STORES - September 2010 - (Page 36)

NUTS AND BOLTS / GIFT CARDS Plastic Fantastic Online gift card exchange helps retailers reclaim lost consumer dollars BY LEN LEWIS t’s a jungle out there, and that’s just fine with Gary Briggs and Bruce Bower. Briggs and Bower are CEO and president, respectively, of Plastic Jungle, a San Jose, Calif.-based exchange where consumers buy, sell, exchange or donate gift cards in an environment that virtually guarantees that what you buy is what you get. I Briggs, a former senior vice president and chief marketing officer with eBay, says one of Plastic Jungle’s primary goals is to help people “realize how much trapped money on a mag stripe is sitting in their houses in the form of unused gift cards.” Gift certificates, gift cards’ paper predecessor, have been a fixture in retailing for nearly a century. Gift cards now represent a $100 billion business in the U.S. alone, and may be among retailing’s most profitable items since they don’t have to be backed up by inventory or other supply chain and marketing costs. Moreover, sales of cards by individual retailers and at a growing number of gift card “malls” represent pre-sold revenue and cash in advance for stores. Perhaps their most endearing feature, though, is that people tend to overspend the face value of the card, and usually purchase highermargin items than they normally would, according to industry studies. “It’s the No. 1 gift category,” says Bower, former head of interna- tional, business and corporate development for the Blackhawk Network, a subsidiary of Safeway Stores and the world’s largest third-party distributor of gift cards. “I don’t see any reason that won’t continue as issuing merchants create new ways to drive loyalty and value for customers.” Bower concedes, however, that there is still the fear of “misgifting” — giving someone a card from a store they don’t shop. “One of the interesting roles we play is taking the fear out,” he says. “Even if a recipient is not a fan of a particular store, we help them get value out of the card.” He notes that “breakage” — unused balances on gift cards — averages 4 to 8 percent industry-wide and could be as high as 15 percent on some cards. “We’ve been forthright with [retailers] about our intentions and how we can work with them on fraud loss issues and in getting these unused balances moving again. Getting people in the store to overspend the gift card is more valuable than ever.” – Gary Briggs, Plastic Jungle 36 STORES / SEPTEMBER 2010

Table of Contents for the Digital Edition of STORES - September 2010

STORES - September 2010
Table of Contents
Editor's Page
President's Page
Retail People
Favorite 50
Retail Showcase
Customer Retention
Social Shopping
Gift Cards
Business Intelligence
Networking & Communications
Customer Centricity
Payments & Credit
Return Fraud
Green Issues
ARTS Update
Point of View
NRF News
Retail Industry Calendar
End Cap

STORES - September 2010