Over the last few years, retailers have developed a new way to entice consumers to buy more gift cards by introducing bonus offers. A typical offer goes like this – buy a certain amount of gift cards and get free bonus gift cards. The image below is from a local Romano’s Macaroni Grill here in Maryland, offering a $5 bonus card when you buy a $25 gift card. So, why are retailers offering these deals during the holiday season and why are they growing in popularity? There are several reasons:

First, it’s a win win situation for the buyer, receiver, and retailer. Buyers are enticed to buy gift cards because there is something in it for them. So, they can buy a gift card as a gift and then keep the bonus card for themselves. The retailers benefit because it provides them an opportunity for future sale.

Second, retailers have every incentive to push gift card sales during the holidays because it provides them a boast in sales in January, which is usually a slow month. Also, studies show that people who spend gift cards usually spend 20% more than the card value, so it makes business sense to spend advertising dollars on giving out bonus gift cards since there is a greater chance that money will be recouped when the card receiver uses the card.

Third, not all the bonus gift cards will be redeemed. This is because since they are listed as “Bonus Cards” instead of “Gift Cards”, they do not fall under the gift card rules under the CARD Act. So, these “Bonus Cards” have a limited period by which they must be redeemed before they expire. By putting restrictions on their usage, the probability that some of the cards expire before they are used is high, saving the retailers some money.

Regardless of your opinion on these Bonus Card deals, I think it is smart marketing and has been very effective, hence their growing popularity. Banner Design