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Circuit City, Best Buy, Others, Enhance Gift Cards

By Dec 13, 2006

Circuit City’s newest gift card is just as valuable at the DVD player as it is at the cash register.

Circuit City is the first U.S. retailer to issue a gift card that doubles as a DVD. The card, designed for the holidays, carries a sample from eMusic, TV commercials, product information and a game.

Best Buy and Nickelodeon are collaborating on a similar DVD gift card featuring Sponge Bob SquarePants. That card will be shaped like Best Buy’s iconic yellow hangtag.

Both cards are created by digital publisher Serious, in London, which has just launched its high-tech cards in the U.S.

The cards are the size and shape of a traditional gift card, with CD or DVD format on the back (and a special coating to resist scratches). Cards fit into a standard CD or DVD player to deliver music or video. They can carry two sets of content, one that plays on a computer and one for DVD players. With 180 megabytes of memory, each card can hold 10 minutes of video, or 50 songs via MP3.

Gift cards have long been a popular premium, a free perk that brands gave to consumers. Now they’re also big business: Holiday sales alone will total $24.8 billion this year, up 34% from last year, according to the National Retail Federation.

The more ubiquitous cards get as a retail product, the less novel they are as an incentive tool. New features like this DVD technology give cards a promotional twist again.

Card maker InComm, which signed a distribution deal last month with Serious to be the exclusive U.S. distributor of Serious cards, also has its own promotional overlay. It use a scratch-and-win feature, called Win It Now!, that puts an instant-win game on the back of traditional gift cards. Brands can use the scratch-off feature to deliver a discount, a separate premium or additional dollars to the card’s face value.

Atlanta-based InComm sells branded gift cards from restaurants, airlines, hotels and a wide range of retailers. Its cards sell in 145,000 stores, including supermarkets, c-stores, drug stores and office supply chains.

Meanwhile, American Express has launched three lines of gift cards that carry a menu of offers on the back of each card.

Offers range from free desserts from participating restaurants to discounts of 5% to 20% from participating retailers. Cardholders register at AmericanExpress.com/specialoffers to enter the serial number from their card. That triggers a listing of coupons for the special offers; cardholders print out the coupons they want and then redeem the offers directly at retail.

AmEx has a line of cards each for kids, teens and birthdays, with offers tailored to the target audience and occasion. For example, AmEx’s Especially for Birthdays card offers a free game at AMF Bowling lanes, $10 off a purchase of $50 or more at Foot Locker or Champs Sports, and access to the American Express Ticket Savings Center at Ticketmaster.

Other marketers fielding offers through AmEx include Bed Bath & Beyond, Blockbuster Video, California Pizza Kitchen, Gateway Computers, KB Toys, McCormick & Schmick, Papa John’s Pizza and Pier 1 Imports.

AmEx also has tailored gift cards for Dining, Movie Lovers and The Bride & Groom, with special offers attached to each card.