One problem with gift cards has been that you can never get them cheap. Now, that has changed.
Worried merchants are offering bargains on gift cards to lure customers and encourage repeat business.
Costco, for instance, is offering five $20 Starbucks cards or two $50 Godiva cards for $79.99.
The company is also offering similar deals with local restaurants as well as ski resorts and local attractions in selected areas.
“It's a traffic builder for the issuer of the card, and ultimately, it makes sense to us if we can sell a bunch of them and create a better value for our members,” said Costco CFO Richard Galanti.
Galanti declined to say how the finances of the deals work, but said, “We're not losing $20. We don't sell things below cost.”
In a similar deal, CVS is offering shoppers with its loyalty card a $10 Extra Bucks rebate on the purchase of $50 in iTunes cards. Extra Bucks are redeemable like cash on a future purchase.
Retailers are even offering deals on their own gift cards, in programs where they pay 100 percent of the expenses. TGI Friday's restaurants will give you a $5 “Bonus Bites” gift card when you buy $25 in gift cards.
And people participating in its loyalty program get an $8 certificate for every $100 spent, including gift card purchases. That program was launched in July.
“It's all about increasing frequency of visits,” said Andrew Jordan, senior vice president of marketing for Friday's. “By giving a gift card, the guest provides an invitation to the recipient to visit Friday's. This creates new guests or brings back former guests. The giver receives a Bonus Bites card, which also prompts a return visit.
“So the purchase of one gift card could result in three visits.”
The promotions are enough to motivate shoppers such as Nancy Lischwe. The Cary mother of two teens was planning to take part in the CVS deal on iTunes cards.
“The way I see it, I would buy them anyway for the kids. I put them in their birthday cards or whatever. Even if I don't use them all now, I can save them for later.”