When you think of gift cards, do you still only envision the credit card-sized plastic payments tools given as presents? Like most other tools in the payments industry, gift cards have evolved far beyond their original forms.
Consider the plastic factor. Sure, physical gift cards with company logos are prevalent at drug stores, convenience stores, and supermarkets across the country, but consumer demand for omnichannel redemption of these cards – across in-store, online and mobile devices – is ramping up.
We found in our 2015 shopper research that 80% of consumers want the gift cards they buy as presents to be easily redeemable online or in person based on the specific recipient’s preference. Additionally, 98% of gift card recipients redeem them via a variety of channels, including in-store, online, via mobile or using a combination of these options.
Whereas just a few years ago e-gifts were relatively unheard of, roughly half of consumers have now received these online and mobile gifts. And we expect that figure to continue growing as smartphone adoption expands and online shopping becomes even more engrained. Now gift cards are even being integrated into mobile wallet applications, making them easier to keep at the ready and redeem.
However, it’s important to point out that as gift cards have become more omnichannel, the value in physical gift cards has not diminished. Even though usage of e-gifts has grown, plastic cards are still the most favored. Like many payments segments, the gift card industry simply requires a more robust sales and redemption model than in the past to be successful and to keep up with consumer preferences and demands.
And there is good reason for the industry to keep an eye on strategically evolving gift card programs: the demand for gift cards remains incredibly high. Our research found that 83% percent of the population plans to give gift cards this year, for reasons including: they give recipients the flexibility to buy what they want, they are convenient to purchase, and they are what recipients are asking for the most. People still love receiving gift cards, too. 98% of gift card recipients redeem them, and the top reason people like to receive gift cards is so they can purchase what they want.
Like most payments tools, the consumer usage patterns of gift cards are shifting to increasingly include online and mobile. While this omnichannel approach to shopping and purchasing is a natural evolution for consumers, it will be up to the industry to stay ahead of the curve, offering the capabilities and convenience that consumers will expect today and tomorrow. And with the demand for gift cards so high, this is one payments category that should remain at the forefront of omnichannel expansion. Gift cards aren’t just about plastic anymore.
Timm Walsh is the Chair of the Board of Directors for the Retail Gift Card Association.
Source: PaymentsSource
MEDIA CONTACT:
KATY LASEE | MARKETING DEPT.
651 554 8533
KRLasee@traveltags.com
Wilmington, Del. • Electronics retailer RadioShack on Thursday won court approval of a settlement involving priority treatment of certain gift-card holders in the company's bankruptcy and has agreed to sweeten the deal for other cardholders.
Under the settlement approved Thursday by a Delaware bankruptcy judge, holders of roughly a third of the $46 million in outstanding gift cards will receive priority status and have claims paid in full.
But in a significant development reached shortly before the hearing, General Wireless, an affiliate of hedge fund Standard General that acquired the RadioShack trademark and more than 1,740 of the electronics retailer's stores after its bankruptcy filing, has agreed to honor all RadioShack gift cards for 50 percent of merchandise purchases.
That means gift card holders deemed as not having priority status under Thursday's settlement have an alternative to being left with only pennies on the dollar, if anything, as general unsecured creditors.
"They get the benefit they bargained for," said Cathy Hershcopf, an attorney representing RadioShack's official committee of unsecured creditors. "We think the settlement is a very, very generous settlement."
The update to the original settlement is still subject to court approval at a hearing next week on whether to confirm RadioShack's overall bankruptcy plan, but Judge Brendan Shannon described it as a "significant development and a positive one."
Meanwhile, Shannon refused to grant class-action status to a proposed class of individual gift-card holders who challenged the underlying settlement, which was negotiated with the attorneys general of several states, led by Texas.
"Having approved the settlement, I'm not satisfied that class certification is necessary," Shannon said, adding that the creditors committee and attorneys general can adequately represent the interests of gift-card holders.
Under the settlement approved Thursday, gift-card holders are divided into five categories based on the circumstances in which they obtained their cards. People who purchased cards for themselves or someone else have priority status for payment of claims, along with people who "reloaded" existing cards with more money. A small subset of people who hold cards that were issued between 2000 and 2004 and have since been "deactivated" also would be allowed priority claims. Holders of other cards, including promotional giveaways, and cards given in exchange for merchandise returns or in response to customer service complaints, are lumped in with general unsecured creditors.
However, under the proposed add-on to the settlement, all gift cards also would be honored at RadioShack stores, good for half of the purchase price of merchandise being bought. Thus, a holder of a $20 card could use it to cover $5 of a $10 purchase, but could redeem the full amount of the card for a purchase of $40 or more.
Attorneys said that's a significant improvement for nonpriority card holders, who as general unsecured creditors would at best recover only pennies on the dollar for their gift-card balances and would be subject to a $10 minimum recovery threshold. That means they likely would receive nothing at all unless the gift-card balance was between $500 and $1,000, said Clint Krislov, an attorney representing the purported class of individual gift-card holders.
"There's not a large amount of merchandise returns at that number," the judge noted.
While Krislov said the proposed change to the settlement was an improvement, he also argued that it means little if RadioShack does not take adequate steps to ensure that as many gift-card holders as possible receive proper notice of their rights.
RadioShack attorney Greg Gordon said the company has agreed to send email notices to all gift-card holders whose addresses are on file. Card holders also will be able to go to a website to learn about their rights, with the creditors committee and attorneys general overseeing the notice process to ensure that consumers are adequately informed.
Source: The Salt Lake Tribune and Randall Chase from The Associated Press
MEDIA CONTACT:
KATY LASEE | MARKETING DEPT.
651 554 8533
KRLasee@traveltags.com
© 2024, Travel Tags Inc.
All Rights Reserved.