Say No to Gift Cards. Just Give ‘em the Cash!

For the past five years or so, purchasing gift cards have been a convenient method of gift giving over the holidays. Especially when children reach that “hard to buy for” stage (otherwise known as the teenage years.) Why screw up? Just purchase a gift card and it’s up to the recipient to spend as he or she wishes. Here’s the problem: what if he or she forgets about or loses the card? The purchase was a total waste and it becomes a donation that isn’t tax deductible. The solution: just give ‘em the cash!

Now, every story has two sides. Before I begin ripping on gift cards, let’s look at the bright side. From a business standpoint, owners would be foolish to not implement a gift card program. Gift cards are cheap to produce, and offering gift cards has been shown to increase sales (people tend to spend more than the value of the cards), increase customer loyalty and perceived customer value. Have you ever purchased a particular item and received a five-dollar gift card as a bonus? It’s obvious that gift cards used as marketing tools can have positive effects on a company’s image and relationship with customers. Financially, getting the money ahead of the purchase improves cash flow. And the cards that go unredeemed? Bonus in the bank! And although the accounting department still views the unused card value as a “liability” and delays the reporting of revenue, the fact remains that after a year has passed, the possibility of redemption is very unlikely and it’s money in the bank.

But we're talking about gift giving here. From a consumer’s point of view, the thought of unredeemed gift cards is bothersome. There’s nothing worse than losing money, in my opinion. And that’s exactly what happens when a gift card recipient forgets or loses his gift card. Even if a recipient doesn’t necessarily lose a card, but simply holds on to it too long, he could face fees or expiration dates that devalue the gift amount, ultimately causing frustration. Although gift card losers (don’t take that personally) remain to be a small percentage of total recipients, it’s still a lot of ching that’s being tossed away. Financial services consultancy, TowerGroup reported that in 2006, gift card volume was at $80 billion and it predicts that amount to exceed $100 billion in 2008. According to experts, about 10% of gift cards are never spent. Let’s do the math; that’s about $8 billion dollars! EIGHT BILLION DOLLARS! (In 2006, Best Buy had about $46 million in unused gift card revenue.)

Cold hard cash, people, always gets redeemed. If you’re not a great shopper (or just hate it) or just don’t know what to get someone, slap a few green backs inside a thoughtful card and I promise you this: ain’t no one gonna complain about gettin’ some dollars.

Resources:
A Gift from Me to You: Cross-Channel Gift Cards, Multichannel Merchant
Accounting for Gift Cards, Journal of Accountancy

Additional Reading:
Billions in Unredeemed Gift Cards!
Roboshop Gift Cards
Marginal Revolution: Seigniorage fact of the day
$25 Billion in Christmas Gift Cards, But Spend it Promptly
The Conglomerate: Abandoned Gift Cards

Hugging In School Must Be Stopped!

Thirteen-year-old, Megan Coulter of Mascoutah Middle School was recently punished with two days detention for giving her friends hugs. According to the student handbook, it states: “Displays of affection should not occur on the school campus at any time. It is in poor taste, reflects poor judgment, and brings discredit to the school and to the persons involved.”

Yes, what has this world come to? Showing love and affection toward friends is certainly unacceptable and inhuman. Hugging friends and family members in public certainly should be considered offensive and would discredit any public education facility and the persons involved. What would the community think if schools started letting friends engage in activities like holding hands or hugging! What a disgrace!

In my opinion, this school policy should be taken a step further; students should be banned from smiling, laughing, joking or showing any display of emotion or affection toward other human beings. Students should walk around the day with absolutely no signs of sensitivity, love, or emotion because that would be more in line with how humans should properly behave. Certainly huggers should serve the same punishment as those students who engage in fighting, teasing, harassing and causing damage to school property. Hugging, fighting—what’s the difference? It’s all just a bunch of offensive, damaging behavior and it must be stopped! Hugging should only occur in the privacy of our own homes under supervised and controlled situations. If schools were to allow such a display of affection, it could only lead to more harmful and offensive behaviors—like kissing and groping. If Mascoutah Middle school allowed hugging, what’s next? Allowing teenagers to have sex in the classroom? It’s about time a school takes action and punishes those who deliberately violate school policy. This eight-grader should have known better. If I were the superintendent, I would have given her a week of detention!

Written in reaction to MSNBC story: Girl, 13, gets detention for hugging two friends
View these other blog reactions:
Dear Mascoutah Middle School
No hugging in school!


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