Gift Card Blog - ScripSmart

Oregon Cash Back Law For Gift Cards - Effective January 1st, 2012

June of last year, Oregon passed SB 756. In short, it requires all gift cards which are sold to be redeemed for cash if the balance is $5 or less and the gift card has been used at least once. The effective date of this legislation is January 1st, 2012.

I'm a fan of seeing cash back laws. The fact is, a consumer should not be required to spend more than the balance of a gift card in order to receive the full benefit and just 3.6% of store-issued gift cards offer a cash back option unless required by law. Because so few retailers offer a cash back policy, you can expect to see more states enact similar legislation in the future.

Not Retroactive, 2011 Christmas Gifts Are Exempt

This change to Oregon Gift Card Law is not retroactive. In other words, all of the gift cards purchased prior to January 01, 2012 are not covered by the new law. So if you received a gift card for christmas this year the merchant is not required to give you cash back. This is only for gift cards sold on January 1st, 2012 and moving forward.

Oregon Got It Right

There are several states with Cash Back Laws. The laws vary slightly, but I think a $5 threshold is reasonable for both consumers and businesses. Thankfully the legislators in Oregon decide to make this rather simple. However, the legislators in Massachusetts did a poor job of crafting a law which is easy for everyone to understand and, in turn, comply.

Massachusetts General Law Part II Title II Chapter 200A, Section 5D reads:

"A purchaser or holder of a gift certificate which, by its terms, prohibits the purchaser or holder from adding value thereto and which has been redeemed for at least 90 per cent of its face value shall make an election to receive the balance in cash or continue using the gift certificate. A purchaser or holder of a gift certificate which, by its terms, authorizes the purchaser or holder to add value thereto and which has been redeemed in part, such that the value remaining is $5.00 or less, shall make an election to receive the balance in cash or continue using the gift certificate."

That's a mouth full and not very easy for consumers or business owners to understand. I'm not sure why the notion of adding value would even be a factor. Furthermore, adding a percentage in the mix just seems to over complicate the situation. In short, a gift card is redeemable for cash if:

1. The gift card is not reloadable, has been used at least once and the balance is less than $5

2. The gift card is not reloadable and at least 90% of the funds have been redeemed.

For more detail, take a look at ScripSmart's full list of cash back laws for gift cards for each state. Cheers to Oregon's legislators for getting this one right.

Dish Network Gives Gift Cards Another Black Eye With New Blockbuster Gift Cards

This morning, I noticed Blockbuster had started selling gift cards, again. At first, I was excited at the possibility of all those worthless Blockbuster Gift Cards gaining their value back. Perhaps DISH Network Corp. had come around and done the right thing by choosing to accept gift cards issued before it's acquisition of Blockbuster earlier this year; it would be great for consumers and was long overdue.

DISH Network: A New Low

Unfortunately, DISH Network Corp. is still acting in a very selfish manner by choosing not to accept the old Blockbuster Gift Cards and they've just made things a lot worse by issuing new gift cards with the same brand less than a year after all the "old" Blockbuster Gift Cards became worthless. Furthermore, there is no mention on the company's website of the old vs new blockbuster gift cards. Blockbuster has chosen to ignore the matter all together in that regard.

Bad For The Gift Card Industry

DISH and Blockbuster's decision to start selling gift cards is terrible for the gift card industry, an industry known for getting bad press.

A company going out of business, and consequently it's gift cards becoming worthless is not even as bad as this situation. That's because:

• It's completely avoidable: Blockbuster has actively selected to purse this strategy. 
• It's very confusing: issuing gift cards with the same brand less than a year after millions of dollars was wiped out of consumer's pockets is horrible. 
• Nothing will make consumers fell cheated more than being denied of redeeming an old Blockbuster Gift Card while the company sells it's new Blockbuster Gift Cards at the same point of sale counter.
• It's scenarios like this which result in more legislation aimed at regulating the gift card industry.

Make No Mistake

From time to time you'll hear people say something like: "A few bad apples give the gift card industry a bad name." Make no mistake about it, DISH and Blockbuster are two of those bad apples. Not once, but now twice. I wish the Blockbuster's Leadership Team would think a bit more before acting so selfishly and giving the gift card industry a second black eye.

Announcing ScripSmart's Gold Gift Card Score Badge

I'm happy to announce a new badge color for gift cards on ScripSmart: Gold. In short, this new badge will be the highest rank possible for a gift card. Gift cards with Gift Card Scores of 90 or more will be awarded the Gold Gift Card Score Badge.

Before today:

After today:

In words, we've split up the old green badge classification to make room for the gold badge at the top. Gift cards scoring between 80-89 will still receive the a green badge. There has been no change to ScripSmart's scoring algorithm.

Why We Did It

Gold is synonymous with first place, crème de la crème or best of the best. When browsing ScripSmart for the best gift cards, it was easy for consumers to know green was the highest level possible because we frequently display a Gift Card Score Key; however, outside of ScripSmart, it's not as clear. After all, there's no comparison of colors and let's be honest, green is not synonymous with first place.

The original notion of ScripSmart's color scheme had more to do with the colors of a stoplight than anything else. Our goal remains making gift cards easy for consumers to understand and the new gold classification helps us achieve this goal.

There is also a big difference between a Gift Card Score of 80 and 99. Furthermore, it's helpful to identify those who are a cut above the rest. If a gift card scores in the 90's it's one of the most consumer friendly gift card products available and it's less likely to have any gotchas a consumer will encounter.

I also believe the new gold badge will help make it easier for merchant's to adopt and strive for a gold ranking. While not every gift card will every be a perfect 100, I believe ScripSmart's product reviews give gift card issuers important feedback as to how their program compares with others.

Gift Card Score Everywhere

In the end, your going to start seeing Gift Card Score in more places. It will help consumers make better decisions and, in turn, improve the gift card industry for both consumers and merchants.

Cinemak has been an early adopter of embracing their Gift Card Score. The Cinemark Gift Card is a terrific program. Earlier this year, they let other know if by placing their Gift Card Score directly on their website using a widget ScripSmart developed. It's a small snippet of code which always reflects their current Gift Card Score. It's something ScripSmart provides to gift card issuers listed on ScripSmart free of charge and I'd say it demonstrates a commitment to deliver a gift card program which is consumer friendly.

Bass Pro Shops has also been an early adopter of Gift Card Score. They're going to be the first to display their Gift Card Scores in-store at locations nation wide. Bass Pro Shops truly understands the importance of offering a consumer friendly program and by displaying their excellent Gift Card Scores, with their help ScripSmart in well on it's way to accomplishing our mission of making gift cards better.

American Airline's Chapter 11 Bankruptcy: Use Your Gift Cards

Yesterday, American Airlines filed for Chapter 11 bankruptcy protection. Those who added the American Airlines Gift Card to their ScripSmart Account received a bankruptcy alert via email suggesting they redeem their gift card as soon as possible. It's an easy way for ScripSmart to help consumer avoid worthless gift cards. (You can create your free account here.)

It's never good to see a bankruptcy and for gift cardholders, it serves as what may be their last signal to use a gift card before it becomes worthless. The fact is, most companies continue to honor and sell gift cards after filing for bankruptcy protection. It's also true many company's emerge from Chapter 11 in a better financial position to serve consumers for years to come and continue accepting gift cards. However, when a merchant files for bankruptcy protection, there is a much greater risk it's gift cards will become worthless.

We don't need to look back far to see two Chapter 11 filings from large national merchants result in worthless gift cards. Blockbuster filed for Chapter 11 in November 2010 and it's gift cards were worthless in April 2011. Similarly, Borders filed Chapter 11 bankruptcy protection in February 2011 and it's gift cards were worthless in September 2011. The bottom line is, there a very real possibility of a gift card becoming worthless and gift cardholders don't need to risk it. Unlike most creditors, they hold a loan which can be redeemed for merchandise at any time.

As a result of the bankruptcy, both American Airlines Gift Cards are currently ranked "Buyer Beware" by ScripSmart:

Proper Disclosure

Often times when a company files for bankruptcy protection, gift cards are not mentioned on their website or press release. However, there are companies which specifically address gift cards. Thankfully, American Airlines is one of those companies. On their website this morning I noticed a prompt stating gift cards would still be accepted. I reads:

"American Airlines is continuing to sell and honor AA Gift Cards as usual.American is flying normal schedules and all customer programs are continuing as usual.Additional information about the Chapter 11 reorganization is available at www.aa.com/restructuring."

The company also has constructed a webpage dedicated to the restructuring which also addresses gift cards. Both are great to see from my perspective and help relay important information to consumers. I'll add, if you own an American Airlines Gift Card, use it before you lose it.

3 Things Consumers Get About Gift Cards That Consumer Experts Don't

Black Friday is fast approaching and the chatter around holiday gift card giving is picking up. While there are some helpful and productive pieces published by the media this time of year, many fall short of offering solid gift card advice for consumers.

There's a disconnect

One thing is clear, most consumer experts don't like gift cards; meanwhile, most consumers like gift cards. A disconnect between the advice of consumer experts and the preferences of consumers is nothing new; however, it's time for many experts to take another look at the gift card advice they are giving to consumers.

Before I begin, at ScripSmart we both identify and develop solutions to the pitfalls of gift cards. Gift cards are not perfect; from ScripSmart's list of gift cards to avoid to our rating system, Gift Card Score; ScripSmart frequently points out the downsides of gift cards.

That written, some of the advice out there is simply not helpful for consumers and at times it's flat out wrong.

Disconnect one: Gift cards are popular with gift givers, not gift receivers.

This type of story often implies the notion of gift cards being an easy way out, impersonal and often a last minute decision. In short, the only reason gift cards are popular is because it's convenient for the gift giver and if you give a gift card you're doing the recipient a disservice.

The reality is most consumers like receiving gift cards. According to a the National Retail Federation's 2011 Annual Holiday Survey, gift cards are once again the most requested gift with 57.7% of survey respondents indicating they'd like to receive a gift card for the 2011 holiday season.

Here are the results for the past eight years, as you can see gift cards are actually gaining in popularity:

Naturally, there are people who don't like to receive gift cards, but I think it's important to let the gift giver discern whether a gift card is appropriate for their recipient.

Disconnect two: A wise alternative to a gift card is cash. 

According to this line of reasoning cash has no strings, no fees and can be redeemed anywhere. Therefore, it's a better gift than a gift card and should be used in lieu of gift cards.

The truth is, cash is not always a viable alternative to a gift card. For example, one might feel a bit uncomfortable by giving their child's teacher cash to show appreciation during the school year. On the other hand, a Target Gift Card seems quite appropriate.

Personally, I love cash and it can make a great gift. However, when it comes to giving consumers gift card advice, telling people to "give cash, not gift cards" is a bit like telling people to never use credit cards when offering credit card advice. While the advice will certainly achieve a desired result, it's just not very helpful to most looking for advice on the subject.

Furthermore, Gift Cards aren't just for gift giving. Retailers are continually using gift cards as a way to compensate consumers. Walmart, Amazon, and Apple are just three of many. In other words, gift giving is just part of the gift card story. Consumers are obtaining gift cards form a number of sources.

Disconnect three: Gift cards should be avoided because some are never redeemed.

I've seen estimates claim as little as 5% to over 25% of gift cards go unredeemed each year. Under this line of thinking, there is a good chance the gift card you buy will never be used, so think twice before you waste your money on a gift card.

I'm of the belief consumers are pretty smart and don't like to waste money. Ironically, not wasting money is a big part reason gift cards are so popular: we all hate receiving unwanted gifts; worse yet, we hate giving unwanted gifts. Ultimately, people feel the money placed on a gift card has a better chance of being used wisely than if they simply pick a gift for the recipient.

Gift cards have their place

It turns out they have a pretty big place in our culture of gift giving. According to the Tower Group, an estimated $100 billion in gift cards will be sold in 2011.

While there are certainly occasions where a gift card is not an appropriate gift, it's important to recognize not all gift cards are created equal, not all gift cards are bad and most consumers are capable of determining whether or not a gift card is appropriate.

I'm off my soapbox. What do you think?

Both Dippin Dots, Filene's Basement File For Bankruptcy Protection

Consumers who own a Dippin Dots eGift Card or Filene's Basement Gift Card should go out and redeem ASAP. Both companies filed for Chapter 11 bankruptcy protection this week.

Dippin Dots offers consumers an eGift Card which is accepted an all 142 locations. The company's "ice cream of the future" might soon become a thing of the past. According the Wall Street Journal, the Dippin' Dots, Inc. owes Regions Financial Corp. $12 million and has resorted to bankruptcy protection in order to avoid foreclosure. It appears Dippin Dots will continue to fight another day. Hopefully the company can emerge from bankruptcy and continue honoring gift cards.

Filene's Basement, on the other hand, will be closing it's doors for good. I sent in a note to confirm gift cards would be accepted during the liquidation process, but have not heard back. The historical discount retailer, founded in 1909, has 21 locations primarily in the Northeast.

 

 ScripSmart Accounts Help You Avoid Worthless Gift Cards

ScripSmart will send you helpful alerts for gift cards you own. From a handy monthly summary of the value of your gift cards, to bankruptcy alerts when a company in in jeopardy of going under. It's easy, just register your gift cards with ScripSmart and configure the alerts you'd like to receive. Create an account here.

New Feature: Share Your Favorite Gift Cards

I'm excited to announce a new feature on ScripSmart: Favorite Gift Cards.

The holiday shopping season is fast approaching. November is less than a week away! As of today, you can mark a gift card as a 'favorite' and share the list with family and friends.

Why I Love This New Feature

The concept of creating a wishlist has been requested several times from our users. It's a logical addition and fits into ScripSmart's mission of simplifying gift cards. Simply put, if people are given a gift card they like, there's a better chance they will redeem it and avoid loosing value from post-sale fees, a bankruptcy or misplacing the gift card. By creating a favorites page on ScripSmart to be shared with others, you'll make it easy for them to find the right gift card for you.

Super Easy To Use

Marking a gift card as your favorite is easy, just click on the 'Mark As Favorite' button when looking at a gift card on ScripSmart.

And the gift card will be added to your favorites!

Your favorites page can easily be shared with friends and family. Naturally, you'll have to have a ScripSmart account to create your favorites page, so sign up here.

Walmart Uses Gift Cards For Christmas Price Guarantee

As part of the Walmart's Christmas Price Guarantee campaign, the company will issue gift card to consumers instead of cash. The program starts November 1st, 2011 and runs through Christmas Day. In short, if you purchase an item at Walmart and find it for less, they company will issue a Walmart Gift Cards  for the difference. Check out the full details here.

A Growing Trend: Gift Cards Not Just For Gifts

I've written about the trend of merchant's using gift cards to compensate consumers before. This is another example of a company leveraging it's gift card program in a nontraditional way. There are several reasons why companies like to offer consumers gift cards instead of cash. Here are three reasons:

1) Walmart knows where the money will be spent.

2) Gift cards bring consumers back to the store at a later date.

3) Often consumers spend more than the gift card's balance.

In the future, you can expect to see gift cards used for more than just gift giving. In fact, I recently received a $5 Target Gift Card for making a purchase at Target. Basically, instead of needing to use a $5.00 off coupon, I paid full price for the product and received my gift card at the checkout counter.

3 Reason To Frequently Check The Balance Of Your Gift Card

When reviewing and scoring gift cards for ScripSmart, we like to see multiple options for checking the balance of a gift cards. From  online, by phone to in-store, the more options the higher the Gift Card Score. The fact is, making it easy for a gift cardholder to obtain their balance is an important component of providing a consumer friendly gift card program.

Here are 3 why you should frequently check the balance of your gift card:

1. Motivation To Redeem

We recommend keeping the total value of gift cards you have unredeemed to a minimum. By knowing the balance of your gift cards, you just might find that extra push to get out there and use them. The difference between having a $10 gift card to Starbucks on your iPhone and $450 worth of gift cards from 5 different merchants sitting in the drawer is huge.

2. Avoid Post-sale Fees

If there are post-sale fees, they are often deducted monthly and in amounts less than $5 per month. If you're holding on to a gift card and see a fee was deducted, you'll catch it right away and have the opportunity to redeem before another deduction reduces your balance. Those with visa gift cards should especially take note of this point.

3. Avoid Gift Card Fraud

A good friend recently told me a story of the remaining balance of their gift card mysteriously disappearing. In short, they used a portion of the gift card's balance and when they went back to use the remaining portion it was gone. It turns out the server of the restaurant gave themselves a $20 tip! If there should be value remaining after you use a gift card, always check the balance to ensure it's accurate.

Do You Have A Lot Of Gift Cards?

If so, you need a little help getting the motivation to redeeming your gift cards. The good news is you're in luck: ScripSmart offers a free account system which allows you to register gift cards you own and, in turn, receive helpful alerts. One such alert is a monthly summary of the gift cards in your account. We also offer 'nag-me' alerts which bug you into redeeming those gift cards ASAP. Create your ScripSmart accoutn here.

eGift Cards On ScripSmart Are Now Easier To Spot

When most of see an egift card option for a gift card, we simple think it's the same as a regular plastic gift card, only delivered by email. However, it's rather common for a company's virtual offering to have  different terms and features when compared to it's plastic counterpart.

For example, the DSW eGift Card is not redeemable in-store however it's plastic counterpart the DSW Gift Card can be use both in-store and online. That's an important detail and something every person should know before making a purchase. The DSW is just one of many examples and as a result, ScripSmart scores 'gift cards' and 'egift cards' as separate products with seperate Gift Card Scores.

Up to this point, ScripSmart has simply labeled a traditional plastic gift cards a 'Gift Card' and electronically delivered gift cards an 'eGift Cards'. For example there is both an Amazon Gift Card vs an Amazon eGift Card. However, simply labeling the card type is not enough to distinguish between egift cards and traditional plastic gift card reviews while browsing of ScripSmart.

The fact is, most of us simply look at the image of the gift card. For example, if you were looking for at the Christmas gift card category in ScripSmart, you'd see both egift cards and traditional plastic gift cards displayed and most of the web page is covered by images of gift cards. 

The Solution

Moving forward, egift cards on ScripSmart will be identifiable by three traits:

1) An @ symbol will be placed on each gift card image. We're using the @ symbol because most egift card are delivered via email.

2)  The product image will have square corners and traditional plastic gift cards will have rounded corners. 

3) It will still carry the label 'eGift Card' or 'Gift Card' in the product's name.

Below is an example, you should be able to distinguish the difference, now just by looking at the image of the product.

Yes, the image on the left is an eGift Card.

Hopefully, this makes ScripSmart just a bit easier for you to use. If you have thoughts or suggestions on how to make ScripSmart better, simply contact us to share your thoughts!

Do you think this is a good change for ScripSmart?