Comments on: All Time Great Scams: The Gift Card http://stengazette.org/wordpress/2004/12/18/all-time-great-scams-the-gift-card/ Tue, 06 Jan 2009 12:55:22 +0000 http://wordpress.org/?v=2.0.2 by: SG http://stengazette.org/wordpress/2004/12/18/all-time-great-scams-the-gift-card/#comment-83 Wed, 22 Jun 2005 05:33:50 +0000 http://stengazette.org/wordpress/2004/12/18/all-time-great-scams-the-gift-card/#comment-83 Follow-up ----------- Hot off the AP wire, merchants are expecting gift card sales in this holiday season to top 17 billion dollars. The main thrust of the AP story was that the sale of gift cards poses problems for merchants in an area not previously considered-- the gift card defers the purchase to some later time, and a significant portion of Christmas 2004 gift cards won't be redeemed until January 2005. In other words, the poor merchants won't know how good or bad this holiday selling season was, for up to a month after the event. <img src="http://www.stengazette.org/bbgc.jpg" align=left alt="card disp" />The article also implied that merchants can have inventory problems because their built-up stock levels are not being depleted before Christmas as expected. The article was accompanied by a photo of an elaborate display of gift cards at Best Buy. These are store cards that are done up as a merchandise item-- all you have to do is select the value you want and take it to the cash register. Or order it on line. SG wonders whether merchants are beginning to hint at problems with gift cards in order to distract us from the unearned profits that they reap. Or perhaps the banks behind the "universal" cards are trying to put pressure on the "store" card merchants. It reminds us of the banks and credit card companies justifying their high interest rates on the grounds that they make nothing of you pay your bill on time-- completely ignoring the fact that they have already ripped off 3-5% of the gross purchase price from the merchant! Yeah, the poor gift card merchant is doing you a big favor, making a huge sacrifice, just so you can avoid having to actually buy a gift. In the case of the pre-printed store cards, the merchants must have had a good idea of how many they would sell, and the implications for inventory. And besides, they've already got the money! Follow-up
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Hot off the AP wire, merchants are expecting gift card sales in this holiday season to top 17 billion dollars. The main thrust of the AP story was that the sale of gift cards poses problems for merchants in an area not previously considered– the gift card defers the purchase to some later time, and a significant portion of Christmas 2004 gift cards won’t be redeemed until January 2005. In other words, the poor merchants won’t know how good or bad this holiday selling season was, for up to a month after the event.

card dispThe article also implied that merchants can have inventory problems because their built-up stock levels are not being depleted before Christmas as expected. The article was accompanied by a photo of an elaborate display of gift cards at Best Buy. These are store cards that are done up as a merchandise item– all you have to do is select the value you want and take it to the cash register. Or order it on line.

SG wonders whether merchants are beginning to hint at problems with gift cards in order to distract us from the unearned profits that they reap. Or perhaps the banks behind the “universal” cards are trying to put pressure on the “store” card merchants. It reminds us of the banks and credit card companies justifying their high interest rates on the grounds that they make nothing of you pay your bill on time– completely ignoring the fact that they have already ripped off 3-5% of the gross purchase price from the merchant!

Yeah, the poor gift card merchant is doing you a big favor, making a huge sacrifice, just so you can avoid having to actually buy a gift. In the case of the pre-printed store cards, the merchants must have had a good idea of how many they would sell, and the implications for inventory. And besides, they’ve already got the money!

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