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Recently introduced program from Walmart to buy back gift cards for up to 97% of the value took me back to an email that I had sent to Treasury couple of years back (please see below). Prior to sharing that email, I would like to mention that this is an interesting strategy from Walmart considering that Walmart has the size advantage over current e-commerce sites involved in gift card purchase/resell transactions. Moreover, with up to 3% discount to par value, it would equate to 132 million dollars, even if Walmart makes inroad into 10% of the market (approx. 40+ (~44) billion dollars of say 10% market value would generate the company up to 132 million dollars, if the gift card is given 97% value). More than the revenue from the gift card transactions, conversion to Walmart gift card from other gift cards could potentially increase customer traffic, and increase revenue in the process.
Along these lines, would treasury or credit unions or banks offer a way to convert these gift cards to savings' certificates or bonds for those who prefer to save? Further, these financial institutions could also provide common masses a simple way to buy such instruments instead of gift cards in the first place. It could result in a win/win situation for both the parties.
Please note that this suggestion stemmed out of the stories we constantly hear about Mr. Warren Buffett, a role model for any individual around the globe. We need to remember that Mr. Buffett still lives in the same house, drives the same Cadillac that he owned for a long time and eats at McDonalds. The story is the same with many other such role models across the globe. Let us learn from them. Moreover, this suggestion was put forth to Treasury after reading articles after articles about US household not having enough savings during the financial crises.
By the way, you might be wondering what is the big thing about 44 billion dollars when the US GDP is more than 16 trillion dollars. But, let us look at this number in a global context -
1. 44 billions dollars happen to be the GDP for more than 50% of the countries in the world
2. Even for a high income country such as, US where the median household income is around $52000, it equates to more than 800000 jobs.
3. Most importantly, 44 billion dollars appear to be the number spent per year, which equates to 440 billion dollars over a 10 year period. Such a large amount can expand and strengthen the middle class. Without a strong middle class, it will not be possible for any country to progress in the right direction.
Here is the email that I had sent to Treasury -
From: Treasury.Direct@bpd.treas.gov
Date: October 10, 2012 at 6:56:46 AM CDT
Hello,
Gift cards can't be used to purchase savings bonds. I will forward your suggestion to the appropriate office.
Brenda
Customer Service Specialist
[THREAD ID:1-1S80J9]
-----Original Message-----
Sent: 10/7/2012 10:32:16 AM
To: Treasury.Direct@bpd.treas.gov
Subject: General and Technical Questions About Our Websites
SITE: td01 This email is to find out whether there would be any way to purchase savings bonds for our toddler through the gift cards that we have been receiving for her. Having this option would help us use her gift card for her future savings rather than spending on immediate and many times unnecessary purchases just to use the gift card. If this is not an option right now, would that be something treasury can look into for future implementation. As you know, millions of dollars if not billions go unused in gift cards and having this option would help both the country and the citizens to further the savings.
1. http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28PPP%29
2. http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28nominal%29
3. http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28PPP%29_per_capita
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