Sometimes a new market is as simple as solving a problem. Take gift cards. The problem: Grandma doesn’t know what to get 14 year old Joey who lives in another state. That’s how it began. Years ago. Today, gift cards are available for quick serve restaurants, movies, online and brick and mortar retailers and holiday sales topped $28Billion in the US according to the National Retail Federation.
While gift cards have solved many gift-giving problems, a dilemma it has caused for parents and their kids is tracking those gift cards. Who sent which one, what is the value (yes, this year our household received 3 gift cards with no written values on them) and how much of the balance is remaining is difficult to track. Parents get frustrated and kids learn that gift cards aren’t exactly money – meaning a few dollars left on the card is the same as zero value to a kid. And while this is a relatively rich value stream for retailers, they are short-sighted if they think that a smart internet company isn’t going to figure out how to solve this problem and grow rich.
Here’s the vision for a smart retail company to take and run. Hey, Best Buy or Target here in town! You’ve both taken e-commerce hits in the last few months. How about using this as your playbook and delivering something OUTSIDE OF THE BOX of value to your customers to help solve this problem for all their gift cards (not just your branded ones) and build some goodwill and loyalty while you’re at it.
First, create a secure portal where parents and kids can log ALL gift cards and prepaid debit cards. They put in the gift card number and use the merchant banking system to retrieve the value and remaining balance. Let them enter the names, addresses and email for the gift givers and allow them to create thank you notes from the portal – even updating them on what was purchased with the gift card. Make it easy. Send an automated statement at their convenience letting them know the outstanding balance. Allow balances under $10 be be consolidated onto one universal pre paid debit card or make it easy to donate balances to charities – with automated receipts for taxes. Position it as a way to teach kids the value of money, gift cards and being good consumers.
The need is there. The idea is real. The only question is: Who is going to do it first?