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You should pay me …

Holiday Buy Now GC PromoI just got charged $3.50 to buy a gift certificate from a store. That's not right.

They should be paying me and thanking me instead.

When someone gives a gift certificate from your business–they are doing your marketing for you.  They are doing you a favor by bringing you a new customer, and even paying for their friend's first purchase.

You should consider how much you saved in getting a new customer–and REWARD the person who brought them to you.  Lettuce Entertain You restaurants in Chicago gets it right.  They give you a $25 gift certificate when you buy one for a friend.

Lesson: How can you encourage your customers to bring their friends?  How many gift certificates should you give away?

(A similar story from Ben and Jackie)

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  1. Stuart Bruce January 7, 2009 at 11:50 am #

    Not sure I like this idea. Agree with you about how shocking it is that a company would charge you for a gift certificate. The problem with rewarding the person who buys the certificate is that in the eyes of the receiver of the gift it makes them look even worse. A gift certificate is always the gift of last resort, only given by somebody because they don’t care enough to give a proper gift. If you know they’ve been rewarded for doing so it makes them look even worse. You might get positive WOM from the giver but you’re also likely to get negative WOM from the recipient who is made to feel cheap.

  2. Denise Shiffman January 7, 2009 at 4:06 pm #

    Brilliant point. It’s so fundamental. If you want customers to do something you give them a carrot not a stick.
    Apparently the company doesn’t really see the value of gift certificates to their business — or spreading the idea of going there to your friends.

  3. Nick S. January 7, 2009 at 4:10 pm #

    How many people receive a gift card and say, “I wonder if this person got a gift card in return when they bought this one for me.” I’m going to bet that it’s not a lot of people. Certainly not me. And even if I knew that the person who gave me a gift card was given one in return, I would not mind. Give a little, get a little. What’s the harm in that?
    Andy, I agree with you 100%. Plus, gift cards aren’t always used, so in some cases, it’s like the company was paid to advertise itself. Now that’s a crazy thought…

  4. Cristhian Mestre January 8, 2009 at 2:19 am #

    Very interesting commentaries. I agree with you Andy, but instead of giving the same amount gift card to the buyer why not giving a 10% or 20% off in his/her next purchase. The receiver is getting money ($25, $30, so on) a present and the buyer a discount.

  5. flummox January 8, 2009 at 8:59 am #

    Charging people for gift cards makes no sense to me. Then again, gift cards themselves seem odd, like money but so much more restricted.

  6. Torley January 8, 2009 at 12:17 pm #

    I’ve run into some strange activity related to charging for gift cards, like people bidding OVER-price for them on eBay, and the numerous theories that emerged asking “Why?” It hit the front page of Digg:
    I also wrote a post on Wise Bread inquiring about the shady possibilities behind cheaper-than-expected iTunes gift cards:
    I agree a gift card should make both the gifter and giftee feel good about the company it’s for.
    @Cristian: That’s what got me to buy discount glasses ($50) at even cheaper prices!

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