When Store Credit Expires

by Mr. Cheap

When I was a kid a local convenience store offered a reward program that was a sheet that you got stamps to place on it (one stamp for every dollar spent). They said that the reward for a completed sheet would be announced later and started giving them out. Some friends and I started going to the store every night to buy a pop and a bag of chips, mainly to get a sticker on our sheet. I felt like I’d hit the jackpot when a man ahead of me one day looked at a long string of stamps he’d been given with disdain and offered them to me.

My mother found out about the sheet (and the nightly snack purchases) and told me what she thought of the whole thing (my mother is like Judge Judy, except she directs all her contempt at her children instead of white trash). Eventually the day of vindication occurred and they posted the prizes for complete stamps. The best of the bunch was half-price on a loaf of bread. I threw out my completed sheet.

Roger Williams wrote a great (supposedly) true story about his experiences gambling. One of his throw-away comments that I found quite interesting is that he was thankful he lost his first time at the casino, as it gave him a suspicion of gambling (and expectation that he’d lose), even after he’d had subsequent visits where he came out ahead. I think buying stock right before the high of the tech boom was probably good for me as an investor (it has me half expecting drops in value of 75%). This introduction to “reward points” made me suspicious of “Air Miles” and everything that has been offered to me since.

I’ll take lower prices or cash back at the end of the year thanks very much.

I found in most contexts, when a store offers you some sort of credit (up to and including prizes), you’re often the worse off for accepting it. Reward points, and other such loyalty programs, are designed to encourage us to spend more than we otherwise would at that location. Some people beat stores at their own game. Its damn hard to do.

The WORST game they play is when store credit expires. Either you buy a gift certificate or take some sort of foolish points or something, changing currency that can be used everywhere with no expiration date, for something that can only be spent at THAT STORE within a specific period of time. Bizarrely, we sometimes do the exchange on a 1-to-1 basis. I bought an aunt a gift certificate to a spa once and was horrified when they handed me the certificate and it had a 6 month expiry date on it. I asked them why it expired in 6 months, and their only explanation was “we found everyone would rush in to use it before the deadline when it expired after a year”. The solution of REMOVING the expiry date didn’t even occur to them.

A friend of mine has been filling out surveys, and usually does quite well at it. She recently got into a situation where a company gives her points that are expiring soon, and they don’t offer anything she wants. They’re going to lose a customer over it: why would she fill out surveys for them in the future? Its bad for the customer, and bad for them. It doesn’t even cost them anything to show her an ever increasing balance of “points”, and she may have kept filling out surveys hoping good prizes would show up later which makes it especially stupid on their part.

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{ 12 comments… read them below or add one }

1 Drew

Hey

I totally agree with you on the whole expiry on gift certificates issue. I remember hearing on TV that a huge percentage of gift certificates go unclaimed and simply expire. That means that those cards represent pure profit for the store. From the consumer point of view this makes no sense.

People don’t like giving cash as a gift as it seems like a cop-out, so they buy gift cards. However does a gift card really represent a gift that’s much more thoughtful? One things for sure; it’s certainly less useful.

2 Sean

Recently, in Ontario anyway, it’s become illegal to place an expiry on gift cards. or to charge fees for inactivity. I assume it’s the same for store credit, since it’s essentially the same thing. I guess to be sure, you could always insist that they place your credit on a gift card!

Reading: http://www.gov.on.ca/mgs/en/ConsProt/STEL02_170050.html, I found that there are a few exceptions. Interestingly enough they use the example of gift certificates for a specific service, like a massage at a spa.

This definitely highlights the importance to know your rights as a consumer before making a purchase/return.

3 Mr. Cheap

Drew: Yeah, you’re right. I could have given my aunt a hundred dollar bill and said “use this at the spa”, but that would have felt icky.

Sean: Years ago when I was in San Francisco, I saw that they had introduced similar legislation. I’m never too fond of government solutions to market problems, but I definitely don’t like it when gift certificates / cards have an expiry date.

4 Canadian Dream

I think the issue is we think giving cash is taboo, so we end up giving gift cards instead. But in reality it is more annoying to have the gift card. I think I’m going to start something new. Skip the gift card and go with cash. If you spend it on beer and popcorn so be it.

Tim

5 Potato

Yep, I’m trying to get over the cash stigma by calling it “the universal gift card”.

6 Four Pillars

I just give cash – I have no problems with that.

7 Meadow

When I left my last job, the staff had taken up a collection and bought me a gift card to a store I never frequent – probably because some of them liked the store, so thought this would be a nice gift for me.

Of course it’s the thought that counts – but still I regret their money was wasted on something I won’t get the good of. >sigh<

8 guinness416

In my family we’re all big on giving cash too, and always have been. I guess we’re just declasse paddies then.

9 Looby

@ Guinness- that must be it, because my family are all about cash too.
The best I ever saw was my friend sellotape a pound coin, a fifty pence piece and a 20 pence piece to a birthday card and write “buy yourself a beer”.
Perhaps I need to revisit this mode of gift giving…

10 Gene

Here’s an interesting NY Times article about the Gift Card Economy. I often refer my friends to it, since I think this topic is fascinating. It’s written by the authors of Freakonomics.

http://www.nytimes.com/2007/01/07/magazine/07wwln_freak.t.html

The US has a website where people can sell, buy and trade second-hand gift cards at a discount, called plasticjungle.com. Would love to see a similar service in Canada.

11 Aaron Stroud

A few years back, a local sports store was running a sale where you “saved more, the more you spent.”

It certainly didn’t work for me. I used it as an excuse to buy a few things I wanted (walkie talkies, etc) and I ended up spending far more than I would have otherwise. I also paid more for a few of the items. Ever since, I’ve been wary of “saving money” on sales.

12 Tax & Financial Planning

One thing that frustrates me is these “intorductory” pricing. The phone and cable companies are the worst.

Buy a bundle and save 30% for the first year! Why not just give me the whole discount and forget raming it up later?

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