A gift card is a restricted monetary equivalent or scrip Scrip is any substitute for currency which is not legal tender and is often a form of credit. Scrips were created as company payment of employees and also as a means of payment in times where regular money is unavailable, such as remote coal towns or occupied countries in war time. Other forms of scrip include subway tokens, arcade tokens and that is issued by retailers Retailing consists of the sale of goods or merchandise from a fixed location, such as a department store, boutique or kiosk, or by mail, in small or individual lots for direct consumption by the purchaser. Retailing may include subordinated services, such as delivery. Purchasers may be individuals or businesses. In commerce, a "retailer" or banks Banking is generally a highly regulated industry, and government restrictions on financial activities by banks have varied over time and location. The current set of global bank capital standards are called Basel II. In some countries such as Germany, banks have historically owned major stakes in industrial corporations while in other countries to be used as an alternative to a non-monetary gift A gift or a present is the transfer of something without the expectation of receiving something in return. Although gift-giving might involve an expectation of reciprocity, a gift is meant to be free. In many human societies, the act of mutually exchanging money, goods, etc. may contribute to social cohesion. Economists have elaborated the. Highly popular, they rank as the second-most given gift by consumers in the United States ^ b. English is the de facto language of American government and the sole language spoken at home by 80% of Americans age five and older. Spanish is the second most commonly spoken language (2006) and the most-wanted gift by women, and the third-most wanted by males.[1] Gift cards have become increasingly popular as they relieve the donor of selecting a specific gift.[2] In Canada, $1.8 billion were spent on gift cards and in the UK, it is estimated to reach 3 billion (GBP) for 2009 whereas in the United States, about $80 billion were paid for gift cards in 2006.[3][4] The recipient of the gift card can use it at his or her discretion within the restrictions set by the issuing agency.
Contents |
History and overview
Although gift cards have been around since the 1900s, the first mention of a "Gift Card" is on December 5, 1916 for gloves at Hampton's quality store in The Eugene Daily Guard, number 144, based in Eugene, Oregon, on the editorial page - it reads:[5]
"A Gift Shortcut - and a shortcut to certain satisfaction. Give gloves. No worry about style, size, or color - just step into our Centeremi Glove Department and Buy a Christmas Glove Gift Card for the price which you desire to pay for the gloves. Give or send the card to "her" she "cashes it in" for just the kind of gloves she wants. Simple? Try it."
This description is the earliest and most accurate in describing the idea behind Gift Cards as they are used today, contradicting the popular belief that gift certificates Scrip is any substitute for currency which is not legal tender and is often a form of credit. Scrips were created as company payment of employees and also as a means of payment in times where regular money is unavailable, such as remote coal towns or occupied countries in war time. Other forms of scrip include subway tokens, arcade tokens and were introduced first, with Gift Cards to follow. The first mention of Gift Certificates is on Saturday, December 13, 1917, in The Deseret News, page 3[6].
Function and types
A gift card may resemble a credit card A credit card is a small plastic card issued to users as a system of payment. It allows its holder to buy goods and services based on the holder's promise to pay for these goods and services. The issuer of the card grants a line of credit to the consumer from which the user can borrow money for payment to a merchant or as a cash advance to the or display a specific theme on a plastic card the size of a credit card. The card is identified by a specific number or code, not usually with an individual name, and thus could be used by anybody. They are backed by an on-line electronic system for authorization. Some gift cards can be reloaded by payment and can be used thus multiple times.
Cards may have a barcode A barcode is an optical machine-readable representation of data, which shows certain data on certain products. Originally, barcodes represented data in the widths and the spacings of parallel lines, and may be referred to as linear or 1D (1 dimensional) barcodes or symbologies. They also come in patterns of squares, dots, hexagons and other or magnetic strip A magnetic stripe card is a type of card capable of storing data by modifying the magnetism of tiny iron-based magnetic particles on a band of magnetic material on the card. The magnetic stripe, sometimes called a magstripe, is read by physical contact and swiping past a reading head. Magnetic stripe cards are commonly used in credit cards,, which is read by an electronic credit card machine. Many cards have no value until they are sold, at which time the cashier enters the amount which the customer wishes to put on the card. This amount is rarely stored on the card but is instead noted in the store's database, which is crosslinked to the card ID. Gift cards thus are generally not stored-value cards A stored-value card refers to monetary value on a card not in an externally recorded account and differs from prepaid cards where money is on deposit with the issuer similar to a debit card. One major difference between stored value cards and prepaid debit cards is that prepaid debit cards are usually issued in the name of individual account as used in many public transport systems or library photocopiers, where a simplified system (with no network) stores the value only on the card itself. To thwart counterfeiting, the data is encrypted In cryptography, encryption is the process of transforming information using an algorithm (called cipher) to make it unreadable to anyone except those possessing special knowledge, usually referred to as a key. The result of the process is encrypted information (in cryptography, referred to as ciphertext). In many contexts, the word encryption. The magnetic strip is also often placed differently than on credit cards, so they cannot be read or written with standard equipment. Other gift cards may have a set value and need to be activated by calling a specific number.
Gift cards can also be custom tailored to meet specific needs. By adding a custom message or name on the front of the card, it can make for an individualized gift or incentive to an employee to show how greatly they are appreciated. Some companies offer custom designs on the cards for businesses wishing to add their logo. Special order cards are available for businesses.
Gift cards are divided into "open loop" and "closed loop" cards. The former are issued by banks or credit card companies and can be redeemed by different establishments, the latter by a specific store or restaurant and can be only redeemed by the issuing provider. The latter, however, tend to have lesser problems with card value decay and fees.[1] In either case the giver would buy the gift card (and may have to pay an additional purchase fee), and the recipient of the card would use the value of the card at a later transaction. A third form is the "hybrid closed loop" card where the issuer has bundled a number of closed loop cards; an example is a gift card for a specific mall A shopping mall is one or more buildings forming a complex of shops representing merchandisers, with interconnecting walkways enabling visitors to easily walk from unit to unit, along with a parking area – a modern, indoor version of the traditional marketplace.
Gift cards differ from gift certificates Scrip is any substitute for currency which is not legal tender and is often a form of credit. Scrips were created as company payment of employees and also as a means of payment in times where regular money is unavailable, such as remote coal towns or occupied countries in war time. Other forms of scrip include subway tokens, arcade tokens and, in that the latter are usually sold as a paper document with an authorized signature by a restaurant, store, or other individual establishment as a voucher A voucher is a bond which is worth a certain monetary value and which may be spent only for specific reasons or on specific goods. Examples include housing, travel, and food vouchers. The term voucher is also a synonym for receipt and is often used to refer to receipts used as evidence of, for example, the declaration that a service has been for a future service; there is no electronic authorization. A gift certificate may or may not have an expiration date and generally has no administrative fees.
Bank-issued gift cards may be used in lieu of checks as a way to disburse rebate A rebate is an amount paid by way of reduction, return, or refund on what has already been paid or contributed. It is a type of sales promotion marketers use primarily as incentives or supplements to product sales. The mail-in rebate is the most common. A MIR entitles the buyer to mail in a coupon, a receipt and barcode in order to receive a check funds. Some retailers use the gift card system for refunds in lieu of cash thereby assuring that the customer will spend the funds at their store.
A Charity Gift Card allows the gift giver to make a charitable donation, and the gift recipient to choose a charity that will receive the donation.
Mobile & Virtual gift cards
Mobile gift cards are delivered to mobiles phones via SMS Short Message Service is the text communication service component of phone or mobile communication systems, using standardized communications protocols that allow the exchange of short text messages between fixed line or mobile phone devices. SMS text messaging is the most widely used data application in the world, with 2.4 billion active users, messages and phone applications including iphone The iPhone is a line of Internet and multimedia-enabled smartphones designed and marketed by Apple Inc. The first iPhone was introduced on January 9, 2007 applications allowing users to carry only their cell phones. Benefits include tying them to a particular phone number and ease of distribution through email.
Virtual gift cards are delivered via e-mail to their recipient, the benefits being that they cannot be lost and that the consumer does not have to drive to the bricks and mortar location to purchase a gift card.
Target [7], one of the top seller of Gift Cards in the US and Starbucks [8] have launched mobile gift cards. Several companies are expected to follow their lead including gift card vendors like snapgifts [9].
Pitfalls
It has been argued that holiday giving destroys value due to mismatching gifts.[10] The most efficient way to keep value in gifting would be to give cash, however this is socially acceptable only within limits. Gift cards, to a degree, may overcome this problem but have certain pitfalls. In addition, it has been suggested that the absence of the thought of selecting a specific gift makes a gift card a worse choice than a poorly executed but individual gift.[11] New products in the gift card industry are evolving to tackle this "impersonal" pitfall of gift cards. New services launched by some service providers allows for customization and personalization of gift cards.[12]
Gift cards have been criticized for the ability of the issuing authority to set rules that are detrimental to the consumer. Thus the recipient may have to face expiration dates, administrative fees, restrictions in use, and absence of adequate protection in case of fraud or loss.[2] Over time the value of a gift card may become zero. However, these issues have diminished significantly in recent years. Many states have enacted laws limiting or prohibiting all fees or expiration dates for gift cards. Further, because of the negative impact on sales that such policies can have, most merchants have adopted and even advertise a "no fee, no expiration" policy for their gift cards, whether or not state laws require it.[13]
Gift cards are considered unsecured debt In finance, unsecured debt refers to any type of debt or general obligation that is not collateralized by a lien on specific assets of the borrower in the case of a bankruptcy or liquidation by bankruptcy courts, and as such can become valueless when a company files for Chapter 11 reorganization Chapter 11 is a chapter of the United States Bankruptcy Code, which permits reorganization under the bankruptcy laws of the United States. Chapter 11 bankruptcy is available to every business, whether organized as a corporation or sole proprietorship, and to individuals, although it is most prominently used by corporate entities. In contrast,.[14]
Redemption rate
Not all gift cards are redeemed, which can be for a multitude of reasons. The card may get lost, there may be time decay (expiration and fees) or complex rules of redemption, the recipient may not be interested in the store that accepts the card or be under the false assumption that not using it will save money for the giver. It has been estimated that perhaps 10% of cards are not redeemed, amounting to a gain for retailers of about $8 billion in the US in 2006[4]
Third party brokers
The secondary gift card market is primarily made up of two companies. Plastic Jungle was founded first in 2007 and then Gift Card Rescue was founded in 2008. Since this time many other companies have entered the market due to their being almost no barriers to entry. Most companies however do not succeed in becoming profitable and have to shut down. Some examples include Swapagift and Rackup.
In the secondary gift card market cards are purchased for up to 90% of their value and then re-sold for anywhere from 5-30% off. These companies look to capitalize on the 6-10 billion dollars worth of Gift Cards that go unused each year. [15] [16]
Incentive of Choice
Flexibility and excitement are the cornerstones to the success of a company’s incentive program. Senior management at companies all over the world struggle to find the right solution for every program be it for employees or customers often finding that one size does not fit all. Plus, an increasingly diverse workforce makes pleasing everyone a nearly impossible objective.
The recognition of diversity, in individuals and motivation, is key to the success of gift certificates and gift cards. There are gift certificates, gift cards, and virtual gift certificates that cover everything from travel to video rentals, spa services, rounds of golf, dining, electronics and a wide variety of other merchandise and services available too. There are even gift certificates that allow the holders to redeem for other gift certificates and gift cards. All of these products flourish because some enlightened managers understand that what people like – what makes them tick – is different from person to person. Companies often choose gift certificates and gift cards because they have the widest possible appeal.
Gift certificates/gift cards empower the recipient with the right to choose the item that most motivates himself or herself. The employee is the boss. By enabling employees to make decisions for themselves, these awards take on more power to influence behaviors like reaching sales goals or maintaining safety in the work place. Instead of deciding for them, you let them have the final say of the product that will make them work harder. They also offer employees the freedom to go shopping for their reward whenever they feel like it. They may not even have to leave the comforts of their home by redeeming online. The right to choose and the flexibility of when to choose allows the recipient to actually take their time and contemplate what they truly want making the reward much more memorable. [17]
Companies like National Gift Card Corp. are able to offer the incentive community hundreds of gift cards from retailers and restaurants nationwide in bulk, and often times, with discounts. [18]
Regulations
Canada
In the provinces of Manitoba According to the 2006 Census, the largest ethnic group in Manitoba is English Canadian , but there is a significant Franco-Manitoban minority (148,370) and a growing aboriginal population (192,865, including the Métis). Other ethnic groups include Germans (216,755 - the second-largest group), Scots (209,170), and the Irish (155,915). Manitoba is, Ontario Ontario is bordered by Manitoba on its west, Hudson Bay on its north, and Quebec on its east, and by five States of the United States to its south : Minnesota, Michigan, Ohio, Pennsylvania (Lake Erie) and New York. All but a small portion of Ontario's 2,700 km (1,677 mi) border with the United States follow inland waterways: from the west at Lake, Alberta Alberta is located in western Canada, bounded by the provinces of British Columbia to the west and Saskatchewan to the east, the Northwest Territories to the north, and the U.S. state of Montana to the south. Alberta is one of three Canadian provinces and territories to border only a single U.S. state . It is also one of only two Canadian, and British Columbia The capital of British Columbia is Victoria, the fifteenth largest metropolitan region in Canada. The largest city is Vancouver, the third-largest metropolitan area in Canada and the second-largest in the Pacific Northwest. In 2009, British Columbia had an estimated population of 4,419,974, legislation has been passed to ban expiry dates and fees collected on gift cards.[19] It does not apply to cards where there is a direct agreement between the user and the bank that issues the bank. It refers to the Open Loop gift card program.
United States
In the past, uniform standards concerning gift cards did not exist. This is set to change as an addendum to the Credit CARD Act of 2009 directs the federal government to create consumer-friendly standards pertaining to gift cards.[20] Most notably, the new regulations will prohibit retailers from setting expiration dates unless they are at least 5 years after the date that the card was loaded. In addition, retailers will no longer be able to assess dormancy, inactivity, or service fees unless the card has been inactive for at least 12 months, and if fees are added after that period, the details of such fees must be clearly disclosed on the card. Additionally, retailers will be unable to levy more than one fee per month. The new provisions will take effect on August 22, 2010.[21]
Open loop cards are governed by rules of the Comptroller of the Currency, however oversight has been criticized.[2] Closed loop gift cards are subject to rules set by different state regulations, and issuing authorities vary widely in the rules they set for the consumer.[2] Rules can be changed by the issuer without notifying the consumer[1][4]
See also
References
- ^ a b c "Avoid gift card pitfalls". December 2007. http://www.consumerreports.org/cro/money/shopping/shopping-tips/gift-card-pitfalls-12-07/overview/gift-card-pitfalls-ov.htm. accessed 06-16-2008
- ^ a b c d James R. Hood (2006-02-20). "Congress Considers New Gift Card Rules". http://www.consumeraffairs.com/news04/2006/02/gift_cards_congress.html. accessed 06-16-2008
- ^ Cash, not gift cards, the best present: consumers' association
- ^ a b c Truman Lewis (2006-12-20). "Gift Cards an $8 Billion Gift to Retailers". http://www.consumeraffairs.com/news04/2006/12/gift_card_giveaways.html. accessed 06-16-2008
- ^ December 5, 1916; The Eugene Daily Guard; number 144; page 4; Eugene, Oregon
- ^ Saturday, December 13, 1917, in The Deseret News, page 3
- ^ "Target Mobile Gift Cards". http://www.target.com/Mobile-GiftCards/b?ie=UTF8&node=2242345011.
- ^ "Starbucks Mobile Gift Cards". http://www.starbucks.com/coffeehouse/mobile-apps/starbucks-card-mobile.
- ^ "Snapgifts". http://www.snapgifts.com.
- ^ Stephen J. Dubner and Steven D. Levitt (January 7, 2007). "The Gift-Card Economy". The New York Times. http://www.nytimes.com/2007/01/07/magazine/07wwln_freak.t.html?ex=1325826000&en=970d53de24147ae4&ei=5090&partner=rssuserland&emc=rss.
- ^ "Bad Gift Better Than Gift Card, Says Philosopher". 2006-12-18. http://www.consumeraffairs.com/news04/2006/12/bad_gift.html.
- ^ BusinessWeek (11-05-2007). "Gift Cards with a Personal Touch". http://www.businessweek.com/magazine/content/07_45/b4057049.htm.
- ^ author=Greg Grove title=Gift Card Overview url=http://www.ecardsystems.com/eCardWebPages/giftcardoverview.html
- ^ Tamara Keith (2008-11-17). . NPR NPR, formerly National Public Radio, is a privately and publicly funded non-profit membership media organization that serves as a national syndicator to 797 public radio stations in the United States. NPR was created in 1970, following congressional passage of the Public Broadcasting Act of 1967. This act was signed into law by President Lyndon B. .
- ^ http://www.nytimes.com/2008/11/22/business/22shortcuts.html?_r=2
- ^ http://online.wsj.com/article/SB123361424750941135.html
- ^ Incentive Gift Card Council. "Why Gift Cards are the Incentive of Choice". http://www.usegiftcertificates.org/displaycommon.cfm?an=1&subarticlenbr=26.
- ^ "National Gift Card Corp.". http://www.ngc-group.com.
- ^ [1]
- ^ http://www.govtrack.us/congress/billtext.xpd?bill=h111-627
- ^ http://www.wkow.com/Global/story.asp?S=12188430
Categories: Exonumia | Payment systems Articles about ways money can be moved between persons, organizations, and locations, as well as how financial transactions can be executed | Personal finance Categories: Personal development | Household behavior and family economics | Fields of finance | Debit cards | Giving | Retail financial services
Personal tools
- New features
- Log in / create account
Namespaces
- Article
- Discussion
Variants
Views
- Read
- Edit
- View history
Actions
Navigation
- Main page No Line on the Horizon is the twelfth studio album by the rock band U2. Released on 27 February 2009, it was the group's first album since How to Dismantle an Atomic Bomb , marking the longest gap between studio albums of U2's career. Work on the record began in 2006 with producer Rick Rubin, but most of the material from those sessions was
- Contents A portal is an introductory page for a given topic. It complements the main article of the subject by introducing the reader to key articles, images, and categories that further describe the subject. They also include to-do lists that are used mostly by Wikipedia's editors
- Featured content Featured content represents the best that Wikipedia has to offer. These are the articles, pictures, and other contributions that showcase the polished result of the collaborative efforts that drive Wikipedia. All featured content undergoes a thorough review process to ensure that it meets the highest standards and can serve as an example of our
- Current events Worldwide current events | Topic-specific: Science and technology | Sports
- Random article
Interaction
- About Wikipedia
- Community portal
- Recent changes
- Contact Wikipedia
- Donate to Wikipedia
- Help
Toolbox
- What links here
- Related changes
- Upload file
- Special pages
- Permanent link
- Cite this page
Print/export
- Create a book
- Download as PDF
- Printable version
Languages
- Deutsch
- 한국어
- Italiano
- 日本語
- Suomi
- Nederlands
- Svenska