Publications

Sharper Image Bankruptcy: Ramifications for the Gift Card Industry

April 2008
Paybefore.com

During the past few years, sales of retailer-branded gift cards have soared. Once novel, gift cards have become popular, in part, because they are convenient for all occasions: Christmas, birthdays, graduations, baby showers, housewarmings or as a “thank you,” etc. Gift cards also make gift giving easy—no more puzzling over which item to pick up. The purchaser simply chooses a retailer and prepays a dollar amount in return for a card that is redeemable for goods or services. Then, the purchaser presents the gift card to the recipient, enabling the recipient to make purchases at his/her convenience or to accumulate cards for a larger purchase. This is the offer that retailers hold out to consumers and for which gift card purchasers bargain.