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Gift Cards in the Wild: The Holly Jolly and the Humbug Edition

With just over a week until all of the major winter holidays kick off, we are well into the prime holiday shopping season when retailers and fraudsters alike pull out all the tricks to capture a part of the consumer’s wallet, making now a perfect time to look at industry trends that will make consumers holly jolly and fraud schemes that will make anyone feel like a holiday humbug.


The Humbug:

Let’s start with the bad news: fraudsters are also taking advantage of the holiday shopping season. A recent report notes that so far this year, more than $74 million in gift cards has been stolen so far this year. Often when discussing fraud, the topic focuses on internet purchases and IRS scams. However, a new type of third party fraud started popping up recently. In this new scam the fraudster covers the barcode on a gift card with a barcode of another gift card in the scammers possession. 

In this specific example seen in Indiana, the fraudster had a Delta barcode they reprinted onto a Lowe's gift card. When the consumer purchased the card, they thought they were putting funds on the Lowe's card However, they actually added value to the fraudster's Delta card.


This type of scam is fast-growing with a report coming out of Florida with the same system. This new spin on a classic gift card scam is a reminder to everyone in the industry to think about the importance of third-party security strategy.


Additionally, scammers are making the most of this holiday season by posing as family members who need gift cards. The scammers email someone and as them to purchase gift cards, stating they’re unable to due any number of reasons and that they’ll pay the individual back. It’s understandable that this style of scam is spiking during the holiday season, but this is one of the easiest ones to avoid by simply calling that specific family member.


The Holly Jolly:

The K+H Connection and Flourish team watch for unique gift card promotions all throughout the year but it’s always fun to see what new and innovative strategies brands use throughout the holidays. Below are 3 standout gift card card promotions that make the most of current trends and technology and what you can learn to increase your gift card sales in the new year.


JCPenney



In a recent Flourish in a Flash episode, we discussed the difference between discounting to drive sales and creating strategies that add value to drive sales. One of the easiest ways online retailers can add value is through free shipping. Because of the costs associated with shipping, it makes sense that retailers often have a minimum order amount to unlock free shipping. 


JCPenney took a different route beyond the traditional messaging of “You’re just $X away from free shipping.” Instead of pushing product, which is often a one-and-done sale, they’re promoting the sale of gift cards to help consumers reach the threshold for free shipping. Pointing customers to a gift card rather than product means a return visit as well as the increased likelihood of additional customer spend above and beyond the value of a gift card. Imagine how a promotion like this could drive foot-traffic if a customer selected buy-online, pick-up in-store and was able to receive the gift card at pickup. 


Tip #1:Treat your gift card like a product, if there are opportunities where you would highlight a featured product, consider working your gift card into the rotation in order to raise consumer awareness and take advantage of the added benefits that come with gift card use.


Ruth’s Chris Steakhouse


One of the biggest trends we’ve heard throughout the year at different conferences, webinars, and articles is that customers are looking for experiential opportunities. Traditionally, restaurant gift cards have been simply standard denominations with promotions often being some sort of BOGO offer. Ruth’s Chris new experiential gift cards change the game by packaging signature experiences through specific gift cards. The most notable card is their Tastemaker Club card which is part gift card, part experience, and part subscription. The Tastemaker Club card ($1,500) gives the recipient access to all events in their 2020 Tastemaker series as well as a $150 dining card and voucher to tour Stag’s Leap Wine Cellars. 


Tip #2: Offering packaged experiences adds an additional level of personalization that many customers look for when giving gift cards, and can be a unique way to drive customer attention to initiatives a brand would like to highlight. A similar strategy can be accomplished by having specific messaging or imagery on the gift card to prompt consumers to use the gift card in a specific way.


Sweetwater Sound



Many brands use gift card promotions to drive a specific order value. Promotions such as “Spend $50 and get a $10 gift card” are a tried and true strategy. What makes this Sweetwater gift card promotion unique is that the gift card value is not connected to a specific amount of spend. Instead, the brand looked at a core set of products individually and identified a gift card value to connect with the specific product. It’s likely that Sweetwater did a deepdive with their numbers and know their customer behaviors quite well in order to make such specific promotional offers. When brands understand customer data on a detailed level, it opens up a number of new strategies and opportunities to both influence and reward customer behavior. 


Tip #3: Dig into your post-holiday data and look at key metrics such as total cart value with gift card purchases, what products people are buying with gift cards, overall lift, and average time to redemption. Once you understand how consumers are interacting with your brand, connect to additional stakeholders and discuss ways gift card can support larger company initiatives. 


Have you seen an interesting holiday promotion or heard of a new gift card scam this year? Let us know and we’ll be sure to share it in another post.

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