Continue reading Plastic Jungle: Gift Card Marketplace Nabs $7.4 Million

Plastic Jungle: Gift Card Marketplace Nabs $7.4 Million originally appeared on BloggingStocks on Fri, 19 Mar 2010 15:30:00 EST. Please see our terms for use of feeds.

What's on your Christmas wish list? If the National Retail Federation is right, gift cards are probably holding a respectable place toward the top of the list. These little pieces of plastic are requested most this time of year, and they have the added perk of allowing people to get what they want instead of money wasted on presents that sucks. This trend may give retailers a hand this year, as they'll be able to keep their inventories down.

If shoppers are slow with the cash, retailers won't have to resort to just slashing prices as they had to last year to move product out the door. When the stuff on the shelves is cheap, gift cards aren't as attractive because there's a deal to be had! This year, if inventories are kept down, gift cards are more likely to move.

Continue reading Retailers offering new perks to encourage gift card giving

Retailers offering new perks to encourage gift card giving originally appeared on BloggingStocks on Sun, 15 Nov 2009 14:01:00 EST. Please see our terms for use of feeds.

Well, last night I was checking out some articles at Brandweek.com, and lo and behold, I came across this one discussing the holiday card. You know how Christmas Clubs work at banks, correct? Same principle applies here. In a simple nutshell, you get the plastic, you store funds on it, and then you can access those funds later on in the season to acquire presents. It's basically like a gift card that you use for budgeting purposes. Not only is Sears involved in this, but so is Kmart. And there's a promotion going on that's mentioned in the article where you can earn a nominal amount of bonus money on it. I don't know the details; I would suggest checking with Sears/Kmart for further information.

Continue reading Interesting holiday campaign from Sears Holdings

Interesting holiday campaign from Sears Holdings originally appeared on BloggingStocks on Tue, 08 Sep 2009 16:15:00 EST. Please see our terms for use of feeds.

We all know that this Christmas is going to be particularly tough on retailers. Wal-Mart (NYSE: WMT), Target (NYSE: TGT), Sears (NASDAQ: SHLD), and Best Buy (NYSE: BBY), as well as hipper competitors Abercrombie & Fitch (NYSE: ANF) and Gap (NYSE: GPS), will be fighting it out at the mall Mad-Max style the next several weeks.

It's not going to be pretty. With comps and cash flows on the line, these chains will be looking to extract as much discretionary money from consumer wallets as is heavenly possible. But there's a troubling sign with respect to a popular gift option this year.

Gift cards have been soaring in popularity over the years. Not only do they make great presents, but retailers love them because they represent a little insurance policy: if the Christmas quarter isn't as strong as a retailer would like, then redemption of gift cards will theoretically help the bottom line in the next quarter. The card purchases do not get recorded as a sale until they are redeemed. So it's like a squirrel putting food away for the long, cold winter.

Unfortunately, we have some bad news on this front: gift-card sales are expected to be down 6% this season. That's not what retail investors want to hear. It's just another reason for traders to short this sector.

Continue reading If gift cards are struggling, then retail is really in trouble

If gift cards are struggling, then retail is really in trouble originally appeared on BloggingStocks on Wed, 19 Nov 2008 12:30:00 EST. Please see our terms for use of feeds.

Mexico's Supreme Court has ruled that Wal-Mart de Mexico, also known as Walmex, violated the country's constitution by paying workers, in part, in vouchers only redeemable at the store. Walmex is a wholly-owned subsidiary of Wal-Mart Stores Inc. (NYSE: WMT).

That's right: Wal-Mart was trying to pay its workers with gift cards. That sounds bad but it's really not quite as messed up as it seems. The Wall Street Journal reports (subscription required) that "the retailer said the program was voluntary, and designed to help our employees acquire basic necessities." It went on to explain in the statement that under the program, "Walmex would put store credit on electronic cards and the employees could contribute a matching amount."

Here's what I don't understand: if the company wants to offer employees the option of being paid with store credit -- and employees want to take advantage of the offer -- whose rights are being violated?

The reality is that Wal-Mart offers compelling values on household items and, for many low-income workers, the chance to receive a portion of earnings in store credit would be a good opportunity. If it isn't, they don't have to take it!

I'm not sure why the courts needed to get involved here.

Mexico Supreme Court to Wal-Mart: You can't pay workers with gift cards originally appeared on BloggingStocks on Sat, 06 Sep 2008 15:10:00 EST. Please see our terms for use of feeds.

Best Buy gives out gift cards to atone for HD DVD's failing originally appeared on BloggingStocks on Fri, 21 Mar 2008 12:30:00 EST. Please see our terms for use of feeds.

Sharper Image gift cards null and void originally appeared on BloggingStocks on Tue, 04 Mar 2008 17:33:00 EST. Please see our terms for use of feeds.

For years, rising home prices and home equity loans helped people with stagnant incomes to keep up with record food and energy prices. With the collapse of the real estate market, it was beginning to look like there was nothing to take up the slack. But this morning, CNNMoney reports, Wal-Mart Stores Inc. (NYSE: WMT) customers who received gift cards over the holidays are using them for "food and consumables rather than discretionary purchases."

If that's really true, rather than a convenient excuse for a less-than-perfectly managed retail store experience, then it tells us that the U.S. economy is in a heap of trouble. That's because a consumer who uses gift cards to buy food instead of gifts is one that is running low on options. Compared to getting money from a pawn shop, a gift card is a compelling way to pay. But once that gift card runs out -- and it probably can't buy more than a month or two of groceries, then what?

Continue reading Can Wal-Mart gift cards take up the slack where home equity left off?

Can Wal-Mart gift cards take up the slack where home equity left off? originally appeared on BloggingStocks on Thu, 07 Feb 2008 13:00:00 EST. Please see our terms for use of feeds.

'Tis the season to shop for just the right gift card. While gift cards may be a good deal for consumer recipients, depending upon state laws and company policies, gift cards may have a short-term downside for investors. As gift card giving becomes more popular, the liability problem of what to do about unredeemed gift cards grows as well. In some states, the value of an unused or partially used gift card must be turned over to the state as unclaimed property. The value of the gift card stays on the company's books as a liability. According to a recent article in CFO Magazine, 27% of all gift cards go unused, and perhaps as many as 50% are used only partially.

In states that do not have unclaimed property laws that apply to gift cards, companies must develop their own policies as to when an unused gift card can be moved over to operating income on the balance sheet. This transfer is called "breakage." There is currently no SEC regulation on breakage, so investors need to scan company balance sheets to determine the amount of rbeakage, which can be large. Ruth's Chris Steak House (NASDAQ: RUTH) claimed $2.2 million in breakage as operating income, dwarfed by the $39 million in breakage Best Buy (NYSE: BBY) transferred by analyzing historical patterns of gift card usage. Best Buy determined that after two years, an unused gift card is likely never to be used and can come off the liability side of the equation. Ben Bridge Jeweler, owned by Berkshire Hathaway (NYSE: BRK.A), has little problem with breakage. Most of its customers are only too happy to use their high value gift cards very promptly.

Gift cards: good or bad for investors? originally appeared on BloggingStocks on Tue, 04 Dec 2007 13:22:00 EST. Please see our terms for use of feeds.

On the Periodic Table of Elements, the symbols Kr, Ne, He stand for krypton, neon, and helium, three of the so-called noble gases. Noble gases are chemically stable, and can be easily overlooked because they are colorless and odorless. They have boiling and melting points that are close together, meaning that they have a very narrow range of temperatures at which they are liquid. And noble gases have industrial applications in lighting, welding, and lasers.

On the New York Stock Exchange, KR, NE, and HE stand for Kroger, Noble, and Hawaiian Electric Industries. Do these companies exhibit similar characteristics of stability, a tendency to be overlooked, and scarce liquidity? Well, no analogy is perfect, especially one as arbitrary as this. But here's a look at these stocks nonetheless.

Cincinnati-based Kroger Co. (NYSE: KR) is the largest traditional grocery chain in the U.S. (though Wal-Mart is the largest seller of groceries). Kroger has more than 2,400 supermarkets under several different names, as well as more than 750 convenience stores.

Continue reading Three 'noble' stocks: Kroger (KR), Noble (NE), and Hawaiian Electric (HE)

Three 'noble' stocks: Kroger (KR), Noble (NE), and Hawaiian Electric (HE) originally appeared on BloggingStocks on Sun, 02 Dec 2007 12:40:00 EST. Please see our terms for use of feeds.

Cyber Monday -- today's marketing gimmick to get people to buy holiday gifts online in the wake of last week's Black Friday -- is expected to generate $4.8 billion worth of e-commerce. According to the New York Times, Doug Hart, a BDO Seidman analyst expects today's Cyber Monday sales to account for 12% of the $39 billion in online revenue this holiday season -- almost as much as the 15% share of holiday sales recorded by bricks and mortar retailers this Black Friday.

Cyber Monday often features online discounts. For example, in 2006 Ice.com, an online jeweler, offered a 20% discount on 15 items on Cyber Monday. RalphLauren.com, a unit of Polo Ralph Lauren Corp. (NYSE: RL) recently had a pre-Thanksgiving 40% off sale which ended November 19th. I received a $200 gift card for my birthday and when I tried to use it after learning from the gift giver of the sale that morning, RalphLauren.com could not verify its value. When I called its customer service line, RalphLauren.com told me that the gift card was worthless.

I notified the gift giver who called RalphLauren.com whose customer service person, Marlon, called me and told me he would take care of the problem that day and get back to me so I could use the card to take advantage of the 40% off sale. Marlon did not call me back, so late that afternoon I called in to customer service -- mentioning Marlon's name (she did not know who Marlon was) -- and was told that I should ask the gift giver to return to wherever he got the card and try again.

Continue reading $4.8 billion Cyber Monday and how RalphLauren.com cost me a birthday present

$4.8 billion Cyber Monday and how RalphLauren.com cost me a birthday present originally appeared on BloggingStocks on Mon, 26 Nov 2007 12:38:00 EST. Please see our terms for use of feeds.

$8 billion in unused gift cards! originally appeared on BloggingStocks on Wed, 10 Jan 2007 12:05:00 EST. Please see our terms for use of feeds.

Unused gift cards = $millions in profit originally appeared on BloggingStocks on Wed, 20 Dec 2006 11:11:00 EST. Please see our terms for use of feeds.

A great retail margin booster: Unused gift cards originally appeared on BloggingStocks on Tue, 19 Dec 2006 15:22:00 EST. Please see our terms for use of feeds.

Continue reading Starbucks gift cards use: hedge against brokeness?

Starbucks gift cards use: hedge against brokeness? originally appeared on BloggingStocks on Tue, 05 Dec 2006 11:55:00 EST. Please see our terms for use of feeds.

Gift cards go into overdrive this season originally appeared on BloggingStocks on Mon, 27 Nov 2006 18:46:00 EST. Please see our terms for use of feeds.