Playing with Cards
Shopping centres are recognising the huge benefits to be had from binning gift vouchers in favour of gift cards.
by Claire Elliot of Shopping Centre magazine

Gift cards have fast become a popular method for shopping centres to earn extra income, with not only the centre benefiting from additional revenue but also retailers receiving a lift in trade. According to figures, the total UK all-sector gift card and voucher sales for 2007 was approximately £3.5bn which means there is a significant potential for growth in the shopping mall sector. Figures show that £40 to £45 is the average amount placed on a gift card by any one person and those cards tend to be used twice – which means the average basket spend is £20 to £22. With paper vouchers there is a average of between 5 to 5.5 per cent breakage (the balance left unspent), because some customers spend the whole amount they receive, while others don’t spend any of it because no change can be given. With gift cards it’s slightly higher and we see non-redemptions of between 4 and 10 per cent across the country. If you draw a line through the whole thing then you’re looking in the region of 8 per centre as being the breakage figure.

Stuart Green, of StoreFinancial, agrees with this figure and says “Customers themselves tend to spend most of the money on the cards, but commercial sales are increasing in quite a big way. Companies like to support local businesses, so will buy gift cards to hand out as rewards. And when a card is not given to you by a loved one you don’t necessarily spend as much of the money. For a mature scheme, 25 per cent of sales will be corporate.”

It’s not surprising therefore that an increasing number of shopping centres are switching from voucher schemes to branded gift cards. Lend Lease Retail is launching a new gift card scheme, operated by StoreFinancial, across its UK retail centres this month in a move to capitalize on increasing voucher sales for gift purchases. Lend Lease Retail currently operates a gift voucher programme in three of its UK shopping centre, Bluewater, Touchwood and Overgate. But these will be phased out over the next few months as the new gift card scheme is implemented. In addition, the gift card programme will be launched as a new customer service at Golden Square in Warrington. “Voucher sales have been up across all our centres in recent years and purchasing vouchers as a gift is a clearly developing trend,” says Shams Maladwala, head of marketing and communications at Lend Lease Retail. “We wanted to offer a more flexible system than traditional vouchers for both our customers and retailers.” The gift cards, which can be loaded with up to £500, use the MasterCard platform, which will allow the cards to be spent in all stores within Lend Lease Retail shopping centres that accept MasterCard, giving them a universal appeal. It also means that gift recipients are not limited to just one store.

Green says that the gift card is far more aspirational than a gift voucher, so StoreFinancial chose to use the MasterCard platform to support that aspirational feel. “In essence, you can use it anywhere,” says Green. “But then it’s down to the branding and marketing by the shopping centre. At thecentre:mk, they didn’t want to use the gift card just in their centre, they wanted to create a town centre card, so they advertised that fact by saying it could be recouped at thecentre:mk, Midsummer Place and Xscape. “The good thing is that we can measure exactly where the cards are being redeemed,” adds Green, who will also be launching a gift card scheme at Meadowhall in the summer.

“Meadowhall had a voucher scheme before, so we’re replacing that and are also taking over their Go Shop card and incorporating that as we go forward,” says Green. “The Go Shop card offered discounts to registered users and enabled customers to receive those discounts in particular stores. In the future we also want to capture the recipient’s details, so we know their spend habits, which is a really powerful tool. It will work rather like the Tesco Clubcard. That’s the way the industry is headed, providing the shopping centre is sensitive about it and only communicates with people who are willing to be contacted.”

Shopping Centre
May 19, 2008