Perhaps someone can tell me the difference between

[cornermouse]

gift cards and purchases as far as the official spending figures are concerned?

They keep saying that gift cards don't count until they are turned in. Do the store's computers somehow sort the gift cards out of the other purchases when the customer buys gift cards as part of their purchases or are they possibly counting the gift cards twice? Once when bought and once again when used?

[Cuban_Liberal]

1. Here's how it works.

The cash is segregated in a separate account. When the gift card is used, that account is debited and the 'sales' acount is credited.

[TexasProgresive]

2. When you think about it-

Gift cards are a better sale the actual merchandise. The business has money in hand with no product leaving and can allow that money to earn interest. And then there's the plus that some people never redeam the cards or the full amount.

[Kingshakabobo]

4. Some retailers get to pocket the unredeemed certificates

unless they are incorporated in a state that requires the retailer to turn them over as unclaimed property.


http://www.unclaimed.org/owner_news/default.asp?visitorType=owner&ID=71

>Gift-certificate sales are estimated at more than $30 billion annually, said Dan Horne, a gift certificate expert and business professor at Providence College in Rhode Island.


Between 4 percent and 10 percent never are redeemed, Horne said. That's the equivalent of $1.2 billion to $3 billion.


Most shoppers believe the expired certificates become profit for retailers. But several state laws require businesses to turn the money over to the state as abandoned property.

That can mean big money to state governments. Delaware estimates it collected $11 million worth of unclaimed gift certificates last year through the abandoned property law, also known as the escheat law. Because so many companies are incorporated in Delaware, the state is eligible for millions in unredeemed gift certificates, Horne said<

[proud2BlibKansan]

15. My friend got a gift card

that lowered in value by $2.50 every month she didn't use it.

[izzie]

6. I just found one for $50 two years old

I also used it. I did not think they would take it but it went right through.

[0007]

10. The only thing is, that you lost 14% of the value of card.

It was the stores gain.

[cornermouse]

5. Thank you.

I didn't know.

[Mabeline]

3. Also, don't some begin to "charge" if the card isn't used

within a certain length of time, taking money away from the value of the card?

[RoeBear]

7. I've heard of that scam

sneaky bastards

[Bronco69]

8. Yep. They sure do. Here's the way I understand it...

In order to take your money (in this case a gift card) the company has to perform a service. A company can't just take your money and not give you anything in return. That being said, a gift card can't expire because basically you have given them money to hold for future purchases. The way they get around it is to charge you a service charge after 1 yr., 2yrs. etc. The value of the card declines until there is nothing left on the card and basically you have given the company money for nothing.

[jmowreader]

13. That sounds like something Wal-Mart would do

All retailers handle their unredeemed gift-card balances the same way: they put it in interest-bearing accounts at the bank. As long as they're holding your money, it's earning them money.

Some retailers do charge a service charge if you keep your card more than a certain period of time. Others don't. I've redeemed Lowe's gift cards two or three years after I got them with no reduction in the dollar value on the card, Home Depot cards a couple years later with no reduction, and I had a Target card that did the same thing.

The only reason for a service charge like Bronco69 describes is to motivate people to use the cards up within a reasonable period of time. As long as there's money on that card, they have to keep an open record on it in their nationwide database.

Now, you wanna know what the stupidest (for the customer, that is) gift card in the world is? The Wal-Mart Reloadable Shopping Card. Freepers love these fucking things. They buy these cards for themselves and load them with hundreds of dollars every month. This is the single greatest thing Wal-Mart ever invented, I'm here to tell ya--not only does Wal-Mart get to earn interest on your money without paying you a nickel of it (the only benefit here is a 3-cent/gallon reduction in the price of gas at the Wal-Mart gas station IF there is a Wal-Mart gas station in your area, and many places don't have one), all of the money you've got sitting on that card is locked into Wal-Mart; it can't be spent anywhere else and, unless you live in a state that requires gift cards to be returnable for cash, you can't cash it out. Plus, if you lose your Wal-Mart Reloadable Shopping Card or it gets stolen, all of that money immediately vaporizes; you get none of it back.

[sbj405]

16. Anyone have the list of states that require the cards to be returned for

cash?

Seems like this would be helpful for a lot of DU'ers especially those getting cards from red stores.

[TO Kid]

11. That's common with phone cards

The scam may be used elsewhere, but generally speaking any company that values its reputation will honour the full value as long as they remain in business. Their is no incremental cost in keeping the record so it makes no sense to piss off the customer.

[Mabeline]

12. OMG...my husband uses phone cards while away working..

he told me the other day he found out that one he was getting, every time he used the card to call home, would make him listen to some kind of advertising for their services, and take the minutes he had to listen to them off his card..I forget which it was but he was not happy. Talk about a scam, make US pay THEM to listen to their advertising.

[yellowdogintexas]

9. Mardel Books the so called "Christian Family Bookstore"

actually charges a service fee when you buy the gift card!!!

I bought a gift card there a few years ago for my very religious brother in law, at suggestion from his & my husband's sister. I could not believe they hit me with a $2 service charge just to take a piece of plastic out of their store! Sure don't get that at Borders or B&N, or Half Price Books.

Another example of so called Christian business. Never putting my foot across that threshold again.

[jmowreader]

14. The computer can sort the gift cards out.

Every SKU in any retail store is attached to a department; everyone runs gift cards as their own department.

If you walk up to the counter at any store with a cartful of merchandise, the computer will sort every item out into its own department and credit that department with the sale. (It will also debit that department when an item is returned.)

There is a "Sales By Department" report in my computer. When I run it, it will tell me the non-retail departments (fees, gift cards and tool rental) figures, add them together, then report every retail department before adding those together and finally add the non-retail department and retail department figures to give a Store Daily Sales figure. But when we meet at the beginning or end of the day to look at the previous day's activity, the only number we'll care about is the retail department sales.