Gift Certificates Go Plastic

December 1, 1998 / 1:19 PM EST / CBS/AP

Finding that perfect gift for someone at Christmas or any other time is never easy, but a growing number of retailers think they have the solution. It's plastic.

Stores are converting gift certificates from paper documents to electronic cards.

They're less cumbersome to carry, have a technological edge that appeals to kids and are advantageous for retailers.

Managing Your Money

"These cards are so easy to use," said Marjorie Behrmann, 30, of Dallas. "They allow me to give friends and family a personalized shopping spree. They also are a little more sophisticated than just a piece of paper, and they add more of a personal touch."

Neiman Marcus, the Dallas-based specialty retailer, is widely credited with being the first to adopt the electronic gift card in 1994.

"The cards proved so popular with customers that within 90 days we had completely dropped paper certificates," said Billy Payton, vice president of marketing and customer programs for Neiman Marcus.

Making the Most
Of the Holi-daze

More recently, Neiman Marcus developed cards tailored to a variety of holidays and occasions including Christmas, anniversaries, birthdays, and Valentine's Day. This year, the store introduced a special corporate gift card that a company can customize with a logo or other design and then present to a client.

The gift cards generally are imprinted with magnetic strips or bar codes that are programmed with the value and are read by a machine at the store's cash registers. The receipt tells the customer how much money is left on the card. Some retailers offer a toll-free number for customers to call to get balance information.

Although the cards require an investment in technology on the part of the retailer, they also offer advantages. If the recipient buys less than the full value of the gift, the balance stays on the card rather than being returned in cash to the consumer. They also are harder to counterfeit than paper certificates.

Pam Rucker, a spokeswoman for the National Retail Federation in Washington, D.C., expects the trend toward electronic cards to continue.

"I think they will become more and more popular as we move more toward a cashless and paperless society," she said. "Not only are themore convenient for customers, they also help speed transactions for retailers who can just run the cards through their systems as quickly as they would credit card purchases."

Already the cards are becoming more widespread.

Federated Department Stores Inc., based in Cincinnati, began selling gift cards over the past few weeks. Old Navy, Kohl's, Saks, and Kmart also started using the cards in the last year.

Sears, based in Hoffman Estates, Ill., introduced its card in July, in time for the back-to-school season.

"It was a convenient way for parents to let older children do their own shopping without having to entrust them with money or credit cards," said Sears spokeswoman Jan Drummond. "It gives children an adult feeling, but it allows them to spend just so much money and no more."

Ms. Behrmann, the Dallas resident who has given the gift cards, said she enjoys knowing that the recipients can get what they really want and she doesn't have to worry about disappointing them with a gift they don't like or that they already have.

"It's truly a one-size-fits-all gift," she said.

Written By Lisa Cornwell