The Gift Of Plastic

Sydney Morning Herald

Wednesday December 1, 2004

Denise Cullen.

Prepaid vouchers from large retailers give new meaning to "Christmas cards", reports Denise Cullen.

Gift vouchers have long been billed as the perfect solution for Christmas shoppers short on time and inspiration, but this year these paper saviours have been nudged aside by prepaid gift cards.

Lisa Tait, the media manager for Choice magazine, says the gift cards allow retailers to capture business from people who are looking for presents but don't know what to buy.

With their wallet-sized convenience and range of colourful designs, the credit card lookalikes are aimed at broad appeal.

Their main difference is a barcode instead of a magnetic strip to store information.

Once loaded they cannot be topped up or reloaded. As with vouchers, if the item you wish to purchase costs more than the value on the card, you can pay the difference. No fees or charges are imposed on buyers or users.

Damian Eales, the group general manager of marketing and operations with David Jones, says the cards will be especially popular with parents who want to give their children some spending power but don't necessarily want their hot little hands wrapped around a credit card.

But at least, they won't be adding to Australia's mounting consumer debt.

Paul Gillett, a solicitor with Victoria's Consumer Credit Legal Service, says the cards are a safer bet for irresponsible spenders.

"It has an absolute limit and, once the limit is exhausted, the card is worthless. In making the gift cards look like credit cards, there may be some attempt to appeal to customers who still feel that some kudos or sophistication attaches to the use of a credit card," he says.

Recipients can check their balances at the counter or on their receipt after making a purchase.

Those with Coles Myer's plastic can also view their balance and purchase history at www.giftcards.com.au/colesmyer/ or by calling 1300 304 990.

"In the US, since the large scale conversion from paper-based vouchers to cards, the market has grown from $10 billion a year sales to $45 billion in 2003 and is projected to grow to $90 billion by 2006," says Robert Mittag, the general manager of business development for Coles Myer.

But, like paper vouchers, these cards have their caveats. In particular, lost or stolen cards cannot be replaced or refunded.

"The PIN is printed on the back of the card, and does not prevent a stolen card from being used," Mittag explains. "Customers do need to treat their gift cards as they would cash."

The "use it or lose it" principle also applies: cards expire two years after issue. However, you can buy another gift card with your remaining credit before the

expiry date.

David Jones gift cards can be used only at David Jones stores, but the Coles Myer gift cards can be used at any participating retailer within the Coles Myer group, including Myer, Target, Kmart, Officeworks, Megamart, Coles, Bi-Lo, Liquorland and Vintage Cellars.

So if your intention is to offer flexibility, make sure you select the right card.

While retailers are reluctant to say how well the cards are selling, Coles Myer's Mittag says: "The take-up rate has exceeded our expectations, to the extent that the Coles Myer Gift Card will be our biggest-selling item this Christmas."

© 2004 Sydney Morning Herald

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