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« Conceal vs. Reveal | Main | Great job for the right person »

The $8 billion story/scam

In case you had any doubt that human beings are irrational creatures, driven by stories, consider the case of the gift card.

Christmas has become a holiday about shopping, not about giving. Case in point: the $100 gift card, now available from banks, from stores, even in a rack at the supermarket.

Last year, more than $8,000,000,000 was wasted on these cards. Not in the value spent, but in fees and breakage. When you give a card, if it doesn't get used, someone ends up keeping your money, and it's not the recipient. People spent more than eight billion dollars for nothing... buying a product that isn't as good as cash.

Along the way, we bought the story that giving someone a hundred dollar bill as a gift ("go buy what you want") is callous, insensitive, a crass shortcut. Buying them a $100 Best Buy card, on the other hand, is thoughtful. Even if they spend $92 and have to waste the rest.

The interesting thing about stories is that the inconsistent ones don't always hold up to scrutiny. Consumer Reports and others are trying to spread a different story. One that sounds like this:

Gift cards are for chumps.

If enough people talk about this new story, people will be embarrassed to give a gift card. It's a waste. It's a scam. It's a trap for the recipient.

The irony is that the gift card companies could easily spend, say, half the profits and create a wonderful, better story... where every $100 gift card also generates two or three dollars for a worthy cause. That would resonate with a lot of people... But I think it's unlikely.

If I were a creative non-profit, I'd start marketing alternative gift cards. They would consist of PDF files you could print out and hand over to people when you give them cash. It could say,

"Merry Christmas. Here's your present, go spend it on what you really want. AND, just to make sure we're in the right holiday spirit, I made a donation in your name to Aworthycause."

Stories come and go. It's up to marketers to spread the good ones.

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Listed below are links to weblogs that reference The $8 billion story/scam:

» Holiday Gift Cards - For Chumps? from South Bay Chat
I've always thought it was funny how it is viewed as more thoughtful to give a gift card versus giving cash...I read this today and totally agree. You can read for yourself below: -- In case you had... [Read More]

» Christmas - the holiday ofstuff from Mommy CEO
Last year after the holidays my husband and I decided we need to change our holiday focus and do something drastic. I call last year the garbage holiday. I come from a large family (I have 3 sisters and one brother) and some very close co... [Read More]

» Christmas - the holiday ofstuff from Mommy CEO
Last year after the holidays my husband and I decided we need to change our holiday focus and do something drastic. I call last year the garbage holiday. I come from a large family (I have 3 sisters and one brother) and some very close co... [Read More]

» Seth Asks, What's With Gift Cards? from achievable ends
When you give a card, if it doesn't get used, someone ends up keeping your money, and it's not the recipient. ... Along the way, we bought the story that giving someone a hundred dollar bill as a gift ("go buy what you want") is callous, insensitive,... [Read More]

» The Gift Horse's Mouth from Clearing Up The Confusion
This post is one of the reasons I love reading Seth Godin's stuff. As he once said in a lecture I attended, he doesn't so much come up with brand new stuff, but he's pretty amazing at putting the piec... [Read More]

» 'Tis the Season to be Wary... from Solutions Talk
Today's Notable Quote: Gift cards are for chumps. - from Seth Godin in his blogpost entitled The $8 billion story/scam This post is worth sharing, linking to, reading and passing along. Carefully consider the wisdom of this well-intentioned riff before [Read More]

» links for 2007-11-16 from hatch.org
Seth's Blog: The $8 billion story/scam Seth Godin writes how 8 billion dollars worth of gift cards seeps through the cracks each year. (tags: ecommerce economics christmas marketing retail) Amazon Opens Affiliate Access to MP3, Unbox, OpenSocial and R... [Read More]

» Gift cards are for chumps (don't be one) from discarded lies - hyperlinkopotamus
Gift cards are for chumps (don't be one) [Read More]

» .Gift Cards Are a Bad Deal from Four (or Five!) Reasons Why
1. A lot of gift cards are never used - 25%, according to Consumer Reports, People get them as gifts and either forget to use them, lose them or let them expire. Meanwhile, retailers rack up millions of dollars in interest. Seth Godin suggests $8-bi... [Read More]

» Seth Godin on The $8 Billion Gift Cards Story /Scam from Famous Quotes - Famous Sayings
Seth Godin Quotes Along the way, we bought the story that giving someone a hundred dollar bill as a gift (go buy what you want) is callous, insensitive, a crass shortcut. Buying them a $100 Best Buy card, on the other hand, is thou... [Read More]

» Gift Cards from The Rhetoric
Tis the season for buying people a bunch of crap they didnt already buy for themselves becausewellits crap.  Im surprised Christians dont skip Christmas to protest the fact that marketers have stolen th... [Read More]

» Guilt Farming: A counterpoint to Seth Godins post about the gift card scam from Connection Paradigm
Seth Godin wrote about the gift card scam: Along the way, we bought the story that giving someone a hundred dollar bill as a gift (go buy what you want) is callous, insensitive, a crass shortcut. Buying them a $100 Best Buy card, on the ... [Read More]

« Conceal vs. Reveal | Main | Great job for the right person »