What is it with Gift Cards?
With apologies to Jerry Seinfeld for stealing his gripe phrase. 7/25/2019 | Joel Schaffer, MAS, The Take Away
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In my last column, I wrote about how we have engulfed and devoured the premium industry. That’s a good thing. However, the death of that industry and the folding of it into our industry was exponentially precipitated by the birth of the gift card and that’s a bad thing.

I know I am from a distant generation.  Back in the world before everything you know now as the way things are, one would have to go to a retail establishment (those were called stores, frequently seen on Main street, in strip malls along the road, and then in mega malls) and ask for a gift certificate. A piece of paper worth $$$$ that you would pay face value for and use as a gift in the store. Historians can even tell you about US Saving Bonds, where you would pay less than face value but they gained interest until they matured to the face value and you could redeem them in 7 years or so. These were common gifts from Aunt Gladys, as well. I am not saying those were the good old days … just the old days within my scope. During this pre-plastic-scene era, the premium industry flourished. Buyers knew they could get a Panasonic TV for their sales incentive program at amazing prices. They knew $10,000 of retail value merchandise would cost them $6,000. These were astute, albeit primitive buyers.

It is easy to trace and even easier to see, had you ever attended the New York or Chicago Premium Show, the demise of the industry concurrent with the rise of the gift card and internet commerce. Now, buyers can buy at near wholesale prices online. Buyers can switch to a gift card and solve a lot of problems in a split second. All of this means to you is more competition and more confusion as well. Oh, if you did not know it, you can’t resell gift cards and make any money, so don’t post in chat groups, “does anyone know where I can get Visa gift cards cheap?”.

So, you do compete with a Visa gift card, and any other gift card from food, entertainment, etc. They continue to take a significant share of the market away. After attending a conference with wellness professionals, I reconciled myself with “these people” and their reliance on using cash, in the form of a gift card as an incentive and reward. I see it more and more in the safety market and in the holiday market. However, as a commercial plug, if you can’t sell the steak, we do have the sizzle - that’s a customized and personalized gift card that gift card companies won’t provide or print.

Things You Might Not Say To A Person Who Uses Gift Cards:

  1. 1. You are lazy. You are not doing the job you should. You show no personal interest in those who are vital to your business. Instead of getting personal with a gift that is just for he or she, you shove a gift card in their face that says…”here, I did not have the time or I did not care enough about you to pick out something so here is $50, you do it. I couldn’t care less, I am out of here doing other things with my time”.

  2. 2. Obviously, you are not an astute shopper. A $100 gift card gets a dollar for dollar item in return. There are no discounts for you. You allocate $100 and it costs you $100. How can that make sense when I can get you a $100 value for as little as $60-70? Don’t you want more for your budget?

  3. 3. So, you like to toss your money in the trash. Do you have any idea how many of these gift cards expire? You know, people don’t read the fine print and suddenly, well, maybe a year later, they go to use the card and it is “kaput”, not good, zilch, worth nada. So I have to question, whose side are you on in this transaction?

  4. 4. You obviously don’t believe in lasting value. How long has your marriage lasted? When you pick out a specific gift or incentive, the goodwill has lasting value. The recipient will always know where it came from and remember the caring person who gave the gift. Obviously, you couldn’t care less when the gift card is used or even who used it.

  5. 5. Don’t you see, as a premium source, together we can identify some really special gifts and I work with the manufacturers to deliver them a very attractive discount?

  6. 6. Our gift counselors take the extra steps you don’t get. We can often brand a product or personalize it. This is a service you don’t see online or from card companies. We can repackage and personalize distribution. There is so much more to gifts and incentives. We show your recipients how much you care for them … you care, don’t you?

The buyer confusion is also caused by the disruption Amazon has caused in the marketplace. Stick with me as I try to explain. I am in the music business - back in the Pre-millennial Era, that meant a record, then cassette, then a CD. When a buyer wanted 100 Elton John CDs because they had an event with a theme, they would ask their distributor. In turn, that distributor would come to me and I could provide them. The distributor makes money, I make money, we provide value added services such as imprint and packaging and we are done. Not today. The buyer price checks on Amazon and sees that same album at about 25-35% off retail. They then ask their distributor for a better price. They do not take into consideration all the value added, they want that and at the same price as a simple retail package. This is yet another friction point that is leading some buyers to say “screw it”, I’ll just give a gift card for an Amazon or iTunes download and let the recipient do what they want. Okay, so that Elton John song goes into the files and rests there for life. Not a single mention of the event, the giver, or the reason. It’s a whole new world as buyers - in general, they don’t give a damn.

Going back to the theme of my column, “The Take Away”, if you present the advantages of working with you as a premium source and the advantage of personal gift and incentive selections as opposed to the sterility of a gift card, your own value increases in the minds of clients and prospects. However, if you don’t set the table in your early meetings, on your website, and in social media, then, never mind.

Joel D. Schaffer, MAS is CEO and Founder of Soundline, LLC, the pioneering supplier to the promotional products industry of audio products. Joel has 48 years of promotional product industry experience and proudly heralds “I was a distributor.” He has been on the advisory panel of the business and marketing department of St. John’s University in New York and is a frequent speaker at Rutgers Graduate School of Business. He is an industry Advocate and has appeared before the American Bankers Association, American Marketing Association, National Premium Sales Executives, American Booksellers Association and several other major groups. He has been a management consultant to organizations such as The College Board and helped many suppliers enter this industry. He is a frequent contributor to PPB and Counselor magazines. He has facilitated over 200 classes sharing his industry knowledge nationwide. He is known for his cutting humor and enthusiasm in presenting provocative and motivating programs. He is the only person to have received both the Marvin Spike Industry Lifetime Achievement Award (2002) and PPAI’s Distinguished Service Award (2011). He is a past director of PPAI and has chaired several PPAI committees and task forces. He is a past Chair of the SAAGNY Foundation, Past President of SAAGNY and a SAAGNY Hall of Fame member. He was cited by ASI as one of the 50 most influential people in the industry.

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