > spend the money on.  You may feel you shouldn't splurge on books when > you'd rather eat, but a gift card for a bookstore ensures that you > will splurge on books, it can't be spent elsewhere.  It's like saying > "I know how much you like books, I really wanted to get you one, but > then I wasn't sure what book, so I got you this gift card".  That's > actually a lot better than "I haven't a clue what you might like, don't > have a clue what interests you have, so here's cash and you can do > whatever you want with it". > > A gift card ensures that you will splurge, rather than being sensible. > I got a nice light winter parka for my birthday because I was given a gift > card.  I could have bought all kinds of little things, or bought one pair > of hiking boots (which didn't seem a good choice since I wouldn't spend > that kind of money on hiking boots anyway), but instead I bought this > jacket that I've been tempted to buy for a few years but wasn't sure it > was a really good choice.  It's practical, but also something I'm not sure > I would have bought otherwise.  And if I'd been given cash, yes, there > would have been the temptation to spend it on "practical" things. > > If you want to gripe, then gripe about the people who merely give > gift cards instead of cash.  They don't think about the receiver, > so that guy getting the bookstore gift card who never reads of course > is going to prefer cash so he can use it as he desires. > > Or gripe about the cards that do put limitations on the use, an expiry > date or a charge after a certain time.  Those are problems of specific > cards, not of gift cards in general. > >   Michael That's right, Micheal. My family engages in all sorts of activities. Like hunting and fishing, cabinet making, sewing, books, music, video games, etc. I'm giving them all gift cards from the various stores and web sites they frequent to buy the material they use for those activities. We've been doing that for the past few years because everyone gets what they want or need, without jumping through hoops trying to find out from other family members, who may not really know anyway. It's worked for us, and is now a permanent part of our holiday gift giving. There are no fees for the purchase or use of those cards, nor are there expiration dates. No "gotchas" of any sort. That sort of marketing of the cards is long gone. Any merchant who still does that won't be getting my business anyway. I think the biggest reason some people don't like them, is that the recipient knows exactly how much you spent. So what? The cards I'm buying this year are a little smaller than last because I have less money to spend. If the time comes that I can't give gift cards valuable enough to be useful to the recipient, I'll stop giving them. That's when they'll get a greeting card attached to box of homemade cookies or something. It truly is the thought that counts.
From: pbj on 10 Dec 2009 21:07
On Thu, 10 Dec 2009 12:37:25 -0500, Michael Black wrote: > On Thu, 10 Dec 2009, pbj wrote: > >> On Wed, 09 Dec 2009 05:46:40 -0800, Ablang wrote: >> >>> 2009 Gift Card Study >>> By Ellen Cannon • Bankrate.com >>> >>> http://www.bankrate.com/finance/credit-cards/2009-gift-card-study-1.aspx >>> >>> Experts believe 2009 gift card purchases will bounce back from last >>> holiday season, when spending on the cards decreased to $24.9 billion >>> from $26.3 billion in 2007, according to the National Retail >>> Federation. >> >> I have never understood why people give "gift cards". I give cold hard >> cash, spendable anywhere for anything and without all the conditions, >> gotcha's, and fees. >> > Here we go again. > > Gift cards allow the giver to be specific on what they want you to spend > the money on. You may feel you shouldn't splurge on books when you'd > rather eat, but a gift card for a bookstore ensures that you will > splurge on books, it can't be spent elsewhere. It's like saying "I know > how much you like books, I really wanted to get you one,". That's actually a > lot better than "I haven't a clue what you might like, don't have a clue > what interests you have, so here's cash and you can do whatever you want > with it". A gift card like that says, "I don't trust you to decide how to spend money so I'm going to decide for you". > A gift card ensures that you will splurge, rather than being sensible. What if they'd *rather* eat or pay the rent or fix their car than splurge on a book? What if there's something else they want a whole lot more than a book? What if they'd like to merge the money they received from several different people on one really big gift instead of buying a few smaller items? (Yeah, I know you can do that with general debit cards, but most people are giving gift cards that are chained to specific retailers) > I got a nice light winter parka for my birthday because I was given a > gift card. I could have bought all kinds of little things, or bought > one pair of hiking boots (which didn't seem a good choice since I > wouldn't spend that kind of money on hiking boots anyway), but instead > I bought this jacket that I've been tempted to buy for a few years but > wasn't sure it was a really good choice. It's practical, but also > something I'm not sure I would have bought otherwise. And if I'd been > given cash, yes, there would have been the temptation to spend it on > "practical" things. You could also have spent cash on the jacket. Or anything else *you* wanted or needed. > If you want to gripe, then gripe about the people who merely give gift > cards instead of cash. They don't think about the receiver, so that guy > getting the bookstore gift card who never reads of course is going to > prefer cash so he can use it as he desires. Thoughtlessness is a different issue. Maybe I'll gripe about it next week. > Or gripe about the cards that do put limitations on the use, > an expiry date or a charge after a certain time. Those are problems of > specific cards, not of gift cards in general. That's like saying that crime is a problem with specific people, not of people in general. The problems are real and they're widespread enough to prompt Federal action: ---------------------------------------------------------------- http://www.consumeraffairs.com/news04/2009/11/fed_gift_cards.html Federal Reserve Proposes Gift Card Rules Regs would deal with fees, expiration dates By James Limbach ConsumerAffairs.com November 16, 2009 The Federal Reserve Board is proposing rules that would restrict the fees and expiration dates that may apply to gift cards. The rules would protect consumers from certain unexpected costs and require that gift card terms and conditions be clearly stated. The proposed rules would prohibit dormancy, inactivity, and service fees on gift cards unless: • There has been at least one year of inactivity on the certificate or card; • No more than one such fee is charged per month; and • The consumer is given clear and conspicuous disclosures about the fees. (etc.) ---------------------------------------------------------------- With cash, the giver and the recipient don't have to waste time scouring reams of legal fine print for scams and loopholes. |