Booksellers Have High Hopes for Gift Cards

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Many recent consumer surveys are predicting a banner holiday season for retailers, and among the hot ticket items this season will be gift cards. According to the National Retail Federation (NRF) 2003 Holiday Consumer Intentions and Actions Survey, there will be a significant leap in the gift card sector, with 48.4 percent of consumers indicating that they would like to receive gift cards this year, up from 41.3 percent last year. Marshall Cohen, an analyst with market research firm NPD Group, said that, with a dearth of must-have items this year, he expects gift cards to become even more popular, as shoppers seek hassle-free gift-giving over the holidays, as reported by CNN Money. Moreover, according to a report by ValueLink, a First Data Corporation, the growth rate for reloading gift cards has more than doubled -- 20 percent to 42 percent growth -- between 2001 and 2003.

But it's not just research firms that see the benefit of gift cards -- booksellers do, too. This week, Bookselling This Week spoke to a number of independent booksellers who recently joined the Book Sense Gift Card Program about how they plan to make the most of gift cards.

Overall, each bookseller was enthusiastic about the benefits of gift cards over paper gift certificates.

"It's been fantastic," said Collette Morgan of Wild Rumpus Books in Minneapolis, a children's bookstore. "We started [selling gift cards] the last week in October, and already we had to order more cards." Though she expected gift cards to do well, Morgan still acknowledged that she was "shocked. We always sold a lot of gift certificates, and I thought we'd match that, but we far exceeded it." Based on the first two weeks of November, gift cards sales have doubled that of paper certificate sales over the same period last year, she reported.

Morgan attributes gift cards' popularity, in part, to "kids think plastic is much cooler than paper…. Kids think it's empowering … the mystique of the credit card."

Without question, Book Sense Gift Card participants who spoke to BTW indicated that the gift card's time had come and believed it was just good business to offer their customers an electronic gift card.

Andrew Nettell of Arches Book Company in Moab, Utah, said joining the Book Sense Gift Card was the "biggest no-brainer. Even though we're in rural Utah, everyone knows gift cards. It made sense to hook up with a national program." He said that Arches purchased a generic card with the Arches' logo, though the store may go with a custom design in the future.

On October 1 in Middletown, Rhode Island, a Barnes & Noble opened up about two miles from the independent Island Books. As a result, for Island's Judy Crosby, customer loyalty has become crucial and she believed that offering her customers gift cards was one way to keep them coming through the door. "I'm trying to do more interesting things to keep my customers loyal," she said. "I think gift cards will increase sales."

These booksellers noted that another reason that they went with plastic was because it would be easier to market the electronic gift card -- thereby increasing sales -- and that gift cards presented promotional opportunities.

At Chesterfield Books in Chesterfield Turnpike, Michigan, Constance Geverink said that she displays the cards on endcaps using the gift card presenter that came with her card order -- a display opportunity not possible with paper gift certificates. "I think the cards are going to work out really great," she said, and added "[The cards] look really great."

"Because [the cards] have no value … you can put them anywhere in the store," said Arches' Nettell. "As we get close to Christmas, I think they'll fly off the shelves. We have them in 20 different areas around the store. We have them at the cash wrap, near the door, on endcaps, and with the greeting cards…. We also have a coffee shop, and [customers can] use [the gift cards in the coffee shop]" just as they would in the bookstore.

At Wild Rumpus, Morgan noted that a tremendous benefit of the cards is that they provide the store promotional opportunities a paper gift certificate does not readily offer. For instance, starting on the Friday after Thanksgiving, Wild Rumpus will be taking advantage of the cards' ease-of-use by running a holiday promotion where customers will receive a $5 gift card for every $50 they spend. The $5 cards are simply swiped in advance of the start of the promotion, a quick and painless process.

Additionally, the gift card has benefited Wild Rumpus's school book fairs -- where the store donates 20 percent of a sale to the local school for a limited time. In the past, if a customer wanted a book and it was out-of-stock and had to be ordered, the school would then lose out of proceeds from the sale. Not now. "We sell them a gift card [for the amount of the special order] and 20 percent still goes to the school."

Island Books' Crosby said she displays the cards at the front counter, in the children's section, and near the greeting cards. Additionally, she plans to promote the cards on the radio. Island Books purchased a series of 30-second spots on WCRI, the local classical station, and will run two or three different commercials during the holiday season. "One of those spots will be about the gift card," she said, and estimated the 30-second gift card commercial will run about 20 times. Island Books will also promote the gift cards in the local newspaper.

Arches in Moab, Utah, also advertises the program in local print media and in its e-newsletter.

Debi Echlin of Second Edition Books in Oakland, California, said one of the reasons she joined the program was "the fact we could [market the cards] all over the store."

However, she stressed: "We need a whole lot more participation [from other independent booksellers]."

Without question, the booksellers who spoke to BTW echoed Echlin's sentiments. "It matters a lot [that more booksellers join] in terms of this being a national program," Arches' Nettell said. "The more who sign up the better. I understand the start-up costs, but after that there are very few costs: There are the card costs and the activation fees. It's a little more costly than paper, but the marketing [possibilities] outweigh the costs."

Chesterfield Books' Geverink noted that the only concern she had about gift cards was that, in these early stages of the program, not all Book Sense stores are participating. Nonetheless, for Chesterfields, offering its customers gift cards was the only way to go because "every other store out there has them. People ask for cards, not gift certificates. The cards seem easier."

Concluded Morgan: "I love [the program], and I would not go back to paper. I would fight ABA tooth and nail if they tried to go back. I wish other booksellers would sign up. If you are a Book Sense store, I don't see why you wouldn't do it." -- David Grogan