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MacRumors
Feb 12, 2004, 02:08 PM
iPodLounge posts a photo (http://ipodlounge.com/ipodnews_comments.php?id=2955_0_7_0_M) of new iTunes Gift Cards which will be available at Target stores.

The cards are expected to go on sale as of February 15th. Based on the photo provided, it appears the $15 card will allow customers to purchased 15 songs from the iTunes Music Store.

Napster had previously launched (http://www.macrumors.com/pages/2003/10/20031027040405.shtml) similar Pre-Paid song cards -- also available at Target.

wordmunger
Feb 12, 2004, 02:10 PM
Very cool. Another way for non-cc holders to get iTunes. I think my 12-year-old son would be very interested in these.

jcshas
Feb 12, 2004, 02:14 PM
my wife works for the company so I wonder if the team member discount applies?

brossow
Feb 12, 2004, 02:15 PM
Kinda interesting, and it's not a HUGE deal, but with the gift card you're paying a penny more per song PLUS whatever your local tax rate is. Nice to have the option, though.

iggyb
Feb 12, 2004, 02:19 PM
Originally posted by Macrumors

The cards are expected to go on sale as of February 15th. Based on the photo provided, it appears the $15 card will allow customers to purchased 15 songs from the iTunes Music Store.



Wha? Does this mean that tax is waived when you use these gift cards?

Bilvox
Feb 12, 2004, 02:20 PM
notice the timing... supposed distribution come the 15th... and apple.com is pushing the ipod as a "love-day" gift.
ahh those folks at apple have it all planned so well. ;-)
-bilvox

ckelley
Feb 12, 2004, 02:23 PM
Originally posted by iggyb
Wha? Does this mean that tax is waived when you use these gift cards?
I don't pay tax on Pepsi's iTunes winning codes, so I would guess this is the same way. Plus, you're probably gonna get tax charged on it at the register.

kuyu
Feb 12, 2004, 02:25 PM
My local grocer, Kroger, sells the napster cards. I assume they will also sell these itunes cards. A good idea for gifts, and parents who don't trust their kids with the cc #.

iKenny
Feb 12, 2004, 02:35 PM
As long as Apple keeps up the intense marketing push it's got going right now (I've noticed the iPod+iTunes tv ads are back on, along with the print ads and the Pepsi promotion), it can keep its position as the dominant music store. Just keep getting the name out there; eventually this won't be necessary, but with the flood of new stores they have to make sure absolutely everyone knows about iTunes.

Lanbrown
Feb 12, 2004, 02:36 PM
Originally posted by brossow
Kinda interesting, and it's not a HUGE deal, but with the gift card you're paying a penny more per song PLUS whatever your local tax rate is. Nice to have the option, though.

And Apple makes less money with them as well. Target isn't selling them for free, so they get some money, add in the distribution, printing and insertion into iTMS. Apple is using this as another avenue to get people to spend money at the iTMS. Convenience items are usually more expensive anyway.

michaelrjohnson
Feb 12, 2004, 02:36 PM
all i can say is that this is a very good thing for apple. branching out thier marketing strategy, especially with a retailer like target (now known for being hip and stylish, as well as budget-oriented) improves the image of iTMS and apple in general.

things are looking bright for apple! :)

wordmunger
Feb 12, 2004, 02:42 PM
Originally posted by iggyb
Wha? Does this mean that tax is waived when you use these gift cards?

Actually, I suspect you pay tax when you buy them. Just a theory anyway. Also for some reason I haven't been charged tax on iTunes lately.

Grimace
Feb 12, 2004, 02:49 PM
This is a great thing for Apple. It adds depth and breadth to accessability to Apple products.

yoman
Feb 12, 2004, 02:57 PM
Originally posted by wordmunger
Actually, I suspect you pay tax when you buy them. Just a theory anyway. Also for some reason I haven't been charged tax on iTunes lately.

ah because the tax bill is hidden and is accumulating. Come next april you will be surprised to notice a $10 tax fee per song plus interest since purchase date.
:D

JGowan
Feb 12, 2004, 03:42 PM
Nope... no tax. It's just like any other gift card you buy... you buy a $20 gift card and you pay $20.

Now, when a person USES the card, the tax comes out of the card or out of their pocket if they exceed $20.

But, I guarantee you that the purchaser will not pay the tax FIRST at the register for the cards.

----------------

11 songs x 99 = $10.89 + 90 TX = $11.79.

Apple charges you TAX when you ACTUALLY BUY something.

Le Big Mac
Feb 12, 2004, 03:50 PM
Originally posted by JGowan
Nope... no tax. It's just like any other gift card you buy... you buy a $20 gift card and you pay $20.

Now, when a person USES the card, the tax comes out of the card or out of their pocket if they exceed $20.

But, I guarantee you that the purchaser will not pay the tax FIRST at the register for the cards.


But if you get 15 songs for $15, then you do avoid the tax. It's not like a calling card, where after 14 songs you won't have enough for the 15th.

As for Apple losing money on this, remember that they pay a credit card fee now, and they avoid that. So there are savings as well.

formatc
Feb 12, 2004, 03:57 PM
The card is a loss leader.

Loss leader: A retail item advertised at an invitingly low price in order to attract customers for the purchase of other, more profitable merchandise.

And that more profitable merchandise is?

The iPod of course.

Snowy_River
Feb 12, 2004, 04:01 PM
Originally posted by iggyb
Wha? Does this mean that tax is waived when you use these gift cards?

Only if you pay tax when you buy the card. If you were to have to pay tax both when you bought the card and when you downloaded the song, then that would be double taxation, and that's illegal.

However, here's an interesting thought, what if Apple has decided to pay the tax for us? Some people are saying that they're not paying tax anymore... I'll have to try it...

jholzner
Feb 12, 2004, 04:40 PM
Originally posted by Snowy_River
Only if you pay tax when you buy the card. If you were to have to pay tax both when you bought the card and when you downloaded the song, then that would be double taxation, and that's illegal.

However, here's an interesting thought, what if Apple has decided to pay the tax for us? Some people are saying that they're not paying tax anymore... I'll have to try it...

They were charging me tax when I first stared using the iTMS...but they've stopped...not sure why but I'm not complaining. :)

ccuilla
Feb 12, 2004, 04:48 PM
ABOUT TIME!

When I saw the Napster ones at some gas station, I thought it was a brilliant idea and that Apple BETTER get going doing the same thing. Mindshare!

They NEED to squeeze and squeeze the life out of WMA. The MS crowd will NOT give up easily. But make it so that no one can profit from selling (only) songs and very few companies will be willing to lose money just for MS.

ccuilla
Feb 12, 2004, 04:52 PM
I hope the iTMS gift cards are racked up sitting right next to iPod displays at the Target stores.

Apple could really do something cool like an "iTMS within a store" kiosk-ish thing. Listen to sample songs. Get a free iTunes CD (save the download). Selling iPod accessories right there too. Etc.

coolsoldier
Feb 12, 2004, 06:12 PM
This is good for Apple's mindshare, because anything in a store is an impulse buy. You can buy an iTunes gift card at Target with a lot less thought than it takes to actually download iTunes, register, type your credit card number, and so on.

I'm not sure about the tax, though. I've paid my local 9 cent sales tax on every iTune purchased so far, as recently as February 8. Maybe some states just don't charge tax on downloads?

dukemeiser
Feb 12, 2004, 06:20 PM
Originally posted by jholzner
They were charging me tax when I first stared using the iTMS...but they've stopped...not sure why but I'm not complaining. :)
Same here. I thought it was because Apple had to have a physical presence in my county. Every other month I have to re-validate my card and the Music Store always makes a big deal about what county I'm in.

the_mole1314
Feb 12, 2004, 06:51 PM
Anyone else think this would be cool to throw into frozen pizza boxes and stuff? Not a $15, but mabey a $5 one. It's a good way to get iTunes recognition to a level of check-out lane aquantancy.

Trowaman
Feb 12, 2004, 07:04 PM
Originally posted by the_mole1314
Anyone else think this would be cool to throw into frozen pizza boxes and stuff? Not a $15, but mabey a $5 one. It's a good way to get iTunes recognition to a level of check-out lane aquantancy.

Mmmm, I'd go more along the lines of Pizza Hut, Dominoes, Papa Johns. Fresh, piping hot pizza with iTunes gift certifacate attatched to the box.

macstyle
Feb 12, 2004, 07:15 PM
at my target store we have had these in the backroom for about two weeks. we also resently put up our mini-ipod display with the coming soon boxes.

Lanbrown
Feb 13, 2004, 08:37 AM
Originally posted by Le Big Mac

As for Apple losing money on this, remember that they pay a credit card fee now, and they avoid that. So there are savings as well.

For a high volume of transactions, the service charge is negligible for CC purchases.

ClimbingTheLog
Feb 13, 2004, 08:42 AM
Originally posted by macstyle
at my target store we have had these in the backroom for about two weeks.

So what you're saying is you've been holding out on us, huh macstyle?

ClimbingTheLog
Feb 13, 2004, 08:43 AM
Apple can't keep selling these things forever. Think about it - Target isn't going to sell something for no markup. So Apple isn't getting $15 for them from Target. I bet Apple is giving up all of its revenue on each song to Target.

This is a great strategy for getting iTunes into the collective conciousness, like the Pepsi promotion. But at some point Apple has to stop losing money on each song sold - it will eat into the iPod profits before long.

Then again, once iTunes is embedded in the culture maybe Apple can renegotiate their terms with the RIAA and make some profit on these cards.

wdlove
Feb 13, 2004, 10:42 AM
I did see the iTunes at my local Apple Store also. That is the only place that I've seen them. They would make a nice Valentine's gift for that special lady.

ccuilla
Feb 13, 2004, 01:53 PM
Originally posted by ClimbingTheLog
Apple can't keep selling these things forever. Think about it - Target isn't going to sell something for no markup. So Apple isn't getting $15 for them from Target. I bet Apple is giving up all of its revenue on each song to Target.

Don't be so sure about this. Like Apple has demonstrated with their strategy, a company doesn't have to make money on EVERYthing it sells. Target knows this too. They may get some other benefit from it. Draw traffic into the store? One impulse purchase leads to 2-3 more? Sell iPods as well? Who knows. But don't ASSUME that Target is making anything on this.

chameeeleon
Feb 14, 2004, 09:23 AM
Apple's added the cards to the iTMS frontpage now, on the source list below "Allowance". By the looks of it, there's a 15 digit code that you have to scratch on the back of the card (which would be covered by the cardboard, to prevent people from getting the code without paying).

laserbeahm
Feb 16, 2004, 12:20 AM
This is probably a profitable venture for both Apple and Target. Sure, most of the gift card revenues probably go to Target, but Target sells the iPod. Having ITMS gift cards may make the iPod look more viable, and in turn drive more iPod sales. On the other hand, having ITMS gift cards right next to iPods is a great add-on opportunity. Apple gets big profits off the iPod, and possibly the gift card, and Target gets money for both.

IscariotJ
Feb 16, 2004, 08:13 AM
Does anyone know if there are restrictions on use of these cards, or the gift certificates? A friend of mine will be on holiday in the US shortly, if he picks me some up, will I be able to use them in the UK?

ccuilla
Feb 16, 2004, 03:51 PM
Originally posted by ccuilla
I hope the iTMS gift cards are racked up sitting right next to iPod displays at the Target stores.

Apple could really do something cool like an "iTMS within a store" kiosk-ish thing. Listen to sample songs. Get a free iTunes CD (save the download). Selling iPod accessories right there too. Etc.

Looks like Apple is doing this. Almost. The kiosk is missing two things (IMHO):

1. A stack of iTunes for Windows CDs to take home and install.

2. A computer with speakers, with iTunes running, giving people a first hand try to sample songs, etc.

the_mole1314
Feb 16, 2004, 09:27 PM
Also, Hechs still has their iPod display up near me, so that'll be a good place to sell gift cards too, and also have iTunes display.