Getting someone to commit to an impulse purchase with one click is the holy grail of sales. Yes that is worth a hell of alot of money.
Thats a typical law firm fee for a class action.
Got a tip for us?
Let us know
Become a MacRumors Supporter for $50/year with no ads, ability to filter front page stories, and private forums.
Apple Pays $100 Million to Settle Developer Lawsuit and Agrees to Multiple App Store Changes
- Thread starter MacRumors
- Start date
- Sort by reaction score
Yes they are two different things and the manager I talked to said they are doing NONE of those two things. Essentially the store only gets payment for the physical rack space the cards take up. They do not take a percentage of each and every gift card sold. So Apple is trying to do this on the Epic's VBucks which is a bit bad. Look, I like Apple as much as anyone here, even have a tattoo with the Apple logo. But they should NOT be taking a 30% cut on VBucks.
Yes......I know they are two different things and the manager I talked to said that they are done NEITHER of the two. Both things
So where would you suggest Apple take a cut ?
Typically retailers get 10-15% of the sticker price on gift cards. They are also one of the most profitable scams out there as only around 75% of them ever get cashed in (less in the case of boutique stores).
Perhaps the store your manager friend talked to has some other deal going e.g. Free stuff instead of profit per sale.
My experience tells me the manager is mistaken about how gift card fees are split, it may simply nt show up as a line item in his P&L. Gift cards can afford a decent cut due to breakage - i.e. the % that never get redeemed.
What is wrong with 30%? Everyone focuses on that but that's not an unusual gross margin.
To be fair, less than 70% of the sweaters you were going to buy before you decided on the gift card ever get worn, so the sweaters are the bigger scam.
I mean if you REALLY want to be technical, it TECHNICALLY is a split per gift card sold, but that is just technicalities.
You pay for a space in the rack - whether you have 1 or 10 gift cards. What the store does NOT do is take a cut PER CARD. Like I said, if you want to get technical, say the space costs $10 and you only put one card there, then yes its $10 per 1 card. But its $10 even if you have 10 cards (assuming the space is static, more like racks where you put card after card).
In that sense, $50 for a space to put your cards, and you put 20 cards there, yes it can be seen as markup per card. But the space is static in some cases.
I am not sure what you fail to understand about gift card sales are generally done by a broker who takes a % of teh face value and pays to the retailer part of that %. The broker may also charge a fee just to carry the card, but the normal relationship includes a % of sales.
I am talking about the store here, not the broker. JUST like Apple's charging of 30% for VBucks being utterly inappropriate, stores like Target do not have a 30% markup on each and every gift card sold. I am not talking about brokers here. The manager I specifically talked to said they take 0 from each and every single card sold. The only cost to company that want their cards at the store is the physical shelf space.
The broker is the one who secures the space and pays the retailer their cut of the sales volume, so they are part of the revenue stream for the store.
If Apple drives enough vBucks business 30% is not a bad cut, especially given the no doubt huge profitability of vBucks.
No, the retailer doesn't get 30% probably but they do get a % cut from the broker for every card sold.
Based on what I know and have been told by people in the business that would be an unusual deal, as the typical one is a cut from each card sold.
Paying for space makes no sense vs a cut of sales as sales could vary greatly from store to store and either require a separate deal for each, which is costly to make and track or some stores never make money or operate at a loss for the GC issuer. If you paid for space you'd pull cards from the losing locations and possibly pay for placement at high traffic and sales ones along with a cut; just as you pay slotting fees in some industries.
