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A new breed of gift certificates

In our November 2002 newsletter, we highlighted some promising pre-paid card initiatives. The town of Hudson, Ohio, US, came up with yet another innovative way of making use of these cards: the Hudson Gift Card, a pre-paid/debit card that is good in many shops in Hudson’s Main Street shopping district (source: The New York Times), and doubles as an entirely new breed of gift certificate. The card was developed by New Market Solutions, a systems integrator, specializing in ‘advanced card and identity applications’, in co-operation with the local Chamber of Commerce. The card’s dedicated website also offers pre-paid cards for kids, which may trigger the next innovation: pre-paid, coded pocket money that can’t be spent in the candy or liquor store, but will be accepted in the educational bookstore ;-). It’s no wonder Hudson’s Chamber of Commerce is eager to market gift certificates; this holiday season, gift certificate sales in the U.S. jumped 65% over the 2001 season (source: Boston Globe). Convenience makes them popular with consumers. Retailers love them for an entirely different reason: an estimated 10 – 40% of gift certificates are never redeemed, which means they can be booked as pure profit. Ka-ching! Needless to say, Springwise would not be surprised to soon see street, city, region or country specific pre-paid cards popping up in other parts of the world as well.