Good News For Gift Card Buyers

Posted on 18. Dec, 2006 by in Saving & Investing

apple_giftcard.pngThat’s right – if you’re one of the millions who will give up trying to find that extra-special gift and buy a gift card instead, some retailers are not going to try and steal your money!

I have been very critical of gift cards ever since retailers began thinking that they weren’t getting enough money from your gift card purchase. Not content to take your $20 for a $20 gift card, many retailers began to add expiration dates or even charge monthly “upkeep fees” which quickly drains your $20 card to $0 within just a few months. Basically, retailers are punishing your friends and family for not using the card right away… which is not fair in my mind. And why do retailers do this? I can’t say for sure, but one reason might be accounting. According to GAAP (Generally Accepted Accounting Principles), retailers aren’t able to recognize the revenue for gift cards until they are used to purchase merchandise. So when consumers spend almost $25 billion this Christmas on gift cards, much of that revenue won’t be able to be recognized until next year… which leaves each company with a liability on their books.

However, SmartMoney is reporting that some companies are embracing the Christmas spirit and actually giving you extras when you purchase a gift card. For example, some companies (L.L. Bean, Outback, and others) are offering you a $10 gift card when you purchase $50 for someone else. And according to Dan Horne, a marketing professor at Providence College known as the “Gift Card Guru,” some retailers are offering bonuses after the holiday season to encourage all those gift card holders to spend that cash.

Here’s a list of some of the perks that are being offered this year for gift card buyers and receivers:

Perks for the Gift Card Recipient:

  • American Express: When you activate your gift card, you get access to print-out coupons that can be used in conjunction with your card. Available coupons vary by card — the Especially for Kids card offers $5 off a purchase of $30 or more at KB Toys, while the Especially for Movie Lovers includes a “rent two, get one free” deal at Blockbuster.
  • New York & Company: Each gift card comes with an additional card that entitles the bearer to 15% off her purchase when the gift card is used by Jan. 28.
  • Tanger Outlet Centers: Each gift card comes with a voucher for a free coupon booklet (value: $5), which includes coupons such as 15% off at Polo Ralph Lauren.
  • West Marine: Redeem your gift card between Dec. 26 and 30, and 15% will be added to the card’s value (i.e., a $100 card will have $115.)

Perks for the Gift Card Recipient:

  • Blockbuster: Get a free $5 gift card when you purchase $50 in gift cards.
  • The Children’s Place: Get a free $10 gift coupon with every $50 gift card purchase.
  • Discover Card: When you purchase a gift card with the “Cocoa” design, 5% of the value of your purchase will be donated to the Make-A-Wish Foundation.
  • DSW: When you purchase a $50 gift card, get a free $10 gift card for use Jan. 14 through Feb. 3.
  • L.L. Bean: Get a free $10 gift card with every $50 gift card you purchase.
  • Spiegel: Get a free $25 gift card when you purchase $100 in gift cards.
  • Target: Get a free $10 e-gift card with every $50 gift card you purchase.
  • T.G.I. Friday’s: Get a free $5 gift card with every $25 gift card you purchase. (Other restaurants running similar promotions include Bennigan’s, Chili’s, Macaroni Grill, Pizzeria Uno and Ruby Tuesday’s.)

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  1. University Update - December 18, 2006

    Good News For Gift Card Buyers…

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