December 25, 2008

Gift Cards

Do I have this right?
  • You buy me a $50 gift card from "Big Box Brand".
  • I buy you a $50 gift card from "Big Box Brand".
  • On Christmas Day, the tree is littered with mini-plastic-ads for "Big Box Brand".
  • On the day after Christmas, gift cards are redeemed for merchandise sold at 70% off of full price ... whereas the customer, sans gift card, would have paid 40% off of full price just two weeks ago, 25% off of full price on Black Friday, and 15% off of full price on November 1.
  • "Big Box Brand" gets a much-needed cash infusion, but takes huge inventory risk by not selling merchandise prior to Christmas, then not knowing how much merchandise will move in the days after Christmas --- and cannot record the sale until the customer redeems the gift card.
If we, as business leaders, were to invent commerce from scratch, would we draw it up this way?