New ways to use gift cards sprout this holiday
By Alistair Barr
(Reuters) - Retailers are coming up with ways to make the gift card - that staple of holiday giving - more exciting to receive, from including a set of Lego blocks to putting images of popular paintings on the plastic cards.
At the same time, some companies are trying to make the cards even more appealing to give, by addressing the fact that recipients rarely use the entire amount stored on them.
More than 80 percent of shoppers plan to buy gift cards this holiday, up from 77.3 percent last year. They are expected to spend an average of $155.43 on cards, the highest amount since 2007 and up from $145.61 last year, according to the National Retail Federation.
Total spending on gift cards should reach $27.8 billion this holiday. Consulting firm TowerGroup has estimated that about 10 percent of the value of gift cards are not used, which would leave almost $3 billion on the table.
Keeping that unused cash in mind, on November 6 Del Currie and Lou Corbo launched Moola Street to offer a different kind of gift card. The purchaser only has to pay 10 percent of the value of the card upfront, but gets to give a card with 10 times that value as a gift. So, for example, a $100 gift card costs $10 upfront.
If the card is not redeemed after three months, the purchaser does not have to pay any more. The full amount is charged only when the recipient logs on to moolastreet.com and converts the gift into cards from retailers and restaurants including Amazon.com (AMZN.O: Quote), Target (TGT.N: Quote), Macy's (M.N: Quote) and Subway. The recipient can trade the Moola Street card for up to three retailer or restaurant cards.
"The response so far has been good," said Moola Street Chief Executive Del Currie. "We have launched it, but haven't started all our promotions too heavily yet. We haven't been going berserk with orders yet, but the traffic to the Website has been good."
Some gift cards have become gifts in their own right, as games, lights, music and the occasional toy come along with the ability to buy what you want. Continued...