Does Macy’s or Best Buy have a better approach to gift cards?
By all indications, gift cards are a booming business. The National Retail Federation’s (NRF) 2021 holiday survey found 56 percent of respondents wanting a gift card as a present, up from 54 percent in 2020 and the most requested holiday gift for the fifteenth straight year.
In 2020, NRF found gift givers planning to purchase between three and four gift cards, with overall gift card spend expected to reach $27.5 billion, or about 3.5 percent of overall holiday spending. The cards also support non-holiday occasions. Blackhawk Network found that they have been more popular as birthday presents.
At Macy’s, the only gift cards available are those linked back to purchases at the retailer. Best Buy, in contrast, offers not only its own gift cards but those for Macy’s, Amazon.com and more than 150 other retailers, restaurants and entertainment businesses.
Macy’s is not alone in its approach. Other department stores and retailers, including Gap, T.J. Maxx and Williams-Sonoma sell only their own gift cards.
Best Buy promotes a wide range of cards near cash registers in stores in addition to offering an extensive selection online. Options include gaming cards (Xbox, Roblox, Nintendo), travel cards (Delta Air Lines, Hotels.com, Uber), movie/music cards (Netflix, Spotify, AMC) as well as more than 60 restaurants and retailers, including a potential competitor in Amazon.
Big box chains, grocers, drug stores and c-stores are best known for selling a wide variety of gift cards.
Both Target and Walmart offer a wide range of third-party cards but have a limited selection of retailer cards for competitive reasons, refraining from selling cards from Amazon or Macy’s. Walmart doesn’t sell cards from Home Depot and Lowe’s, but Target does. In softlines, both sell Nordstrom gift cards, but Walmart also offers Gap, Saks, Foot Locker and DSW.
Costco only offers four retail gift cards beyond its own: Build-A-Bear, Fanatics, Instacart and Jiffy Lube.
Most grocers sell gift cards from Target and Amazon, despite being food competitors. In 2018, H-E-B decided to pull Amazon from its gift card mix. The Texas grocer said at the time, “H-E-B does not merchandise the Amazon gift card due to limited space in a competitive gift card set where we are offering more local gifting options per customer requests.”
- Earlier Start to Holiday Shopping Season Embraced by Consumers – National Retail Federation
- NRF says 2020 holiday sales grew 8.3 percent despite pandemic – National Retail Federation
- Do retailers need to jump on the e-gift card bandwagon? – RetailWire
- Consumers Plan to Spend More and Gift More This Holiday Season According to Blackhawk Network 2021 Holiday Forecast – Blackhawk Network
- Best Buy Gift Cards – Best Buy
- Target Gift Cards – Target
- Walmart Gift Cards – Walmart
- Costco Gift Cards – Costco
- Amazon Gift Cards Participating Retail Store – Amazon.com
- Kroger Gift Cards – Kroger
- H-E-B No Longer Sells Amazon Gift Cards – Facebook
DISCUSSION QUESTIONS: Would you encourage retailers to sell only their own gift cards, offer a curated mix or sell as many gift cards as possible? What’s your view on selling gift cards from a direct or peripheral competitor?