Swipe envy
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Philip Brewer All the cool kids have credit cards. What if you don't? What if you are so young, so poor, so uncool that you can't get one? Do you have to stoop to paying for your food with actual money? Not any more! These guys have the cure for swipe envy!
Look at the poster in the picture. This fast food company (name slightly obscured) is marketing their paid-value card to people who can't get a credit card, but wish they had one so bad that they'll settle for a paid-value card that kinda looks like a credit card.
Of course, I understand the attraction to the merchant of a paid-value card. They've already got your money, so they're pretty sure you're going to buy stuff from them. (And, if you don't, that's okay too--see above where they've already got your money.)
From the point of view of the purchaser, a paid-value card is a dead loser:
- You take perfectly good money that you can spend anywhere, and turn it into non-money that you can only spend at one place.
- You miss out on the chance to earn interest until you spend it.
- Most paid value cards charge "inactivity" fees (and other fees) to make it easy for them to keep the money that you've given them without having to provide any goods or services.
- You have no protection in the event the company declares bankruptcy (or, for that matter, in the event the company just decides that they'd rather keep your money and not give you anything).
Now, the disadvantages of a paid-value card are pretty obvious. The only reason I can imagine wanting to get one is if I was paying for someone else's food, and worried that if I provided cash, the guy would blow it all on something like bus fare or laundry. (Of course, it doesn't really work even for that. The guy who would really rather spend the money on something frivolous like textbooks can always find someone who wants food to buy the paid-value card, perhaps at a small discount.)
I feel sorry for the guy who's so ashamed of not having a credit card that he'd fall for a marketing ploy like this. It also offends me to see companies behave this way--I couldn't patronize a company that ran an ad like this. I expect, though, as the credit squeeze makes credit a lot harder to come by (not just mortgages), we'll see more and more ads like this, marketing to the folks with swipe envy.
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You probably don't watch enough TV to know, but Visa is running a whole series of ads like this right now with the catch phrase Life Takes Visa. They show young, hip people doing a synchronized dance to music buying stuff by swiping a card and then the music comes to a screeching halt when some loser tries to pay with cash. I think we'll be seeing a big uptick in "swipe envy".
It's just a dressed up gift certificate/card. :)
You're right! Paid value cards have no value. That's why I think cash gifts are a-ok.
although gift cards like this are generally bad, the marketing seems to be intended as humor, given there other ad campaigns
I absolutely agree with your points, Philip. But I will sheepishly admit that I recently bought my first-ever stored value card.
Here's what made the difference for me:
• It's a locally-owned, independent coffeehouse. The manager personally greets us and remembers our preferences. She gives us extra for free, since we bring our own cups. So, I like 'em and want them to continue to succeed.
• My husband and I have a long-standing, once per week date at this place. We're quite likely to empty our card in less than two months. It's certainly not the most frugal way to enjoy coffee, but considering that we lounge around and chat and read their newspapers for at least an hour, it's reasonably priced entertainment.
• They recycle the cards when customers are finished with them (i.e., clean them up and reuse them).
• They sucked me in with their "buy a $50 card, and we'll add $10!" offer. ;-)
I have found this card somewhat inconvenient, because I feel I still need to bring cash anyway (for the tip jar), and now I also have to keep track of something extra. I like to support this establishment, though, and we get an extra date-and-a-half out of the deal. And so I made an exception.
Are you sure they're not trying to be funny? That chain's advertisements are currently a little on the sarcastic side.
Yeah, I accept that the fast food vendor in question was trying to be funny. (Actually, I was trying to be a little funny too.)
But I also think the topic has limited potential for humor. Swipe envy is a real phenomenon, but over-use (and mis-use) of credit cards ruins people's lives.
In the 1950s and 1960s, drunk driving was considered a appropriate object of fun. You can see movies from those days where you're supposed to laugh when some plastered guy gets poured into his car and weaves on down the road. I'd like to see social circumstances change so that poking fun at misuse of credit makes people wince just like like poking fun at drunk driving does today.