WhyTheHeck

The ShopAmerica Gift Card

When people are due to receive a tax cut, a stimulus check, an income tax refund, or even a Social Security check, a ShopAmerica Gift Card gives them the option of either taking the check owed to them or else going to a website commissioned by the Government that shows a list of sellers in their area offering these premium-value gift cards. Those gift cards, for many reasons, will have a face value somewhat higher than the check. Logistically, once a consumer agrees to the card, the Government cash gets credited to the seller’s account and the buyer gets the card instead.

An example might be helpful. Though this gift card could be applied to any government check, suppose that the Government owes you $500 as your annual tax refund. Instead of just receiving the $500, you could go to a website where a long list of sellers are offering a swap for proprietary gift cards worth more. Suppose you like Fuddruckers because they have the “Best Fuddruckin’ Burgers in Towntm” and they are offering $600. You receive a gift card for $600, which must be spent there, over time.

It’s that simple. The Government benefits as follows:

• The extra stimulus comes at no cost over and above what the Government would spend anyway;
• The money the government sends out as gift cards would be spent and not saved; Any retailer, manufacturer, or service provider that passes a solvency screen set up by the Government’s ShopAmerica Gift Card website contractor could offer its own gift card. The seller would receive two major benefits:

  1) The ShopAmerica Gift Card offers very efficient, targeted marketing. Sellers could vary the gift card premium by region or zip code to direct traffic to particular stores in the chain.

  2) Sellers can “borrow” from the Government at no cost. As with any prepaid gift card, sellers get their money before the consumer spends it. In this credit environment, having the money in advance is a huge advantage, on a large scale.

For consumers the advantage is obvious. Anyone planning to spend money will have more to spend. The subtitle of this chapter is “The Grandmother of All Gift Cards” because think of who used to give you “free money” to spend on your birthday? Your grandmother, that’s who. You’d open up her birthday card all the way and shake it to see what fell out of it. Well, that’s what this is — free money, assuming you spend it.