It's a brilliant move by Sears. In the past, gift cards from the longstanding retailer had to be used up within two years of purchase. It's a common practice. Amazon.com (NASDAQ:AMZN) also gives you two years to consume the real or virtual plastic. Like yesterday's Sears gift cards, it's two years -- goodbye.
It doesn't seem right, does it? Here you are giving a retailer some money up-front, and instead of thanking you for your patronage, you're handed a piece of ticking plastic. Shouldn't "dormant" accounts actually have inflation added to the balance rather than be whittled away by fees and ludicrous shelf lives that defy the molecular structure of legal tender?
That's why Sears -- which hasn't won praise for being a savvy marketer since the gravy days of corduroy -- rocks. By announcing this move with just days left in the critical holiday shopping season, it is catching its fellow retailers off guard in terms of following suit. That may give the languishing retailer's gift card business a welcome lift this month, even if the bean counters wait until a gift card is consumed rather than purchased to tally it over on the income statement.
But won't Sears be leaving some money on the table? Perhaps. In sum, 10% of all the money spent on gift cards is never consumed. Yet that's the high rebate mentality that ultimately tarnishes the buying experience. Let a gift card expire worthless and you will be hard-pressed to ever buy one again, right?
Sears isn't the only company with long-lasting gift cards. You won't be on the meter when you buy gift cards from leading discount department stores such as Wal-Mart (NYSE:WMT) and Target (NYSE:TGT), and they have certainly fared well through the recent economic lull. Bookseller Borders (NYSE:BGP) recently did away with expirations, too. Sears now joins the consumer-friendly few.
Will you be giving out some gift cards this holiday season? If so, does it matter whether the gift expires? All this and more -- in the Sears discussion board. Only on Fool.com.
