vpFREE2 Forums

Nevada law regarding gift cards/certificates...

#1

Gift cards are generally purchased with an amount of money equal to the face
value of the card. The seller then gets use of that money (and presumably
earns interest) until the point at which the gift card is redeemed. When the
card is redeemed, the seller of the card makes their profit on whatever the
card was used to purchase. It is a win-win for the seller. The seller makes
their profit on the good or service ultimately purchased AND gets use of the
money ahead of that pruchase. To add to that win-win by stealing the balance
with some Chamber-of-Commerce endorsed thievery in the guise of "accounting"
simply because the card holder took longer than a year to redeem it is
obscene. That fact is recognized in states where that thievery is rightfully
illegal.

In a message dated 11/20/2005 1:01:45 PM Pacific Standard Time,
harry.porter@verizon.net writes:

But most expiration policies aren't an attempt to screw the customer
-- they're accounting driven and there's ample time to redeem the cards.

[Non-text portions of this message have been removed]

#2

gift cards/ certificates are not a huge windfall for the businesses
that sell them. They ARE a great way to increase sales and provide
customers with a service that they want, but the interest earned on
the account payable is negligible, as it is rarely going to be that
much or for that long.

I agree that one year is less time than should be given, but how long
a time period should it be?

Also note that some gift cards (like VISA) can have exorbitant fees
for checking the balance, etc.

···

On 11/20/05, ezfromnwon@aol.com <ezfromnwon@aol.com> wrote:

Gift cards are generally purchased with an amount of money equal to the face
value of the card. The seller then gets use of that money (and presumably
earns interest) until the point at which the gift card is redeemed. When the
card is redeemed, the seller of the card makes their profit on whatever the
card was used to purchase. It is a win-win for the seller. The seller makes
their profit on the good or service ultimately purchased AND gets use of the
money ahead of that pruchase. To add to that win-win by stealing the balance
with some Chamber-of-Commerce endorsed thievery in the guise of "accounting"
simply because the card holder took longer than a year to redeem it is
obscene. That fact is recognized in states where that thievery is rightfully
illegal.

In a message dated 11/20/2005 1:01:45 PM Pacific Standard Time,
harry.porter@verizon.net writes:

But most expiration policies aren't an attempt to screw the customer
-- they're accounting driven and there's ample time to redeem the cards.

#3

Sorry, but the facts suggest otherwise.
   
  During the 2004 holiday season, retail analysts estimated that gift cards accounted for at least $17.25 billion and 8%-11% of total holiday sales. Any way you slice it, this is a huge business and getting larger every year. Industry forecasts are that the gift card business will reach $75.88 billion by 2009.
   
  40% of the people who receive gift cards use them within the first month of receipt, and only 4% of gift card recipients keep the cards for a year or more without using them.
   
  4% of $17.25 billion is $690 million - hardly a number to be sneezed at. If you assume that the $690 million is invested at 5%, there's a windfall of $34.5 million for the companies that issue gift cards.
   
  The companies that (collectively) earned this $34.5 million earned the money without having to purchase inventory, staff significant operations or take significant risk. Additionally, since I did not look at interest earned by the 76% of gift cards that were used between months 2 and 12. I'm sure that they represent an additional -- and even larger windfall.
   
  Put differently, if you don't think that there's a real business in gift cards, you only have to look at the success of American Express. A gift card is nothing more than a travelers' cheque (that's limited in use). American Express made (and makes) a fortune on float. Remember the ad campaign that suggested you keep leftover travelers' cheques for emergencies? This was done to build out cheque cashing time frames and increase profitability -- and it worked.
   
  How would you feel if your travelers' cheques were charged a monthly "service fee" for each month that you lent American Express your money interest free? I'm guessing that you would be angry.
   
  Lainie
   
  –

···

LHOOQ <fieldcommand@gmail.com> wrote:
  gift cards/ certificates are not a huge windfall for the businesses that sell them. They ARE a great way to increase sales and provide customers with a service that they want, but the interest earned on the account payable is negligible, as it is rarely going to be that
much or for that long.
   
---------------------------------
Yahoo! FareChase - Search multiple travel sites in one click.

[Non-text portions of this message have been removed]

#4

I had a typo -- it's 56% of gift cards that are used between months
2 and 12, not 76%. Sorry about that. (I guess the coffee hadn't
gotten to my fingers yet...) Lainie

--- In vpFREE@yahoogroups.com, Lainie Wolf <lainiewolf702@y...>
wrote:

Sorry, but the facts suggest otherwise.
   
  During the 2004 holiday season, retail analysts estimated that

gift cards accounted for at least $17.25 billion and 8%-11% of total
holiday sales. Any way you slice it, this is a huge business and
getting larger every year. Industry forecasts are that the gift
card business will reach $75.88 billion by 2009.

   
  40% of the people who receive gift cards use them within the

first month of receipt, and only 4% of gift card recipients keep the
cards for a year or more without using them.

   
  4% of $17.25 billion is $690 million - hardly a number to be

sneezed at. If you assume that the $690 million is invested at 5%,
there's a windfall of $34.5 million for the companies that issue
gift cards.

   
  The companies that (collectively) earned this $34.5 million

earned the money without having to purchase inventory, staff
significant operations or take significant risk. Additionally,
since I did not look at interest earned by the 76% of gift cards
that were used between months 2 and 12. I'm sure that they
represent an additional -- and even larger windfall.

   
  Put differently, if you don't think that there's a real business

in gift cards, you only have to look at the success of American
Express. A gift card is nothing more than a travelers' cheque
(that's limited in use). American Express made (and makes) a
fortune on float. Remember the ad campaign that suggested you keep
leftover travelers' cheques for emergencies? This was done to build
out cheque cashing time frames and increase profitability -- and it
worked.

   
  How would you feel if your travelers' cheques were charged a

monthly "service fee" for each month that you lent American Express
your money interest free? I'm guessing that you would be angry.

   
  Lainie
   
  –
LHOOQ <fieldcommand@g...> wrote:
  gift cards/ certificates are not a huge windfall for the

businesses that sell them. They ARE a great way to increase sales
and provide customers with a service that they want, but the
interest earned on the account payable is negligible, as it is
rarely going to be that

···

much or for that long.
   
---------------------------------
Yahoo! FareChase - Search multiple travel sites in one click.

[Non-text portions of this message have been removed]