Gift Cards Activate Stores

Buoyed by consumer demand, many booksellers are finally embracing Book Sense plastic gift cards, which were introduced in October 2003. For many booksellers, Book Sense gift cards offered a much-needed boost at the end of a lackluster year.

"Customers purchased a lot more gift cards than they have ever bought gift certificates," said Clark Kepler, owner of Kepler's Books & Magazines in Menlo Park, Calif. At Northern Lights Books & Gifts in Duluth, Minn., owner Anita Zager said, "Many customers asked for the cards. They worked out terrifically."

In just a month, the number of stores using Book Sense gift cards jumped 23%, to 307 stores as of January 5, up from 250 according to the ABA's director of marketing, Jill Perlstein. Sales were up, too: $1.9 million in total, for an average sale of $26.62 per card, versus $579,783, or $25.95 in December 2003. Booksellers lagged slightly behind the national average, as estimated by the National Retail Federation. In general, card buyers paid $108.28 for 3.38 cards, or almost $32.04 per card.

The American Booksellers Association's Book Sense gift certificates in paper were once a cornerstone of the Book Sense program, and a requirement for every Book Sense retailer to carry. But the ABA stopped selling them at the end of last year after plastic gift cards became available. Because plastic cards cost more--$20 per month to participate in the program on top of the expenses associated with making and scanning the gift cards--the ABA amended its Book Sense marketing agreement to make stocking gift cards optional.

Despite the cost, an increasing number of booksellers have opted to carry the cards, just like other retailers, from Wal-Mart to Blockbuster (which introduced the first gift card in 1996). And no wonder, given the dollars at stake. In its second annual gift card survey, conducted by BIGresearch last year, the NRF projected that consumers would spend $17.34 billion on prepaid, or stored-value, gift cards over the 2004 holidays.

At Harvard Book Store in Cambridge, Mass., the first bookstore to replace its paper frequent buyer card with a plastic one, gift cards were a hit. "We definitely saw our gift card sales go way up during the holidays," said marketing manager Amanda Darling. "We have 80 feet of frontage on Massachusetts Avenue in Harvard Square, and we had signs about the gift cards there and displays at the registers." Not only did her store redeem cards sold during the holidays, but it has had some customers refill them.

Mary Gay Shipley, owner of That Bookstore in Blytheville in Blytheville, Ark., couldn't wait to carry gift cards. "I've been carrying the Book Sense gift cards since they became available in October 2003. If you're in retail, you almost have to offer them," Shipley told PW. In addition to selling the cards in her store and on her Web site (www.tbib.com), Shipley uses them for store donations and includes them in newspaper and radio ads. Although Shipley's customers prefer $25 gift cards, she sells them for any amount, from $1.95 up to the Book Sense maximum of $250.

"People are really used to doing the gift card thing," said Kerry Slattery, general manager for Skylight Books in Los Angeles, who called the cards as an "excellent" add-on. When she rang up sales during the holidays, she noted that people would say, "Add this." To increase customer awareness of the cards, Slattery posted displays throughout the store, along with information cards sent out by ABA, which explain that Book Sense gift cards have no hidden costs.

Other booksellers observed that paper rules. Although Bear Pond Books in Montpelier, Vt., added gift cards this holiday season, owner Michael Katzenbach found that, given a choice, customers preferred the Mary Engelbreit note card/gift certificates that booksellers can purchase from the ABA for their store's use. "We sold tons of gift certificates," said Katzenbach. "I'm exaggerating, but there were some days I wondered if anyone was going to buy a book."

"I know gift cards are all the buzz these days," said Larry West, co-owner of the Book Mark in Eugene, Ore., "but for a small bookseller, they are too expensive." Now that paper Book Sense gift certificates are no longer available, he plans to rely on the store's own certificates. For the Owl & Turtle Bookshop in Camden, Maine, which hasn't joined Book Sense yet, store gift certificates in paper work well. "We had a huge increase in sales for those," said store manager Joseph Barber. "We've had them range from $5 to $500."

Tom Lowenburg, owner of Octavia Books in New Orleans, said, "Sales for our own in-store gift certificates were up considerably last year, although we didn't do anything extra in the way of promoting them. Even when we start offering Book Sense gift cards, we'll continue to offer our gift certificates."

ABA's Perlstein is pleased that booksellers are giving the cards a try and expects to see another bump in signups this spring--in time for Mother's Day, Father's Day and graduation. "Book Sense gift cards may be more expensive than paper certificates," she noted, "but they allow for increased sales." Because the cards are reloadable, she pointed out, booksellers can use them as loyalty cards.--with reporting by Bridget Kinsella, Claire Kirch and Bob Summer