Gift Cards and Spaghetti
Now that the dust has started to settle and we are busy counting up our loot, it's time to figure out what to do with all of our refunds and gift cards. My office is located near a small shopping malll, so I got a bird's eye view of the nuthouse that is Boxing Day.
People were lining up to get into a variety of retail stores. I can imagine many had gift cards in hand. According to Phinjo Gombu in the Toronto Star, it was reported that 82% of large retailers made gift cards available in 2005, compared to 53% in 2003 according to Statistics Canada.
Apparently, the largest growth has been among retailers that were more reluctant in the past to introduce gift cards, especially clothing stores where gift card availability doubled by 79% from 2 years ago.
Why use gift cards? Statistics Canada found that stores issuing gift cards had more than twice the number of sales than stores that didn't offer them. Both Gas stations and grocery stores now issue them. They are quite the rage right now.
Another reason why gift cards are so popular is they can be purchased using points from loyalty or rewards programs and recipients are none the wiser. Apparently some people take offense to that. If I received one it wouldn't matter if it was purchased with dollars, points or Monopoly money.
I used to think all gift cards were created equally. You pay for the value but can replace one brand for another. Best Buy, Home Depot, Body Shop, Starbucks it's all the same isn't it? Not so. One offer that stood out was none other than the Old Spaghetti Factory.
For every $20 gift certificate purchased until December 31, 2006, it will include a bonus $10 Old Spaghetti Factory Gift certificate. You actually receive a discount for making a gift card purchase. With a deal like that, who needs the GAP?
Granted there are terms and conditions such as gift certificates are not valid on the date of purchase and must be used by March 15, 2007. But other than that, it's sounds like a pretty tasty deal. No pun intended. (Unless you don't like spaghetti.)
Cynics might question the economics of such an offer. Yes, there are cost issues as gift cards represent a liability on the balance sheet but the Spaghetti Factory must have crunched the numbers before launching this promotion. If not, better move quick before they figure it out.
The only thing to rain on the gift card parade is Ontario legislation expected to take place in 2007 which eliminates the expiry date on all gift cards. According to surveys, 60% of gift cards offered have expiry dates. Consumers would love such a change. Retailers less so.
Imagine if such legislation extended to loyalty programs such as Aeroplan? They already took a pounding in the news for time-stamping Aeroplan points with expiry dates. Something for the legal pundits to comment on but while they do so I'm heading over to the Spaghetti Factory.
However, before I do so I (belatedly) wish you and your families a Merry Christmas, Eid Mubarak, Happy Hanukah, Festive Kwanza and best wishes for any other holidays I ommited.
May your best of times in 2006, be your worst of times in 2007.
