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August/September 2010

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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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