Time To Stop Mailing Fully-Activated Gift Cards?

Generic Christmas gift card CBS/IStockphoto

This column was written by Evan Schuman, the editor of StorefrontBacktalk, a site that tracks retail technology, e-commerce and security issues. Retail Realities appears every Friday. Evan can be reached at E-mail and on Twitter.
True story: A North Pole postal worker was indicted last week, accused of stealing Christmas gifts from the mail. The defendant is actually a postal worker in Fairbanks, Alaska, but the town she lives in is honestly North Pole, Alaska. But this story didn't catch our eye because of the image of one of Santa's elves turning Grinch-like. It was what she stole: Wal-Mart $25 physical gift cards being sent via snailmail.

This begs the question: Why are we still permitting the mailing of fully-activated gift cards? People aren't sending $20 bills in the mail anymore, so why are they still sending the plastic equivalent?

Today's gift cards are quite different from those of just five years ago. Target, for example, is now accepting mobile gift cards, which only exist on a consumer's phone. And some chains are trying to crowd as many retailers as possible into one card, with a Connecticut gift card boasting of 100 competing retailers onto that one piece of rectangular plastic.

When someone sends someone a gift card, why not first send an E-mail alerting the recipient to the card's imminent arrival and have that E-mail include a password to activate the card after it arrives? If adopted, these are just some of the benefits retailers (and their customers) would see: "Heads Up That The Card Is Coming."

One reason that theft of gift cards is relatively easy to get away with-assuming the thief doesn't get caught at the moment of thievery, as apparently Mrs. Clause was-is that there is often no one in a position to notice the theft, even though there are quite a few players involved.

The gift-giver pays for the card and sends it away. Given the rarity of thank you cards today, the sender could simply assume that the card arrived. The retailer would have no reason to suspect anything. The bank and/or the card brand would similarly have no reason to get suspicious as the payment was completed before it was sent. And if the recipient isn't expecting the gift card, it could feel like the perfect crime, with no one in a position to sound the alarm.

The E-mail heads up would provide a mechanism for the recipient to quickly flag everyone when a card went missing.

An End To Not Knowing Who's Using Your Gift Card

One of the longstanding retail complaints about gift cards is that the chain typically has no idea who is using the card. It knows who paid for the card, but the value is in knowing who received it. Is that a potential new customer? Can you pitch them products based on what they used the gift card for?

Gift card exchanges have given retailers a small peek into knowing who received the cards, but could E-mail alerts work a lot easier and at almost no cost? As a service (free or paid), the retail could send an E-mail to the recipient to guarantee arrival. The customer is asked to provide the recipient's name, E-mail address, snailmail address and phone number.
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