ABA to Wind Down Gift Card Program

Booksellers to Have More Cost-Effective Options Moving Forward

Due to significant changes in consumer behavior and in ABA Gift Card Program usage, the American Booksellers Association will be phasing out the program after the upcoming holiday season. ABA has been reaching out to inform Gift Card Program participants of the plan over the last several weeks. In an e-mail to all program participants last week, ABA outlined the reasons for the change and stressed its commitment to helping members be more profitable.

After monitoring the ABA Gift Card Program carefully over the past six years and following discussions with the ABA Board and the Booksellers Advisory Council, ABA concluded that the gift card program was no longer the most cost-effective arrangement for independent bookstores.

ABA noted three key reasons for the change:

• The Book Sense Gift Card Program (now ABA Gift Cards) was launched in September 2003 in response to bookseller demand for a program that would allow cards to travel from store to store, giving consumers a choice when they wanted to send a gift card to a friend or loved one in another state. The expectation was that a significant number of ABA gift cards sold in one store would be redeemed in another store. However, that never proved to be the case. Instead, statistics show that 98 percent of ABA gift cards are redeemed in the selling store, and only two percent of cards travel between different businesses. This means that participating ABA member stores are paying a very high premium for this very small percentage of the overall gift card business.

• Technological advances since the program's launch now allow consumers to easily go online or call a store in another community where a friend or loved one lives in order to purchase a gift card for them, rather than buying a card in one city and mailing it to another. There has been a palpable shift in consumer interest towards the network of locally owned businesses within their communities, and away from the network of bookstores across the country. This is the same shift that led to the development and growth of IndieBound and all its facets.

• Gift card processing technology and services have evolved sufficiently that ABA believes stores can manage their own programs much less expensively than the current program.

As the Gift Card Program winds down over the next 10 months, ABA stressed, booksellers will have choices in the way they operate and manage their costs going forward and ample time to prepare. The current process will not change before January 1, 2010, and the program will remain in place for stores that want to use it through June 1, 2010, when cards will no longer be valid at other bookstores (they will, however, still be valid among the issuing store's various locations). Removing the gift cards' portability and ABA's management role will significantly cut the costs associated with a bookstore's gift card program.

ABA will continue to honor cards sold by stores that have gone out of business indefinitely.

The association is currently finalizing details about the transition to an in-store program, securing pricing information from Givex for those stores who elect to stay with them, as well as compiling information on other processing options.

ABA's Jill Perlstein or Linda Ford will be contacting all current Gift Card Program participants over the next few months to review the basic plan, answer questions, and provide options that will enable booksellers to make an informed decision moving forward.