Present Card

Whereas on-line and retail vacation purchasing gross sales have met or exceeded expectations for many retailers in 2005, there may be one other “rush” for all retailers to arrange for: reward card redemption.

In accordance with Hitwise, a web based intelligence service, the market share of U.S. Web searches containing the phrases “reward card” was up 32% for the week ending December 10, 2005 as in comparison with the earlier week. In truth, the Nationwide Retail Federation expects reward card gross sales to extend 6.6% this vacation season to 18.48 billion {dollars}, with shoppers spending a median of $88 {dollars} on reward playing cards or 15.6% of their vacation purchasing finances.

Present certificates have all the time been a preferred reward alternative for the onerous to please recipient and even for the lazy shopper. For the reward giver, it permits a fast buy at no matter retailer or on-line service provider they choose, with a greenback quantity that matches their finances. For the recipient, they will choose what they need from a selected service provider and for essentially the most half use the cardboard at their comfort.

However for some, giving a present card is a cop-out, reasoning it’s too impersonal and opting at hand choose a present and deciding on one thing particular and distinctive for a cherished one or buddy. Nevertheless, for some, the reward card is the perfect reward alternative, with household or pals even suggesting the shop or on-line service provider they like.

For the retailers, it has prolonged the vacation purchasing season as a result of they can’t document the sale till the recipient makes use of the reward card to make a purchase order. This holds down gross sales figures in November and December, however offers a lift in January when most playing cards are redeemed. A further increase is offered by the truth that a lot of the consumers who redeem their reward playing cards sometimes spend 15% to 50% greater than the face worth of the cardboard after they choose their vacation reward.

There are some downsides to reward playing cards. Some retailers clear unused reward playing cards off the books by subtracting off of the face worth of the cardboard, an inactivity payment (often $2.50 per 30 days) after a sure period of time. Some reward playing cards have an expiration date and others include particular situations or restrictions. Nevertheless, client outrage has prompted many states throughout the nation to introduce laws limiting or banning the charges. Moreover, there is no such thing as a federal legislation on reward playing cards however, two Republican congressmen, Joe Barton of Texas and Charlie Bass of New Hampshire, have requested that the Federal Commerce Fee examine the best way retailers conduct their reward card packages.

Is giving a present card too impersonal? Is it one of the best reward alternative? That query is up for debate and is a private choice. However with annual reward card gross sales projected to succeed in 90 billion {dollars} by 2007 (Ernst & Younger 2005), the reward card is right here to remain.


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