Grief Certificate

Here is a picture of a gift certificate. Give it a minute to download. It is a fine resolution image taken with a Leica Digilux 4.3 camera. Have a good look because I'm going to rant about it for a while.

  

I'm listening to my son cry as I write this. Babbages is a mall store here in Portland that carries scale model kits that he has been looking for since September. He told his grandmother this and, surprise, he got this gift certificate for Christmas. So today he goes to the Babbages store, select $24.98 worth of models and try to buy them with the certificate. It doesn't work. The certificate may have cost Grandma $25.00 but as pictured it isn't worth a whit.

Do you see why? Look closely. Read the fine print. My son didn't and he got burned. The fine print says, "Good for merchandise only." Then it adds, "Not valid without attached receipt." My son didn't have the receipt. Live and learn, I guess, but consider this ...

So now my son is writing the president of the company. The models sit unopened on the kitchen table. (Mom covered him but asked that he ultimately pay her back.) I'm wondering what kind of theft problem Babbages has that they've solved at the expense of my son. I'm also wondering just how often this happens. Why does anybody buy gift certificates anyway? How do companies account for the extra money at the end of the year? Is it a lot? I bet it is. -- WardCunningham


Mmmm, yes, it is bogus. The way the amount is just pencilled in on the certificate is probably why they require the receipt as well. One of the best gift certificates is the credit card version you get at BarnesAndNoble?, but you can't tell what the balance left on it is though. I bet stores make a ton of money on gift certificates.

Actually, you can call an 800 number to find out what your balance is. A nice automated system, but after 18 months they start "stealing" $1.50 a month


This incident makes me mad. It also reminds me of the time a group of us were charged sales tax on some gift certificates -- and then later found out the recipients were also charged sales tax!

If Babbages has a theft problem, it's obviously inside jobs: how many people can counterfeit a red-and-green printed certificate, but not a standard cash-register receipt?

In any event, if it were my son (a pause while all shudder at the thought of me in charge of raising a well-adjusted child...), I'd take the opportunity to turn the experience into a civics lesson. Specifically, I'd encourage him to be the first kid in his class to correspond with the Oregon Attorney General. AGs love stomping on shenanigans like this: they get to send out checks to voters, with their name on an accompanying letter, which is the closest you can get to buying votes for higher office these days. (You may want to leave that last bit until after the lesson about cynicism.) --GeorgePaci


I suppose the seller of the gift certificate expects the recipient to make a purchase somewhat over the face value of the certificate (people like Ward's son, who ease the total up to $24.98 are exceptional). The same essential trick lies behind coupons. Oh, how much thinner the Sunday paper would be without those darned things. People laugh at me for refusing to use them.

Many gift certificates are probably never redeemed at all.

Are there well-known psychological studies that corporate marketers use to come up with these schemes? For instance, how much does the fast-food outlet save by forcing customers to beg for their catsup? Extremely timid people will eat their fries without sauce rather than ask. --TimVoght
About 10% of all men have some colorblindness, usually only a little colorblind. In contrast, less than 1% of women are colorblind. The most common deficiency is in identifying darker reds or greens with low saturation in close proximity, so I suspect this particular color combination was chosen intentionally for the gift certificate.

Though I am already aware my vision suffers from a slight color deficiency and generally am not bothered by it, I didn't notice there was any fine print myself until I read the description! Even more troublesome is the fact that I can easily identify the top portion as red, but I still cannot read the text at the bottom unless I apply a -15 degree (or +15 degree) color-involution filter to the image. Actually I was not convinced the red of the text and the red of the oval were the same color until I compared the hue angles.

15 degree counterclockwise color rotation:

30 degree counterclockwise color rotation:

Does the manager of the store really believe that your boy purchased a stolen gift certificate from a dishonest store employee, to save a few dollars? If the manager is unwilling to honour this certificate he sends out a clear message indicating low quality of customer service. A letter to the editor of your newspaper will also serve well to warn others to steer clear of this store altogether. --CarstenKlapp


My son's letter asked the chain's president to redeem his gift certificate. He received the following prompt reply from Laura Qualls of store operations ...

Thank you for your recent letter to Mr. De Matteo regarding an experience you had in one of our stores located in the Portland area. We appreciate you letting us know about the difficulty you had in using a gift certificate that you were given. A refund check for $25 should arrive at your address shortly. We want to make sure that the purchase that you had intended to make with the gift certificate is taken care of.

Ms. Qualls included an action figure as a gift and promised to look for ways to solve this problem for future customers. This is all we could expect. Still, we will think twice before giving gift certificates ourselves. -- WardCunningham


That's a terrible story, Ward (well, it's a great story, you know what I mean).

I do wonder what security problem it is that makes the store want to see the receipt. Especially what sounds like a fairly small store.

As it happens, just recently a friend and I were comparing some gift certificates (we don't get out much). The ones issues by Marks and Spencer in the UK are amazing documents. They are printed in various denominations, the ones I had were for �10. On close inspection they may be seen to have many of the security feaures one would expect to see on a banknote: microprinting, a watermark, windowed thread, intaglio overprinting, and engraving angled to mislead a scanner. Now why would a high-street retailer go to such trouble (and, presumably, expense) without a good reason? They must be afraid of fraud on a grand scale. -- KeithBraithwaite


Okay. If I can't see much difference between the contents of the two circles above, does that mean I'm mildly color blind?

It's not in the circles; it's in the pink-on-green printing on the bottom, where it says "Not valid without attached receipt." The two circles on the color chart are only an estimate to demonstrate the general regions of low-saturation reds and greens; one cannot infer any color-blindness from looking at this circle because it provides no meaningful context for the colours.

Ask an optometrist for a color-blind test or go to the local library to see a book with Ishihara color test plates. Most web-based colorblind tests are not accurate enough to draw any conclusions.


I love you guys ... I really do. Ward, you made my day today. This is a perfect wiki page.

And I appreciate your willingness to share your son's experience with his gift certificate. My guess is that some changes will happen at the store -- especially as upper management begins to realize exactly how many people are learning about this unfortunate episode and how badly it reflects on the store.

-- TomStambaugh


It looks like stupidity not malice to me.

For large retail chains, forgery of gift certificates is a major issue; hence the protections described by Keith Braithwaite above.

When I loaded this page, I immediately saw the picture and thought "Wow! What moron would produce a gift certificate like that? I could change the $25 to $125 so easily that I could try to pass it off as an accident if I got caught!". That is obviously why they demand the receipt as well.

What the major retailers do for a gift certificates is give you a greeting card with a pocket or something that can hold the certificate itself. The card provides the function which in this case was provided by the certificate (the "From Gran" bit), and the certificate provides the function which in this case was provided by the receipt. ("$25 was rendered to the company and exists as a credit to bearer"). In the greeting-card case, unlike this case, it is immediately obvious which document serves which function.

On a complete tangent, has anyone noticed that in the UK currently, you can buy a new paperback book for less than the cost of a greeting card? Think of a Wordsworth Classic edition as a �1 greeting card with a hundred or so pages of text in the middle for a free bonus. (You can buy greeting cards for less than �1, but not easily -- you have to shop around).

-- AndrewMcGuinness


For what it's worth, I'm not ColorBlind, but I couldn't read the disclaimer on the gift certificate. Maybe it's my monitor settings; then again, I also have visual processing issues that don't help things... --CodyBoisclair


Gift certificates are so bogus. It is just a swindle. To answer a question above, in Canada, according to my Bank, only about 80% of gift certificates are ever redeemed.

Banks will not even keep your gift certificates safe, let alone pay interest on them.

I am a small business owner (that is why the Bank cheerily lets me know what a great deal gift certificates are -- for the shopkeeper).

To keep things simple let's look at two dollar of *mine* if I am a merchant:

I buy stuff wholesale. With one of my dollars, I buy something and put it on my shelf at $2.00. That dollar turns into two dollars and over the next year (because I work on a credit line) it effectively earns me better than 10% interest. At the end of one year, that dollar is sitting in the bank and is worth $2.20

With the second dollar, I buy five 20 cent gift certificates. One never gets used, so I only have 80 cents that actually gets spent. I use that to buy stuff at retail. Even though I can buy the same stuff for 40 cents from my wholesaler, I can only redeem the certificates from the store that issued them. They are not money, after all, just a promise of *goods*. So, I spend my 80 cents on whatever junk that place has to offer. It has a nominal value of 40 cents, but if I want to exchange that stuff with the wholesaler for actually money, I will be selling at liquidation value, not wholesale value. Let's say the wholesaler is generous and actually pays me 30 cents for the stuff even though that is more than he would pay to his supplier.

So...

What I will call the 'money gift certificate' AKA cash is worth $1.10 at the end of the year if all I do is put it in the bank. It is worth $2.20 if I put in the work to convert it. It's good anywhere they accept money and the longer it takes me to spend it, the more it is worth.

What I will call the 'standard gift certificate' AKA swindle is worth $0 at the end of the year if all I do is put it in my drawer (they expire). It is worth $0.30 if I put in the work to convert it. It's only good at the place that issued it and only for a limited time or until the company goes out of business -- whatever comes first.

When a retailer sells you merchandise, he makes about 50 cents from every dollar you give him and he risks, up front, bringing in merchandise to do so. Net of costs, he makes about 20 cents or so.

When a retailer sells you a gift certificate, he only ends up supplying *eventually* things that cost him at a *maximum* 40 cents. (Remember, only 80% of that dollar gets redeemed.) However, this is not stuff he brought in and risked. This is stuff sitting on the floor already and rather than the merchandise above, its actual *value* to him is *less* than 40 cents. Really, for practical purposes, he makes about 70 cents from the gift certificate.

So, imagine you are an unscrupulous retailer or just 'retailer' (if they are selling you a gift certificate, they are unscrupulous). Here are your scenarios:

Somebody gives you a dollar, it becomes worth $2.20 Somebody gives you a gift certificate for a dollar and it becomes worth $.30

Somebody buys merchandise from you and you make 20 cents. Somebody buys a gift certificate from you and you make 70 cents.

It would be instructive to buy a gift certificate from one store and see what another will offer you for it in cash.

Anyway, this is why, even though gift certificates are the worst product ever, that you hear them touted all the time in commercials and sellers have tried desperately to convince you that they are good.

When you walk into a store to buy something, the retailer would *always* prefer to sell you a gift certificate. It costs him nothing, is free of risk, and has a healthy effective margin of margin of 70 cents per dollar. If you buy merchandise, he only makes 20 cents per dollar and he does that at a considerable risk.

Gift certificates are such an incredible swindle that they should simply be outlawed. Like lottery tickets, they are a tax on the stupid. -- BobTrower


See also ColorBlindness

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