Canadian Bookseller Sees Sales Go North With Switch to Gift Cards

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Indigo Books & Music Inc., the Canadian bookseller, switched from paper gift certificates to plastic gift cards in November 2002, and has seen escalating gains since then, according to Keith Liu, vice-president of business development for Indigo. Instituting the gift card program, run by the Givex Corporation, increased Indigo's sales 35 percent over the paper certificates, and, Liu told BTW, "Our stores experienced an immediate uplift, and we're pretty happy about it. One of the reasons we went with Givex was we suspected that it could institute the program faster than the others. It's kind of a small shop and had people on site." That turned out to be the case.

According to Liu, "From a systems standpoint, it's much easier to track sales for marketing programs. With the gift cards, we have a lot more flexibility and freedom. Gift cards are self-merchandizing within the store. They have no inherent value until they've been paid for, and we can merchandize them at cash [wrap]."

The gift cards are displayed at Indigo's cash registers or in other strategic locations around the store. Racks of cards can also have a direct impact on shoppers, particularly those who are undecided about a gift. "It (a gift card) appeals to last minute shoppers," Liu said. "Paper certificates are more complicated and cannot be displayed. There's the convenience factor. Our cards make a very attractive presentation: they come with a nice envelope, and we have themed cards for special occasions and several designs."

Indigo's adoption of the card system was easy for the staff, and even easier for customers. Training was done quickly -- about 20 minutes of training time and some practice. "There was a learning curve, but once it was climbed, transactions were faster and easier than they had been before. It's a fairly intuitive system. For customer use, the short amount of learning curve needed to use the cards has already been climbed many times over, since virtually all retailers have instituted gift cards," Liu noted.

Indigo Books & Music, which also includes stores under the Chapters, Coles, and World's Biggest Bookstore names, currently offers four cards: three in denominations -- $10, $25, $50, and flexible cards for any amount from $2 to $200. "We offered the pre-denominated cards for the transition from paper to plastic, since our gift certificates were in those denominations," said Liu. "As people become familiar with the flexible cards, we'll likely get rid of the pre-denominated."

The flexible cards can be replenished, unlike the pre-denominated ones. Liu expects that once they move into the purely flexible program, replenishing cards will be done more frequently. A few customers, who are a bit resistant to the switch will continue to redeem the paper certificates, but can no longer purchase them. Liu said, "Our paper gift certificates are valid in perpetuity. We sold them for a short time after the switch for all the people used to the old system. You want a grace period -- after that you need to cut the ties." -- Nomi Schwartz