Advertising Age writes that Consumer Reports has identified a new target, and is taking out ads to alert shoppers to what it sees as a real issue – the fact that “more than one in four recipients of gift cards last season failed to redeem them a year later. And that created a financial windfall for retailers across the country.” This, according to Tod Marks, a senior editor at Consumer Reports, is “like flushing $8 billion down the toilet.”
And, Ad Age writes, “It's not the first time the publication has taken on a practice it believes to be detrimental to the public. Last year, the magazine ran a similar campaign cautioning buyers against purchasing extended warranties. It's perhaps one reason why the publication's latest survey found that fewer respondents -- 42% to 37% -- intend to buy one this season compared to last year.
“But the magazine may have a bigger fight on its hands this season. Once regarded as an option for the lazy, inconsiderate or time-starved, gift cards are expected to reach $100 billion in sales this season. In fact, according to a recent study by Deloitte, gift cards have become the most popular item swapped over the last four years, with 69% of respondents intending to purchase one this year. Shoppers are embracing them more, too, with only 19% of the Deloitte study believing that they're ‘too impersonal,’ down from 22% last year.”
While Consumer Reports concedes that gift cards are a convenient option, it also notes that they often come with strings attached – expiration dates and activation fees, for example – that reduce their desirability. And, the magazine reports that “shopper behavior may not match their professed enthusiasm for gift cards. For instance, of the 27% who didn't redeem the full value of their cards last season, nearly a third indicated they ‘forgot about it’ while 35% said they ‘have not found anything’ they wanted to buy. In addition, nearly six in 10 indicated they simply didn't have the time to redeem the card.”
And, Ad Age writes, “It's not the first time the publication has taken on a practice it believes to be detrimental to the public. Last year, the magazine ran a similar campaign cautioning buyers against purchasing extended warranties. It's perhaps one reason why the publication's latest survey found that fewer respondents -- 42% to 37% -- intend to buy one this season compared to last year.
“But the magazine may have a bigger fight on its hands this season. Once regarded as an option for the lazy, inconsiderate or time-starved, gift cards are expected to reach $100 billion in sales this season. In fact, according to a recent study by Deloitte, gift cards have become the most popular item swapped over the last four years, with 69% of respondents intending to purchase one this year. Shoppers are embracing them more, too, with only 19% of the Deloitte study believing that they're ‘too impersonal,’ down from 22% last year.”
While Consumer Reports concedes that gift cards are a convenient option, it also notes that they often come with strings attached – expiration dates and activation fees, for example – that reduce their desirability. And, the magazine reports that “shopper behavior may not match their professed enthusiasm for gift cards. For instance, of the 27% who didn't redeem the full value of their cards last season, nearly a third indicated they ‘forgot about it’ while 35% said they ‘have not found anything’ they wanted to buy. In addition, nearly six in 10 indicated they simply didn't have the time to redeem the card.”
- KC's View:
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This seemed like a relevant story to report, since so many retailers seem to have a plethora of such cards for sale somewhere near their front ends. (Don't get me started on which it is a bad idea for supermarkets to be selling gift cards to The Olive Garden and Dunkin’ Donuts…)
We all, I suspect, have had the experience of finding old gift cards in a pocket or drawer…and often find ourselves wondering if they still are any good, or if there is any money left on them. Now that would be a useful gift card – one that actually showed remaining value. (That can't be an impossible technology, can it?) As for expiration dates and activation fees – well, those are just a joke designed to take advantage of the consumer.
