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Andrew Tobias
Andrew Tobias

Money and Other Subjects

My Invaluable $10 Gift Certificate – Part II

April 21, 1999January 29, 2017

I told you about the “invaluable” $10 Gap gift certificate AT&T sent me.

Tom Williams writes: “I once did a favor for someone who, as an expression of thanks, gave me a $30 gift certificate for an expensive men’s clothing store. I felt obligated to use the certificate but had to spend significant extra money just to get a necktie. The point being that a gift certificate is often worthless and may actually have a negative value. Good luck shopping at the Gap. I’ll be interested to hear what wonderful thing you are able to purchase with your $10 certificate. Maybe a Gap pocket handkerchief or some Gap shoelaces.”

Actually, I like the Gap, but knew I’d lose the gift certificate, so I gave it to a friend. But I know what you mean.

What a great business gift certificates are. First the store gets an interest-free loan until the recipients use them. And surely 5% of them — if not 20% — just never get used. And some nice proportion of the 80% or 95% that do get used get used by folks who wouldn’t normally have shopped there . . . so you draw in some new customers. And often they will, like Tom, wind up spending more than the value of the certificate anyway.

All this is innocent enough — the Gap is doing nothing at all wrong by offering gift certificates. But if I ever figured out how to charge you for this column, one of the first things I would do is find a way to sell you gift certificates as well.

Meanwhile, the ever-inventive Brooks Hilliard suggests, “You might try auctioning off your gift certificate for charity. I’ve seen $10 items go for considerably more (say $12.75 and up) in such auctions. I’d be happy to start the bidding at $7.35. This approach would add some ambiguity to the value (or invalue, as the case may be).”

Do I hear $20?

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