'Tis the season for … gift cards?
The average American will spend $163 on impersonal plastic presents.
(As seen on WZZM TV 13) Do gift cards suck?
That’s the assumption behind a new campaign from CafePress Inc. aptly titled “Gift Cards Suck.” CafePress, a Louisville, Ky.-based digital retailer of stock and user-customized products, recently launched the campaign calling for consumers to “stop the madness” by not spending money on purchasing gift cards, classifying it as “Gift Card Laziness Syndrome, or GiCLS, which is expected to infect 80 percent of holiday shoppers this year.”
“American consumers are wasting roughly $8 billion annually on holiday shopping, thanks to gift cards. Each year an estimated $1 billion on gift cards go unredeemed, while $5 (billion) to $7 billion on gift cards expire before use or are simply lost. That sucks,” reads the campaign’s website.
“Sales of gift cards rose from $80 billion in 2007 to $118 billion in 2013 (a 48 percent increase). The average American consumer will spend approximately $163 on gift cards this year. The result of this alarming trend could result in $118 billion of mostly wasted spending.”
That money could be used to purchase about 49 St. Louis Cardinals baseball teams, or even 22 space probe landings, said Maheesh Jain, cofounder of CafePress.
“Shoppers need to make a decision. Do they want to tell loved ones, ‘I thought about you for all of 30 seconds as I grabbed this card at the gas station,’ or do they want to delight loved ones with something unique and personalized?” Jain said. “If you don’t know the answer to that, please call me. I’ll help you cheat on the test.”
CafePress may have its own reasons for disliking gift cards, but local retailers and small businesses have other thoughts on the matter. If unredeemed gift cards cause such a major loss of money for customers, then Grand Rapids-based retail titan Meijer offered a simple solution: make gift cards eternally redeemable.
“Meijer is a privately held company so we do not share any of our sales figures. But I can tell you that gift cards continue to be a popular gifting item for our customers, especially since Meijer gift cards never expire,” said Christina Fecher, public relations manager.
Gift cards can also make an impact on the branding of local stores, said Samantha Vanderberg, marketing manager at Grand Rapids-based nonprofit Local First. Purchasing local gift cards is a great way to introduce people to your favorite local business, she said.
“Imagine if, instead of buying gift cards at big box stores and national chains that go to waste, people invested that money in businesses at the local level. That could have a huge positive economic impact in communities like ours,” she said. “Plus, nothing beats the unique experience that people have at local businesses, and you could be giving that to your friends and family this holiday season.”
There is, however, one way in which gift cards can be troublesome for local businesses, Vanderberg said.
“It can be hard for local businesses to compete with gift cards because of the convenience of ordering them online or choosing several from a wall of gift cards at the store,” Vanderberg said.
“But some people don’t realize that many local businesses offer gift cards and gift certificates, as well, whether that is online or in-store. One of the pros of local gift card purchasing is that business owners have the opportunity to connect with new customers.”
One Grand Rapids store that offers gift certificates over gift cards is Global Infusion, 143 Diamond Ave. SE. The store, which describes itself as an “eclectic fair trade marketplace,” features clothing, jewelry, tea, home décor and other items. It was co-founded in 2004 by Joana Hively, who said her store prints its own gift certificates instead of using gift cards.
It’s not that Hively has anything against gift cards, but she doesn’t use them because the initial order for most gift cards is outside of her budget. In addition, many gift cards only offer a generic brand and do not allow for the branding of the business. That’s why she and many other local stores still use paper gift certificates, she said.
“We have a very tight budget, and for us to spend $500, for example, on something we’re not going to get terms on and it’s something we have to pay up front … that’s a huge part of our budget,” she said. “Historically, they’ve just been inaccessible to us. … What’s the point of doing it if it doesn’t have our logo and information?”
Another positive point about gift certificates is they are redeemable over time, she said.
“We keep things simple here. I don’t have a point of sales system that’s tracking everyone coming in and out, but I would say the majority of our gift certificates get redeemed,” she said.
“On ours we write, ‘Kindly use within one year,’ but it doesn’t say it expires in one year because I don’t think it can.”
Gift cards, although expensive, are still something Hively is moving toward. After the holidays, she plans to use some of Global Infusion’s Christmas earnings to order some.
“The company (I’m looking at) is called 'Sustainable Cards' and the minimum order is 500 cards at 30 cents each, plus an initial $250 set-up fee, plus a $150 personalization fee,” she said. “This would include four-color printing and does not include shipping.”