Eddie Bauer, Others, Learn Their Gift-Card Weaknesses

Written by Evan Schuman
September 30th, 2010

In late July, a well-regarded retail research house called Retail Systems Research (RSR) began a study of retail digital card procedures by anonymously reaching out to 100 of the nation’s largest retailers and trying to buy a gift card, preferably digital, but a gift card nonetheless. What surprised RSR was how poorly many of those retailers fared.

Eddie Bauer, for example, completed the transaction, took the money and never sent the card. Two other retailers also never sent the card, but at least they had the decency to not charge for it. RSR Managing Partner Nikki Baird said Eddie Bauer’s people admitted they never shipped the card.

“In the case of Eddie Bauer, it was never sent. They sent me a letter that said so and gave me a number to call as the sender to release the card, but by the time I got the letter, the order had already been cancelled,” Baird said. The potentially bigger problem is how easily these incidents could have gone unnoticed.

“In the case of the other two, the credit card was never charged, so I’m pretty sure it was never sent. But it definitely was never received,” she said. (Editor’s Note: If the credit card had not been charged but the gift cards had been sent, that would have been an even juicier story. No need to go there, though.)

“We never heard anything from the other two [retailers] as to why the order was not processed. From an end-user perspective, it looked like we bought the card, and it would not have been until the monthly credit-card statement or some kind of exchange with the recipient (“Did you like the card?” “What card?”) that the consumer would’ve found out about it,” Baird said. “That’s not a good business practice.”

Indeed it’s not. Although those three retailers were the worst, many others showed some almost-as-bad processes. “Retailers fared very poorly on notification options. Only three retailers—Home Depot, CVS and Target—notified us when the gift card was viewed. Seventeen retailers offered a notification when the card was sent. Because the gift is digital, notification becomes extremely important. In our evaluation, seven gift cards ended up in junk mail,” she said. “E-mail deliverability is not guaranteed, so it is worthwhile to help the sender make sure that the recipient actually got the gift.”

I think we can go one material step further. It’s not merely that “E-mail deliverability is not guaranteed.” As a practical matter, it is guaranteed. It’s guaranteed that for every 1,000 pieces of E-mail, dozens—if not more than a hundred—will not get through to the recipient.

Some retailers—like Eddie Bauer—may never send it, while far more messages will get diverted or blocked somewhere along the way. Will the Internet mail system complete its task? Will an ISP guarding the recipient’s base block it? What about the recipient’s mail server?


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