Yes!
Thanks Aunt B!
This was an recent change that many people figured was coming when the online stacking red card/target gift card and paying with target GC for Disney GC was ended. The instore just caught up.
Profit and loss is big in retail. I worked for convenience stores for many years. Sunday morning going into work at 3am to put together news papers. 500 news papers at a profit of $0.03 each and having to pay someone $8 an hour to put them together. It cost more to put the papers together then it did to sell them. The reason is it is a false leader you come in to buy a paper and the store loses $0.05 on the sale but if you buy the paper and a $0.99 cup of coffee I’ve now made $0.80. Add milk and cigarettes to the mixs and that is how we made money. Same thing goes for gift card each gift car costs a company about $1 to $1.50 just to sell and activate them so they are already working at a loss so if you use a gift card to buy a gift card they can be down $3. Now take that $3 and times it buy 100 people a day doing this then time 365 days a year and it adds up to $109,000.00 a year, thats a big loss.
But why sell them at all, in hopes while you are buying that gift card you are also buying a greeting card, gift card box, or whatever else you want or need. Just like redeeming the card you might spend more at the store then the cards amount.
Don’t ever buy a southwest gift card. They don’t accept their own gift cards for anything but airfare.
When it comes to a global corporate chain like Target, those estimations are extremely high. I work for such a company and unlike a small mom & pop newsstand stocking these, where those numbers might be more in line, large global corporate chains buy everything in such bulk that any loss is practically eliminated from the get. The cards are never the only thing on the truck when shipping, they are never the only thing stocked all day, and they have no upkeep cost once they’re on the shelf (like requiring power like the demo TVs do).
Additionally, the cost to activate a card is next to zero. I mean like “.000001% of a cent” next to zero and is factored into their normal networking cost for a store (it costs more to flip the light switches on and off in the span of a second than it does to activate every card in every store). Any “fee” more than that they put on us, the customer (or the small mom & pop store), is superficial only and is there only because someone did it once before and it was accepted and thus it set a precedent. Just like airline bag fees… or resort parking.
So there’s no loss in activating a card and next to nothing lost in stocking the card (factoring the minimum wage worker who takes the 10 seconds to stock JUST that one brand of card). As already mentioned, the loss comes from people not buying the store’s other merchandise that is under their umbrella of profit margin. You buying that lamp at target nets them 60% revenue. You buying a gift card for Disney nets them 0% revenue…supposedly.
Because, and this is important, this is all completely predicated on the notion that Disney (and the rest of companies that have gift cards in the store) have worked out NO DEAL with Target where they get the cards at a discount. Which… is extremely unlikely.
And regarding the whole money laundering thing, its certainly valid but again…if it’s such a concern, just stop selling them all together and the whole issue goes away.
Not that that is remotely acceptable but…what else IS there to buy other than airfare from Southwest?
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My estimates might be high but yours are to low you would have to sell a billion just to make $1 and the company that makes the cards want to make money too. But it seems we are in agreement that they are used to draw in business.
Early bird check in would be the main thing.