Issue No. 4 - Dec 26, 2007
Out with the Old...In with the New...some advice for Walgreens and Brinker International.
My Sunday, December 16th newspaper was overflowing with store advertising supplements...one almost near-the-end push for sales so retailers can tie a bigger bow on their 2007 holiday season sales. One such flyer was for Walgreens, the nation's sales leader in the drug store / pharmacy retail category. On the supplement's front page: an ad for gift cards... "Over 60 to choose from!"
There is money to be made by retailers selling a selection of gift cards from other retailers. Almost every major national and regional grocery store chain, as well as convenience stores and gas stations, offers an end-cap rack (the "premium" display / shelf space found at the end of each aisle), a counter display or even a special aisle full of gift cards.
Who supplies these "third party" gift cards to the retailers likely rests with a handful of companies specializing in this niche market. The largest is Blackhawk Network, one of the most profitable units of the giant grocer Safeway Inc.
Back to Walgreens...the ad worked for me! I headed out in my car to the local Walgreens store to pore through their assortment. On my way there, I even heard a commercial by FM radio celebrity "Delilah" promoting Walgreens' gift card selection. (Yes, I confess! I sometimes listen to "Delilah After Dark," especially during the holiday season.) I chose a $50 value gift card found for Brinker Restaurants. The card-holder reads: "6 Great Restaurants... 1 Great Card." Brinker International, Inc. is the Dallas, TX based casual-dining restaurant giant (#2 in revenue behind Darden Restaurants). The 6-in-1 gift card is redeemable at Chili's, Macaroni Grill, Maggiano's Little Italy, On The Border Mexican Grill & Cantina, Corner Bakery Café, and Big Bowl Asian Kitchen. This would make a great gift for someone, allowing them to select from any one of six restaurant concepts!
There is just one (actually, two) problem(s). Big Bowl Asian Kitchen was divested from the chain in either late 2004 or early 2005 (the concept still exists, owned by the Chicago area casual-dining and upscale restaurant operator Lettuce Entertain You Enterprises, Inc.). Corner Bakery Café was sold on February 2, 2006 to CBC Restaurant Corp., a subsidiary of Il Fornaio (America) Corporation. Granted, in the world of casual-dining restaurants, both concepts are on the small side: there are about 100 Corner Bakery Café locations, and even fewer (about 8) Big Bowl locations.
It would be one thing if these divestitures just happened, or occurred within the last several months, however we are almost at the two-to-three year time period following the sales from Brinker International to their current owners. I contacted each to find out if they would still accept these "6-in-1" Gift Cards. Corner Bakery Café will not accept the gift cards (can you blame them). To their credit, Lettuce Entertain You Enterprises Gift Card Guest Relations said the gift cards would still be accepted at their Big Bowl locations. (They are obviously a very customer-focused company: the concept has not been a part of Brinker International for over two years, yet there was no hesitation in their response). The fact that they may not ever be reimbursed for any of these "electronic funds" they no longer have access to was not any concern in the conversation.
I wanted to make sure this was not an isolated incident, so I visited several other Walgreens locations. Sure enough...as of the date of this posting, the stores I visited each have some of the "6-in-1" gift cards on their racks. In partial fairness, there is also an obviously newer "4-In-1" Gift Card reflecting their current concepts, but why would they (Brinker International) even want to risk bringing about a possible unpleasant situation of a customer attempting to use the gift card at a brand no longer accepting them? (Another example observed indicates Brinker International needs to do a better job of managing their brands: a current page on the Blockbuster Incentives website, promoting their gift cards, offers one in conjunction with Brinker International. Their "MOVIE and a MEAL GiftCard," web-page clearly states Brinker International restaurants include Corner Bakery Café.)
Out goes 2007...in comes 2008. Out with the old...in with the new. Advice that either Brinker International, Walgreens, or their gift card supplier should heed.
The consumer holds all of the cards.
Ken Hawkins
The Card Shark
Please feel free to submit your thoughts and ideas to KHawkins@GiftCardTRACKER.com