Amazon’s Gift Card Future: Personal, But Not Too Personal

Written by Evan Schuman
November 20th, 2008, which arguably has one of the most extensive retail CRM databases and purchase recommendation engines, envisions a Catch-22 future for gift cards. The key is making them more personalized, more customized. And yet, anything that hints of privacy violations is off-limits. It’s like a starving man being given the keys to a well-stocked food locker as long as he agrees not to eat anything.

Such is the plight of Michal Geller, Amazon’s director of consumer gift cards. From Amazon’s perspective, the good news is that online giftcards are potentially a lot more flexible than their physical store counterparts, which need some way to interact with POS systems, be that magstripe or an RFID chip.

That limits customization options, although some retailers—such as Target and Best Buy—have been playing with adding electronics into gift cards so they can play music or take photographs.

Amazon on Thursday (Nov. 20) announced a deal with a company called HDGreetings to send digital greeting cards with its gift cards. The digital cards would allow consumers to place a photograph and words into an animated scene and to personalize it, similar to what video humor site JibJab has been doing with its video satires.

Down the road, though, Amazon is toying with other ways to truly customize cards. But avoiding privacy issues, Geller said, is non-negotiable. "Anything related to privacy is off the table," he said, forcing Amazon to focus on "some creative ways (that are) not creepy."

Creative But Not Creepy

The safest initial approach is to limit personalization to data the gift-recipient has signed off on releasing, such as wishlists and the like, coupled with recommendations based on gift-giver-supplied demographics (What should I give an 18-year-old female who lives in Barrow, Alaska?).

The temptation is to allow gift givers to ask for truly personal recommendations for gift recipients based on that recipient’s history of Amazon purchases. Not only would that potentially violate privacy issues, but those recommendations may be misleading—especially if the intended gift recipient often buys gifts for others.

The goal is "to tie the giver and the received even more closely so the giver can give something that is very meaningful," Geller said. But he wouldn’t commit to how Amazon plans to do that.

Geller compares Amazon’s HDGreetings deal—which itself is just part of an older Amazon program to share its APIs with companies that want to integrate Amazon giftcards with their offerings—with the value of "a six-year-old drawing a picture for you rather than buying you a card in the store" in that it takes more time and shows effort.

Another possible avenue of gift card customization and personalization is leveraging the ton of information consumers—especially younger consumers—are freely sprinkling all over the Web, particularly on social networking sites such as MySpace, Facebook, YouTube, Twitter and LinkedIn.

There again, convenience battles privacy. If a vendor used software to gather, analyze and coordinate that information and delivered reports about a gift recipient to a gift giver, that could push the privacy envelope. But if the vendor pointed the gift giver to those sites and suggested they search themselves, it could avoid the privacy risk at the cost of forcing the gifter to do more work. Then there’s the grey middleground, where a vendor might offer the user the tools to find and interpret that data.

Jennifer Sharp, HDGreetings’ CEO, said her company is starting to mine social networking sites, but only to help create better greeting cards. "We are looking into creating a video profile where you could take information about a user from their social networking site or pictures of their friends and people in their network," she said. "You could combine that with our animated templates."

A Huge Source Of CRM

Beyond using CRM and available data to help sell more focused gift cards, gift cards themselves can be a huge source of CRM data. Various gift card exchange sites have cropped up—including Plastic Jungle and Leverage—focused on collecting that information.

For example, a Target gift card is given to Consumer Smith. Consumer Smith doesn’t have a Target near him, so he goes to an exchange site to try and swap it for a Wal-Mart gift card. How much would Wal-Mart pay to learn about that transaction?

It’s not uncommon for someone using a gift card—as long as they stay within the card’s dollar limit—to stay anonymous. And yet the card exchange sites know who is exchanging one card for another and what specific consumers would prefer to get. If you want to buy the perfect gift for someone, isn’t that valuable data to have? Leverage has even tried to match advertisers with their gift card exchange consumers.

The National Retail Federation reported this week that it is seeing a drop in gift card purchases this holiday season. Although that may be short-lived, retailers looking for ways to craft better and more targeted gift cards may want to double their efforts.

Additional Reporting by Fred Aun.


One Comment | Read Amazon’s Gift Card Future: Personal, But Not Too Personal

  1. Rob Martell Says:

    If I buy a gift card for someone, it is so they can buy anything they want. Anything! Sure, I try to get one from a merchant who has enough variety that will meet the recipient’s needs.

    While I get the idea of an aftermarket for gift card swapping, I personally would have done the research before buying the card, now that it can be done on-line. Brick & mortar stores complain about people who come in to view items but then order on-line. This would be the same, wouldn’t it?

    I also think that the more targeted (no puns) things get, the more useless the ads become. I might have bought a Will Smith DVD, but that doesn’t mean I want to buy any more, or that I am NOT interested in anything else.

    This whole thing just gets creepier every day.




StorefrontBacktalk delivers the latest retail technology news & analysis. Join more than 60,000 retail IT leaders who subscribe to our free weekly email. Sign up today!

Most Recent Comments

Why Did Gonzales Hackers Like European Cards So Much Better?

I am still unclear about the core point here-- why higher value of European cards. Supply and demand, yes, makes sense. But the fact that the cards were chip and pin (EMV) should make them less valuable because that demonstrably reduces the ability to use them fraudulently. Did the author mean that the chip and pin cards could be used in a country where EMV is not implemented--the US--and this mis-match make it easier to us them since the issuing banks may not have as robust anti-fraud controls as non-EMV banks because they assumed EMV would do the fraud prevention for them Read more...
Two possible reasons that I can think of and have seen in the past - 1) Cards issued by European banks when used online cross border don't usually support AVS checks. So, when a European card is used with a billing address that's in the US, an ecom merchant wouldn't necessarily know that the shipping zip code doesn't match the billing code. 2) Also, in offline chip countries the card determines whether or not a transaction is approved, not the issuer. In my experience, European issuers haven't developed the same checks on authorization requests as US issuers. So, these cards might be more valuable because they are more likely to get approved. Read more...
A smart card slot in terminals doesn't mean there is a reader or that the reader is activated. Then, activated reader or not, the U.S. processors don't have apps certified or ready to load into those terminals to accept and process smart card transactions just yet. Don't get your card(t) before the terminal (horse). Read more...
The marketplace does speak. More fraud capacity translates to higher value for the stolen data. Because nearly 100% of all US transactions are authorized online in real time, we have less fraud regardless of whether the card is Magstripe only or chip and PIn. Hence, $10 prices for US cards vs $25 for the European counterparts. Read more...
@David True. The European cards have both an EMV chip AND a mag stripe. Europeans may generally use the chip for their transactions, but the insecure stripe remains vulnerable to skimming, whether it be from a false front on an ATM or a dishonest waiter with a handheld skimmer. If their stripe is skimmed, the track data can still be cloned and used fraudulently in the United States. If European banks only detect fraud from 9-5 GMT, that might explain why American criminals prefer them over American bank issued cards, who have fraud detection in place 24x7. Read more...

Our apologies. Due to legal and security copyright issues, we can't facilitate the printing of Premium Content. If you absolutely need a hard copy, please contact customer service.