I really enjoy gift cards. Not only are they a good device for, well, the obvious -- gifts -- but also I do like their use as a budgeting tool. Store some value on a nonrefundable piece of plastic, and voila -- you've got yourself a nice little monetary reserve that forces a spending discipline.
This leads to a confession on my part: I am a McDonald's (NYSE: MCD ) junkie. I don't go overboard on the stuff or anything like that, but I do relish every opportunity I get to ingest a fish sandwich or a quarter-pounder with cheese (how anyone can have a quarter-pounder sans cheese is beyond me). I actually will use McDonald's gift certificates to budget for the expense; I buy a bunch, an amount that will usually last me for several months.
So, the other day I was at the drive-through (incidentally, let's hope they never use off-site order services), picking up the calorie-dense quick-grub, and paying for it with my certificate currency. Before I handed the tender to the attendant, I marveled at all the imagery on the slips -- pristine representations of Ronald's meals, photographed to inspire Pavlov-like reactions upon sight. After I gave them away, a thought that would occasionally enter my head from time to time returned yet again, only this time a bit more strongly: McDonald's really needs to get its gift card program going.
When I returned home, I visited the corporate website (I ate the food first, of course) to see whether the powers that be were currently still testing gift cards; they were.
I am so impatient for these cards because I think they represent the ultimate in convenience. I hate having to deal with change, which is what you have to do with the certificate system: The bill comes to $5.76, you hand over six slips, and you've got those two dimes and four pennies to contend with. Not cool.
McDonald's doesn't think it's so cool, either. If I had a gift card, chasing change would never occur again -- it would simply remain in Ronald's till. That crazy clown would rather have it that way; with a bunch of paper certificates, there's always a high probability that some of the captured money will slip through his gloved hands. With a plastic rectangle, that just doesn't occur; it's basic Gift Card 101, it's the essence of the concept, and it's why places like Starbucks get a kick out of it.
Let's face it: Gift cards are everywhere, they're popular, and they make good business sense. Fast-food chains such as Wendy's (NYSE: WEN ) and Burger King will obviously see more efficient transaction times as a result. I'm hoping that whatever "test" McDonald's is making in regards to this program is a mere formality meant to optimize the eventual execution; as far as feasibility and market acceptability go, gift cards have already been tested (just take a trip to your local mall).
The one problem McDonald's may have is the iconic value that its gift certificates represent to many people. I have to say that, to one degree or another, even I might become nostalgic from time to time for those slips of paper with the pretty food on them. I'd guess that there are probably a lot of people out there who consider the act of giving a grandchild a booklet of McDonald's gift certificates a piece of Americana; for those who rue the day of the certificate's demise, you have my utmost sympathy. Yet, honestly, I do look forward to a stored-value card with Ronnie's face on it. I'll no longer consider him the Clown of Calories when that happens -- instead, he will be the Clown of Convenience.
More articles on the fast-food sector:
Do you think the gift card strategy is right for Mickey D's? Post your thoughts at the McDonald's discussion board.
Fool contributor Steven Mallas
owns none of the companies mentioned.
RSS Headlines
Fool UK