22 November 2010
How does a Store make money by selling gift cards for ANOTHER store?
Posted by admin under: Mathematics .
I am just wondering….Walmart sells gift cards for Best Buy, circuit city, etc…. If I buy a Best Buy gift card from Walmart, how does each store make the money? Thanks for helping!!
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7 Comments so far...
david.wood267@btinternet.com Says:
25 November 2010 at 10:29 am.
Same as the giant supermarkets selling alcohol cheaper than cost to pull in the punters
Firefly Says:
28 November 2010 at 1:58 pm.
Maybe they are linked stores like safeway and **** smith (In Aus).
Raichu Says:
28 November 2010 at 11:20 pm.
I don’t know the specific answer, but one way is that one store could get a commission for selling a card normally sold in another store. Or they sell each others cards simply for supplying a greater choice thereby increasing the number of customers, who would buy from there instead of a mutual competitor like a newsagent.
ATH5445 Says:
29 November 2010 at 11:55 pm.
The store that has the card pays Walmart a couple dollars for every card they sell. Just like the phone cards at the store.And like the electric bill pay here places,the electric company pays the store for each bill they collect.
parkdad73 Says:
30 November 2010 at 1:25 am.
Best Buy makes the money off the mark-up on the product and Walmart gets to keep some of the money spent on the gift card (say 10%) and give the rest to Best Buy.
Granted Best Buy makes less than they would have made if you simply bought the item with cash, but Best Buy has a definite sale at that point so they make out as well.
shadowca1964 Says:
2 December 2010 at 4:57 pm.
by offering a large choice of cards a store offers consumers a choice of cards to buy (taking in more customers). Not sure but they may buy the cards bundled and at a discount from their face value (they buy the cards at less then face value). When they sell them at full face value they then make their money on the cards. Or they may receive a commission from the issuing store for every card they sell
saejin Says:
5 December 2010 at 12:47 am.
Lets say we have two stores A and B
B wants to sell gift cards with a face value of $100 of store A product.
Store A Sells the gift cards to store B at a discounted rate, typically around $66.
Store B then finds an idiot (who could simply give the person $100 to spend as they like) to buy these gift cards at $100 + tax