When you buy a Target gift card worth $20 or more through December 4, the stylish discount retailer will donate $1 to St Jude Children’s Research Hospital up to $750,000. Since gift cards are basically stored-value cards and discount retailing has pretty thin margins, how could Target possibly afford to shed $1 out of every $20, even if it’s promotionally-appropriate given Target’s pledge to give 5% of income to charity? There are a couple of answers. First of all, this is a limited time offer, valid only November 28, 2010 through December 4, 2010, which is fitting since fully 35 percent of all gift cards are sold in November and December. But all that means is that Target is limiting its exposure, not that it’s necessarily making a sound business decision. The true answer has to do with the psychology of gift cards, which most of us treat like found money. If you go to Target and the Garmin Nuvi GPS you've had your eye is $99 and you’ve got $80 in Target gift cards, the extra $19...
Dedicated to highlighting and dissecting the best and the worst cause marketing promotions and campaigns.