Quote :

"As for gift cards — well, let’s just say there is good reason that they are known within the retail industry as a stored-value product: they store their value very well, and often permanently. The financial-services research firm TowerGroup estimates that of the $80 billion spent on gift cards in 2006, roughly $8 billion will never be redeemed — “a bigger impact on consumers,” Tower notes, “than the combined total of both debit- and credit-card fraud.” A survey by Marketing Workshop Inc. found that only 30 percent of recipients use a gift card within a month of receiving it, while Consumer Reports estimates that 19 percent of the people who received a gift card in 2005 never used it. Considering that two-thirds of all holiday shoppers in 2006 planned to give someone else a gift card, you most likely received one yourself in recent weeks. Perhaps you are among the exceptional minority, and you have already spent it, or soon will. But the odds say that it has instead wound up in your sock drawer. "

http://www.nytimes.com/2007/01/07/magazine/07wwln_freak.t.html?ex=1325826000&en=970953e6241456e4&ei=5088&partner=rssnyt&emc=rss

So I guess we should put more effort into our gift-giving. Anyone have unused gift cards? I usually make it a point to use mine pretty soon.

1/8/2007 11:53:41 AM

ooo that reminds me, I have a victoria's secret gift card to use! thanks

1/8/2007 11:55:43 AM

well it's either unused gift cards or crappy gifts that go to goodwill...

I use the gift cards to places I like pretty quickly, but some stores are not accessible easily or I have no desire to shop there.

The fees are pretty bad sometimes too, especially for restuarants.

I had one for longhorn steakhouse that expired, since I don't even know where one is. And I have multiple Walmart GC's that I haven't used b/c I never go there, but those don't expire.

1/8/2007 12:01:12 PM

that's why gift cards are such a good idea for companies. Not only do they essentially get to use people's money for free, they are given money when people don't use the cards.

1/8/2007 12:04:54 PM

^ Depends on how the company does the gift cards. Until the card is redeemed the gift card is a liability not an asset. Sure they have your money, but you don't have a product. They owe you a product. That's why so many places have cards that expire or charge a fee after so long, to reduce their liability.

1/8/2007 1:26:08 PM

Quote :

"Until the card is redeemed the gift card is a liability not an asset."

I'm saying that during the period you have a card from company x and are not using it, the company already has your money to do with what they wish.....it's like an interest free loan.

1/8/2007 1:48:26 PM

Quote :

"I had one for longhorn steakhouse that expired, since I don't even know where one is"

They just built one off of Highway 64 in Apex. There is also one in Durham I think. We got a gift card to there for Christmas, pretty good.

1/8/2007 1:57:43 PM

Gift cards that expire should be fucking illegal. What justification do they have for this practice?

1/8/2007 2:14:22 PM

There is a longhorn at Brier Creek.

1/8/2007 2:14:57 PM

A lot of them don't expire, but they have "maintenance fees."

It's ridiculous.

1/8/2007 2:36:27 PM

i have several that are from christmas 2005 that i haven't used

1/8/2007 2:37:12 PM

Quote :

"Gift cards that expire should be fucking illegal. What justification do they have for this practice?"

We put a year on ours, if you cant use it within a year then shame on you. Thats 365 days to use free money.

1/8/2007 2:41:08 PM

^If someone get a Sears gift card for Christmas, and they decide they want a new washing machine, they should be able to use that card whenever they've saved up enough cash and picked out a washer.

[Edited on January 8, 2007 at 2:51 PM. Reason : sss]

1/8/2007 2:51:25 PM

Gift cards are like mana from heaven for stores/companies. If you don't use it, they get free money. If you use it, they get your business plus any extra that you might spend while at their store. Spend less than the amount on the gift card and they pocket the difference. Spend more and they gain your business. Like noted above, some companies even go as far as to charge you fees for not using the gift card. Even worse, some companies give out expirable gift cards.

I don't see how it's anything close to a liability. When they sell the gift card, they basically already sold the product. They don't "owe" you anything. It's already been purchased. All you have to do is pick it up from their store. If you don't pick it up, they get to sell the product to another customer.

Minimal maintenance that nets a good amount of profit. It's probably the best thing since sliced bread for companies.

1/8/2007 2:57:59 PM

I got a whole bunch of gift cards this Christmas to Home Depot - everyone I know knows that I like to work on my house. What was funny is that no one gave me one to Lowes - all five gift cards I got were Home Depot which seemed weird since they are one and the same to me and most other people. IMO I actually like Lowe's better (especially for outdoor stuff like plants, trees, and yard equipment).

Anyway I will definitely be using my cards, but I will take my time and make sure I'm using them on something I need and not just using them to make sure I've spent my gifts

[Edited on January 8, 2007 at 4:19 PM. Reason : sure]

1/8/2007 4:18:29 PM

Quote :

"I don't see how it's anything close to a liability. When they sell the gift card, they basically already sold the product. "

My guess is it varies from company to company as to how they record it. Any accountants on here that can provide clarification to this issue?

And maybe I'm being naive here, but is the idea of "re-gifting" still viewed as a bad thing? I can't count the number of gift cards I've turned over for upcoming birthdays and the like.

1/8/2007 8:15:14 PM

You can regift the hell out of some gift cards, unless you gotta use white out

1/8/2007 9:25:37 PM

I'd rather regift a giftcard. No one's going to recognize the $15 blue Best Buy card they gave you.

1/8/2007 9:32:49 PM

Quote :

"My guess is it varies from company to company as to how they record it. Any accountants on here that can provide clarification to this issue? "

Does it matter how they record it??? Once they got your money, they got your money. Right?

It's not like they have to give the money back to you if you don't spend it. So, whether they record it now or later (in their budget or out of their budget), the end result is that they have the money. And that means easy profit. Heck, they don't even need to spend on any extra advertising or marketing.

Unless I'm missing some key concept/ingredient...

1/8/2007 10:21:31 PM

they get the cash from selling the gift cards but they won't record any revenue from that sale until the gift card is redeemed for merchandise/services or it expires. if it doesn't expire and never redeemed, they could recognize the revenue based on an estimate of cards that will not be redeemed. then they no longer have a liability of unearned revenue.

Quote :

"varies"

[Edited on January 8, 2007 at 10:51 PM. Reason : 8]

1/8/2007 10:30:20 PM

nm

[Edited on January 8, 2007 at 10:38 PM. Reason : .]

1/8/2007 10:36:01 PM

I bet there are just as many unused GIFTS

1/8/2007 11:41:30 PM

Quote :

"Does it matter how they record it??? Once they got your money, they got your money. Right? It's not like they have to give the money back to you if you don't spend it. So, whether they record it now or later (in their budget or out of their budget), the end result is that they have the money. And that means easy profit. Heck, they don't even need to spend on any extra advertising or marketing. Unless I'm missing some key concept/ingredient..."

a key concept like what a liability is in accounting terms or the matching prinicple.

[Edited on January 9, 2007 at 12:21 AM. Reason : you are right, but so was he/she when they said it still is a liability until written off or used]

1/9/2007 12:21:13 AM

i got a Krispy Kreme card from my little bro, who knows I don't eat junk food. He thought it would be funny. Funny enough to waste money?

Fuck if i'm going to use it.

1/9/2007 12:24:21 AM

Yes it matters how they record it.

Go read up on sarbanes-oxley.

They cannot recognize the revenue for the sale of the card until it is redeemed, and must remain as a liability on thier books until then.

1/9/2007 7:54:33 AM

Ahhhhh... I see... Also, things cleared up a bit after reading this article:

http://world.std.com/~swmcd/steven/stories/gift.html

You can always count on google.

[Edited on January 9, 2007 at 2:52 PM. Reason : I still think it's stupid... but oh well. Just remember to use your gift cards.]

1/9/2007 2:51:22 PM

while it may not be considered revenue, the company still has the consumers capital to invest interest free.

^That article said some states have outlawed gift cards???

1/9/2007 3:14:01 PM

1. These sentences do not make sense:

Quote :

"Perhaps you are among the exceptional minority, and you have already spent it, or soon will. But the odds say that it has instead wound up in your sock drawer."

If 90% of gift cards get used, then odds are it won't wind up in your sock drawer.

2. I read an article this week that said gift cards were more valuable to retailers when gc's bring in new, potentially loyal customers, rather than when the gc goes unspent.

3. There is at least one website where you can trade gc's with other people or buy and sell them.

4. This is not always true:

Quote :

"Spend less than the amount on the gift card and they pocket the difference."

When I worked at Old Navy, if there was a $5 or less difference on your gc after you used it, we would just give you cash for it.

1/9/2007 3:15:18 PM

^I hadn't thought about number two. That makes a lot of sense.

1/9/2007 4:24:00 PM

I use 100% of the gift cards I get. I love gift cards. If someone gives me money then I always do the responsible thing and just put it in my savings account. With gift cards its like you HAVE to go shopping. I love it. The gift of shopping. <3

1/9/2007 4:29:08 PM

Quote :

"If someone gives me money then I always do the responsible thing and just put it in my savings account."

me too

1/9/2007 4:42:21 PM

^^^In regards to number one:

Quote :

"A survey by Marketing Workshop Inc. found that only 30 percent of recipients use a gift card within a month of receiving it, while Consumer Reports estimates that 19 percent of the people who received a gift card in 2005 never used it."

By this statistic most people who received gift cards this christmas have yet to use them.

1/9/2007 4:45:01 PM

^ Ah ha, that makes sense now.

1/9/2007 5:02:31 PM

Quote :

"We put a year on ours, if you cant use it within a year then shame on you. Thats 365 days to use free money."

Free money? You don't charge for gift cards? I'll take one for $1000.

1/9/2007 5:55:27 PM

Quote :

"ooo that reminds me, I have a victoria's secret gift card to use! thanks"

Minkagrl01

Tease.

1/9/2007 11:28:08 PM