Independents Finding Greater Success With Gift Cards

November 18, 2004

For the past few years, the popularity of gift cards among consumers has grown dramatically, and, according to a number of recent surveys, this year doesn't appear to be any different.

According to the second annual National Retail Federation (NRF) Gift Card Survey, conducted by BIGresearch, the average consumer will spend $80.45 on gift cards this year, 11.5 percent of their holiday budget. "There's no end in sight to the popularity of gift cards," said NRF President and CEO Tracy Mullin in a press statement. "[G]ift cards are a great option for almost any name on a holiday shopping list."

The NRF survey noted that gift cards have soared in popularity with both gift givers and receivers. This year, more than half of consumers (50.2 percent) in an earlier NRF survey said they would like to receive gift cards for the holiday season, up nearly 10 percent from just two years ago (41.3 percent). Furthermore, this year, 74.3 percent of consumers will purchase a gift card during the holidays, up from 69.9 percent last year. "Retailers have hit the jackpot by capitalizing on the gift card craze with a variety of innovative card designs and packaging," said Phil Rist, vice president of strategy for BIGresearch.

In another survey, Value Link found that 64 percent of U.S. adults said they bought or got a gift card in the previous 12 months, up from 36 percent in ValueLink's 2001 survey. And, according to the 19th annual consumer survey of holiday retail spending plans and trends, commissioned by Deloitte & Touche, gift cards will be the gift purchase of choice, as reported by About.com.

Certainly, the burgeoning popularity of gift cards is not lost on many of the independent booksellers participating in the Book Sense Gift Card program. Those booksellers who spoke to BTW noted that, overall, gift cards have outsold paper gift certificates, and that gift cards have provided more marketing opportunities than their paper counterparts.

Peter Schertz at Maria's Bookshop in Durango, Colorado, told BTW, "We are 100 percent behind the program. We've seen an increase in sales, and the gift card program is much easier administratively. We no longer need huge spreadsheets to track our old paper gift certificates -- it's easy to call up a report from Givex."

Schertz noted that the store celebrated its one-year anniversary in the Book Sense Gift Card program this past November 3. "We feel so comfortable with the program this year and are formulating our big [gift card] push for [the holiday season]," he said. "We plan on making calls to a lot of institutions to see if they're thinking about giving holiday gifts to their employees. We'd like to plant the idea of [giving] a Maria's gift card [as a gift] for their employees."

Bennett Books, a 5,000-square-foot store in suburban Wyckoff, New Jersey, had a blockbuster June -- the first month that its Book Sense gift card program was completely functional. John Bennett, who owns the 16-year-old store with his wife, Betty, told BTW that in June 2004, gift card sales were higher than sales of gift certificates for any month in the history of the store. "Results were tremendous," he said. "June is always a very good month for us -- graduation gifts, teacher gifts, and Father's Day -- our customers are 85 to 90 percent female -- so Father's Day is much bigger than Mother's Day here."

Book Sense Gift Card designs currently available are Tome (Light) at top; El Libro, center, and the Bookworm.

Bennett continued, "People responded very positively to the cards -- they liked the flexibility to send the cards across the country, they liked that it's a durable card rather than a paper certificate. The card designs are good -- we offer the Tome (Light) and the Bookworm. The Bookworm was wildly successful with kids, and surprisingly, with teachers. We didn't realize that the cards would be fun and funky gifts for adults."

Bennett's analysis of June sales showed that 600 cards were sold that month in 2004, versus 400 paper certificates in 2003. Although subsequent months have not reached this level, Bennett has high hopes for December. ''If [gift card] sales in December duplicate June's, we'll end up with an increase in gift card sales, despite fairly flat income levels.''

At J.W. Beecroft Books & Coffee in Superior, Wisconsin, the Book Sense Gift Card Program has not just been successful, it has cut down on paperwork, said Amanda Parker. "The [Gift Card Program] is terrific, we like it a lot," she said. "For one, when a customer has only a small amount of money left [on the card], I'm not worrying about paperwork with credits." More importantly, "our customers seem to like them."

Parker told BTW that, prior to the gift card program, J.W. Beecroft had done extremely well with paper gift certificates. However, gift cards have done even better. "You can market them in the store," she said, "and college-age kids who have to budget themselves like them.... It was a good investment, absolutely."

Janet Bibeau of Storybook Cove, an 800-square-foot children's bookstore in Hanover, Massachusetts, told BTW that the Book Sense Gift Card program has provided her with more branding and marketing possibilities than the paper gift certificate did.

For one, it broadens her store's reach. Even though her store carries children's books, by using a Book Sense Gift Card online, patrons are not just limited to books for kids, they can use the card to buy any kind of title they prefer. This, of course, means a customer can give Book Sense gift cards to any family members or friends to use online for adult or children's books.

Moreover, gift cards are popular with kids, something that isn't lost on their parents. Bibeau reported that the parents of the graduating 4th grade class "bought 50 gift cards for the students. They thought that giving the kids a little credit card would be special."

Maria Bookshop's Shertz concluded, "I know there's a lot of debate on how to get small stores involved in the program, and I hope that is resolved. The program depends on more stores getting involved -- we need widespread participation for it to work." --David Grogan with reporting by Nomi Schwartz

Topics: Book Sense, Gift Cards, News - Bookselling,