Forums: Discussions for entrepreneurs and small business.

Nothing will change, they will simply be more convenient. It`s a perfect example of "what goes around - comes around".

The incentive is:  They get to keep selling gift cards.  Retailers will not allow such a program to last, i.e., they will implement a program that allows ALL gift cards to be redeemed anywhere, via a cooperative database". There will be no opportunity for any ONE service/clearinghouse. Which is what you are proposing.

Don`t forget gift-cards are debit-cards with a gesture that says: "I know what you like". (just like a greeting card is a gesture). Therefore, people will always buy them. The only difference is (in the beginning), people will only buy those that participate (in this proposed service). Once ALL VENDORS participate in a universal program  - ALL IS EQUALL AGAIN!  With the exception of a more versatile "gift-card". There will be no downside for any issuer. Because they will all be honoring each others cards - "what goes around....comes around".

The New cards (program) will render all gifts cards to be mere advertisement & gesture...all is well. Which is really all they EVER WERE! An inconvenient draw/advertisement.  Remember, all banks offer "pre-paid" debit cards to be used for gifts. The gift-card  issuers;  however,  will not allow themselves to be considered INCONVENIENT as a result of this proposed (specialized) service. Not for long anyway.

Therefore, no such "service alone" can survive for long. All card issuers will (eventually) render their cards transferable to all retail outlets. This would make them more convenient (useful) than any one website/service does. All is equalized in short order. A fancy debit-card with  brand/store advertisement.

 

Great topic Rich, Karel is definitely thinking here!

I was struggling with a very similar issue a few months ago when developing the logistics for SuperGreenBeans®. I have developed some solutions that I think can help here.

GreenBeans Rewards® are earned in a specific store and are only redeemable back in the store they were earned, but SuperGreenBeans Rewards® act like cash, and can be redeemed anywhere GB`s are accepted, and are stored on the same card as GreenBeans Rewards®.  More importantly, consumers can add value to these cards, as gift cards, and give them to friends, family, charity, etc.

Here are the 3 most important reasons, as I have learned that merchants choose to issue gift cards:

1. cash-in-hand (money up front for a future sale), with stored value

2. Increased likelihood of the recipient (potentially new customer) visiting their store to spend their card

3. Slippage - percentage of gift cards that are unused, but the merchant has already been paid for (this is one of the BIGGEST perks as it 100% pure profit)

When I first proposed this "universal" currency of SGB’s on the GB`s card to prospective merchants, it was not so well received, as it essentially dissolves many of the benefits associated with gift cards.

Basically, good for the consumer, bad for the merchant. How to fix?

My solutions for the merchant:

Cash-in-hand: customer pays the merchant when they add value ( SGB’s) to the GreenBeans Rewards® card, value is stored, and merchant is not responsible for value until the SGB’s are spent (redeemed). Challenge 1: Done!

Increased likelihood of the recipient (potentially new customer) visiting their store to redeem/spend the gift card: Since the gift card value ( SGB’s) are universal, there is no guarantee that the recipient will return to shop in the store that issued them. So, in order to better secure return business, an equal number of GB’s can issued and/or a store promotion (get 25% off your next order here, etc) to the card when the SGB’s are loaded. In example: When $25 (gift card) in SuperGreenBeans® Rewards is purchased (or value is added), 25 GreenBeans® and or/promotional offer (which can only be redeemed at the store they were issued) are added to the card. Not only does this increase the likelihood of the recipient to return to the store to redeem their GreenBeans, but, when/if the recipient chooses to activate these “points” or GreenBeans, they must register, offering the merchant insight and direct marketing capability, should the customer opt-in.  Challenge 2: Viola!

Slippage: As SuperGreenBeans® are not “called-in” until they are spent, the opportunity for slippage still exists, albeit at a lower percentage, as the consumer has more options to spend their SuperGreenBeans®, but now a NEW opportunity exists: having a customer come into your store to spend their SuperGreenBeans® that they received at another location because they can see (BIG SIGN) that you accept GreenBeans Rewards®.  Now the sale has cost you nothing, you are reimbursed for the redemption, and you have a brand new customer that has just earned GB’s for shopping in your store and they will be likely to return to spend them. Challenge 3: Tada!

There is another issue in regard to the branding, the gift cards acting as mini billboards for the company, and I am working on creating co-branded cards to address this issue.  Having the store that the customer signed up in as their “home store”, with the store branded on the card will provide and extra reminder for the customer.

For the consumer: Get “cash” on the card without actually having to add your own money:

1. SGB`s issued for recycling: when a consumer recycles a phone, battery or inkjet cartridge (puts it in a box at the store), the merchant issues SGB`s (cash value, universally usable) the amount is at their own discretion, then the merchant is reimbursed by GreenBeans® Rewards for the value of the recycled product. In this instance, the value of the SGB’s or “cash value” is sponsored by GreenBeans Rewards®, NOT at the merchant’s expense.

2. SGB’s issued by manufacturers: manufacturer’s sponsor SGB “coupons”, very similar to regular manufacturer’s coupons, which are redeemed at the point of sale for SGB’s. The merchant is then reimbursed by GreenBeans Rewards® for the value of the “coupon”. In this instance, the value of the SGB’s is sponsored by the manufacturer, NOT at the merchant’s expense.

So how does all of this apply to Rich posting? I think it would be easy, as all the systems are in place, to take the SGB’s method and apply it here:

Just as merchants attach GB’s to a SGB’s gift value, they could do the same thing for conversion:

I have 3 gift cards:

$2.34 at Mary’s Fine Clothing à converts to $2.34 in SGB’s (redeemable anywhere GB’s are accepted) , 2 GB’s and/or promotion (redeemable only back in Mary’s)

$23.50 at Baby Grows Up à converts to $23.50 in SGB’s , 24 GB’s and or/promotion

$14.01 at Fix ‘er Up à converts to $14.01 SGB’s, 14 GB’s and/or promotion

So now I have $39.85 that I can spend at any participating store, HOORAY!

So how to simplify the explanation…HELP!

What are you folks thinking?

Rumpelstiltskin

 What goes around may  come around..... 

But not equally..   It is true every business will realize sales  from these cards that were not purchased from their  business,  and  that they will not realize  some of the sales  from the cards  that were purchased  from their business......But There is no way possible it is going to be equal.  Some businesses will realize more than that what was purchased from them and others will realize less. 

This is a fact.  What percentage  I would only be able to guess.

I do not know of one business  person would participate  within a program if they felt that they would loose more than they gained  from the other businesses.  

If there is a one  within this community, I would like to hear  from you and why you don`t like the sales that you were able to potentially generate.

Now if Iwere able to realize additional benefits that would out weigh  the loss in sales,  ie. Greanbeans rewards program, I may participate.

 

Beautiful....

I do like acouple of things you have mentioned, but I havent  put any think time into it yet to seriously  review  its potential  and....it almost looks  like that what you have been working on  is the same  as  this threads subject matter.  really  close.

 

Here`s your solution! In Florida everyday there are thousands of 2 & 3 Day Passes to various amusement parks available. Most go unused and get trashed but many end up at resellers. The key is to get enough card value to purchase what you want or need. Otherwise it is not doable. Gift cards are designed to help retailers not avg. Joe

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Leonard Campbell
Dir. Business Development
leonard.campbell@gmail.com

Short and sweet.  I think that was one of the messages I was trying to give. 

 I would like to add,  if done properly it is workable. have I said that before???

Mike

All I was saying ( in a convoluted way)  is that "IF" such a proposed service were to gain ground (popularity), "retailers" will pull the rug out from under it. It is my feeling that they (retailers) will not want to be considered "inconvenient" . And , as a result, they will revert to minimizing/rendering "gift cards" to a mere advertising method/object. I.e., a "debit card with a FACE!"

A Better Idea? Why not create a company that sells UNIVERSALLY ACCEPTED "debits cads" with retail advertisements on them. The revenue would be created through "advertising fees" (say 10 cents/card). This would kill two birds with one stone.  As I`ve said, this is the only reason why "consumers"  buy them in the first place (see: greeting cards/gesture).

Heck! Why not just sell greeting cards with  "built-in-cash"!(credit) Open the new "greeting-card" and wala! $10.00`s of spending convenience? It`s the same principle - no?

Rich and Jeff,

Thanks for posting my idea.  Hopefully, if nothing else, it will encourage everyone to think creatively.

My idea is specifically related to AMEX, VISA, and Mastercard pre-paid gift cards; not to retail store gift cards.  So I don`t think the retailer of the card would prevent any company from accessing the funds.

My idea is to ask card holders to give their card numbers to "the company" and then the company gathers the funds and passes the credit onto a group of vendors.   Or essentially, "Hey Mr. Concierge, I have many forms of payments, but none of them are worth very much.  Can you help me spend the money?".

You would be surprised how hard it is to spend exactly $100.  Unless you buy something valued at more than $100.  But I suspect most people who get gift cards or who buy gift cards only spend less than the value of the gift card.  So what do they do with the left-over $2.35 or $1.99 or whatever amount?.

Do you know how difficult it is to find a retailer who accepts multiple forms of payment?  Especially many forms of payment.  At one time, I had about 12 pre-paid cards that had balances for about $5.00 each.  The card balances started to expire and I lost money.  That`s why I think there needs to be a way to consolidate the pre-paid balances into one form of payment and spend it online.  This isn`t a "Business" idea.  It is a business product idea.  This idea would work best for someone who already has an online business.

 

 

 

 

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Change creates Opportunity Opportunity creates Risk and Reward But, Who creates Change?

product ideas are business ideas,,, aren`t they??

I know for a fact that Office depot takes different forms of payment, I didn`t know that was a problem.

I have been sitting here for acouple of minutes  trying to figure out what the problem is.  and it just hit me  .  Your right, if a merchant doesn`t allow different forms of payment ( which I didn`t know existed)  and you have 100$ card you would have a small amount left over all the time,    NOW I SEE THE PROBLEM. 

The solution is very easy, like you said,  have a merchant  accept  the cards as payment and give some credit in return  or  donate it  or any other number  of options.

what businesses do not accept  multiple forms of payment???

 

Mike

My sister works for a national retailer and she has told me that their cashiers are not supposed to accept multiple forms of payment, unless it is cash and one credit/debit card.  The reason is that accepting multiple credit cards increases the company`s expenses and decreases cashier efficiency. (Efficiency vs customer service; it`s a delicate balance).  Hmmm, I suppose I could go use a self service check out and maybe the computer wouldn`t fuss so much as the people).

In my experience, when I`ve tried to use an AMEX gift card at a brick & mortar store, I had to tell the cashier how to input the gift card information into the cash register.  (FYI, it is entered just like a credit card).

Still though, I think it would be easier to just go online, enter my gift card numbers into a web page, have the web site determine the balances on the gift cards and debit the cards for those balances, then sum the balances into an temporary account, and then allow me to pick a vendor where I can spend the account value (minus a 5% fee).

The problem with this idea is the marketing.  That is why I don`t think this idea is sufficient to form a business.  But, if your business sells the gift card, then this is a good back door idea to add to your suite of services.

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Change creates Opportunity Opportunity creates Risk and Reward But, Who creates Change?