Skip to main content

Target's Gift Card Cause Marketing for St. Jude

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 plus sales tax seems like no big deal.

Indeed, according to figures compiled by Fortune magazine, 72 percent of us spend more than the value on the card, an average of 58 percent more.

When you consider that the average value on a gift card is $27 that means the majority of us are likely to spend an additional $15.66 when we redeem our gift card, bringing the total average purchase to $42.66. That’s not the average ticket at someplace like Costco, but it’s not bad either.

And six percent of the value of all gift cards sold are never cashed in. Depending on how Target books gift cards that 6 percent could fall straight to the bottom line.

(Needless to say these averages are for all gift cards given and could be higher or lower at Target.)

Finally, while you can get these cards online or at the store, chances are you’ll buy other goods when you purchase the gift card.

Comments

Popular posts from this blog

Top Eight Cause-Related Marketing Campaigns of 2007

Yeah, You Read it Right. It's a Top 8 List.

More cause-related marketing campaigns are unveiled every day across the world than I review in a year at the cause-related marketing blog. And, frankly, I don’t see very many campaigns from outside North America. So I won’t pretend that my annual list of the top cause-related marketing campaigns is exhaustive.

But, like any other self-respecting blogger, I won’t let my superficial purview stop me from drawing my own tortured conclusions!

So… cue the drumroll (and the dismissive snickers)… without further ado, here is my list of the eight best cause-related marketing campaigns of 2007.

My list of the worst cause-related marketing campaigns of 2007 follows on Thursday.


Chilis and St. Jude Children’s Research Hospital
I was delighted by the scope of Chilis’ campaign for St. Jude Children’s Research Hospital. As you walked in you saw the servers adorned in black co-branded shirts. Other elements included message points on the Chilis beverage coas…

Cause-Related Marketing Meets Microfinance

Kiva.org and Advanta.com Mix it Up

You’d have had to have been in Ulaanbaatar, Mongolia the last year or so to have missed the run up of microfinance. Between 2004 and 2006 more than $4 billion of capital flowed into microfinance institutions. All told experts say the total loan microfinance loan portfolio may be as much as $12.5 billion. And of course the father of microfinance, Muhammad Yunus won the 2006 Nobel Peace Prize. Microfinance is now so respectable, so effective, (so profitable!) that it’s already enjoying its first global backlash.

Actually that first sentence is hyperbole. Because even in Ulaanbaatar… far from almost anywhere on the vast, frigid steppes of Mongolia… microfinance is thriving such that the earliest recipients of micro loans there are now complaining about taxes and government bureaucracy! And May 29-31, 2008 the Conference of Microfinance Institutions will convene in Ulaanbaatar, the eleventh such annual conference.
Now Advanta, a credit card issuer to small…

Cause Marketing Beer with BOGO, Brew One Give One

On Monday’s post I touched on the topic of telling people what your cause marketing campaign accomplished when completed. I’ve recommended this approach to clients as a way to keep open the lines of communication with customers and clients and to get extra value from the campaign.

In other words, you’ll want to hold back some of the promotion’s budget to continue to activate the effort until the very end.

But what if that really cuts across the grain in your organization? What if it’s just not in your corporate DNA to do anything but to frontload your cause marketing activation? Well, then, add the report back to the activation of your next cause marketing effort.

New Belgium Brewing of Ft. Collins, Colorado, said to be the seventh largest brewery in the United States, did just that with this ad in Sunset magazine. I found this ad in the Alden Keene Cause Marketing Database.

New Belgium donates $1 for every barrel it brews and sells. It’s a BOGO cause marketing effort, Buy One Give One. …