Gift giving has immense power.
Most of us intuitively understand that all gifts convey an implicit message.
Good gifts let others know that they matter to us. It shows the receivers that they are valued in excess of what they earned by right. When done well, gift giving builds stronger relationships.
Imagine this:
You manage a company of 100 excellent people who work hard and never cease to add value to the company. They’re important to you. You want them to know that. So, a few times a year you show them your appreciation with an unexpected gift—something small but meaningful.
This time around, you give everyone a $50 gift card, so you’re planning on spending $5000.
You’ve made a reasonable choice given that the popularity of gift cards keeps growing. Six in ten people hope to receive gift cards in the coming year. A gift card shows real value, but it’s also flexible enough that the recipients get something they want. Plus, it’s convenient for you—21% of buyers purchase gift cards primarily because they’re fast and convenient.
The problem of waste
The value on the face of the gift card is rarely the price paid. How much of your time will it take you to get and deliver those cards? Is there shipping and handling? And, how many of these cards get used anyway?
Breakage refers to gift cards that are sold but never redeemed. From 2005-2011, $41 billion worth in gift cards went unspent in the American market. Estimates on the rate of breakage for gift cards range from 8% to 12-15% and upwards of 19%. With the gift card market expected to increase to $130 billion by 2014, even the optimistic estimate of 8% in breakage means $10 billion dollars in lost value for those who purchase gift cards.
Suddenly, it feels like the money and time your spending for your 100 awesome employees is evaporating quickly.
Let’s look at your hard costs.
| Status quo | |
| Number of employees | 100 |
| Cost of gift card | $50 |
| Initial investment | $5000 |
| Breakage | 10% |
| Value of gifts actually used | $4500 |
| Total you paid for the gift campaign | $5000 |
The zero-waste option
Now, let’s see how Kiind is different. With Kiind’s zero-waste gift campaigns, you don’t pay for the gift until it is used, so breakage doesn’t cost you anything. You eliminate wasted gifts.
| Kiind | |
| Number of employees | 100 |
| Cost of gift card | $50 |
| Initial investment (campaign fee) | $9 |
| Breakage | 10% |
| Value of gifts actually used | $4500 |
| Total you paid for the gift campaign | $4509 |
With Kiind, you keep at least $491 in the bank.
And you still get to show your employees the same appreciation. Kiind saves you even more if you count the cost of procuring and delivering gifts. Plus, Kiind helps you know who’s appreciated their gifts and who hasn’t, so you can give with more insight next time.
Good for me. What about the retailers?
Even when retailers make millions through breakage, it’s not a clear win for them either. Retailers would rather increase redemption, not breakage. People typically spend more than the face value of the card when redeeming them.
Unredeemed cards risk stalling a relationship with two potential customers, the giver and the recipient.
What’s more, state governments are cracking down on how pre-paid gift cards are handled. Some states have enacted escheatment laws that clawback profits from breakage under the auspice of retrieving unclaimed property.
Waste ruins a good gift
Kiind believes that unused gift cards signal a miscommunication. It’s not just misspent money that matters to us; unused gift cards point to lost opportunities to build relationships.
Waste should not be the price paid for the simplicity and expedience of buying gift cards.
Our solution is simple: you don’t pay for what they don’t use.
Kiind’s gift platform enables you to create zero-waste gift campaigns. We don’t charge the gift giver until the gift card is claimed. Better still, we significantly reduce procurement costs by going all-digital. No shipping, no plastic. Just a simple email and a few friendly reminders if needed.
Zero-waste gift campaigns save money, of course. But they also help the giver know how well the gift was received. We believe that gifts should connect people. Better gifts build better relationships. Breakage is one impediment to better giving. As we roll out Kiind, we’re going to show how we empower people to give better without wasting money or losing focus on what matters.
