By Tony DeMasi, editor
he gift card market is starting to crumble. Market watchers predict
that this year consumers will lose more than $75 million
in cards from stores and restaurants that have gone out of business.
One of the casualties of retailers filing for bankruptcy
protection is gift card balances that are zeroed out in the process. This is
bringing a lot of frustration to consumers. Is it possible that you can turn
the customer’s lemon into your own lemonade?
How about offering customers a discount on any full price purchase
in your store equal to 10 percent of the now worthless value of the gift
card? Therefore, if the customer has a $100 card, at least he or she will
get a 10 percent discount from you and you look like the savior of the
day. That shopper will turn into a loyal, repeat customer. Think about
it.
Unless a store is a part of a major, solid chain, such as Target, Macy’s
and Wal-Mart, I think the consumers’ love affair with gift cards is generally
over. Consumers are realizing the hard way that the gift card idea is
stacked against them A company is given money upfront, then tells the
consumer that they have to use it soon or “we’ll just keep the money” -
taking it out in monthly installments until the card is no longer of value.
The company is really hoping the card is lost or misplaced.
Bank issued gift cards are just as bad. Visa Gift Card charges $4 to give
$50 as a gift.
I guarantee you that many customers who thought that giving cash
gifts is “vulgar” and it is “classier” to give gift cards will be thinking twice,
after this. In the meantime, step up to the plate
and offer the holders of worthless cards a chance
at least to have some savings. It will be a publicity
and business boon for you.
While attracting new customers, keep in mind
the old ones, too. A new study shows that consumers
over 70 are generally worth plenty.
Boomer consumers are roaring into their 60s,
defying the stereotypes of aging and providing a
demographic goldmine for marketers.
In brief, today’s Boomers predict that when
they turn 70:
• 74 percent still will not be describing themselves
as old.
• 86 percent will be more practical and pragmatic
in their purchases, and much less concerned
about trendiness and indulgences.
• 76 percent will be using technology to stay
connected with family and friends.
• 93 percent will have more time to do things
like travel, dine out and pursue hobbies.
• 63 percent will be making some kind of
move, but only 9 percent of Boomers now in their
50s or older imagine themselves at 70 still in
search of “the dream home.”
Primary beneficiaries will be responsive companies
who can deliver Boomers pragmatic value
and style.
The study also reveals that the Boomer generation,
which has a reputation for acting from dissatisfaction
with the status quo, now perceive
themselves as being on track to unprecedented
levels of satisfaction, happiness and thankfulness.
A full 75 percent of Boomers anticipate that
“their best years are ahead of them.”
Not all of the generation’s return to their consumer
roots will be driven by a philosophical shift
in ideology, however. The study also shows that
the turn to the pragmatic is highly correlated to
the fact that only 41 percent of Boomers state
they have a secure, financially sound plan for
retirement. Even so, Boomers anticipate that after
paying their basic living expenses, they will have
an average of 22 percent of income left over to
spend on discretionary purchases.
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