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Jackie Huba

July 18, 2008

Handling fee, or manhandled?

Last week I bought a $50 gift certificate for my friend's birthday from her favorite day spa.

As the clerk filled out the certificate, I admired the spa's luxury surroundings. Finished, the clerk said the total would be $51.50.

"What's the extra $1.50 for?"

"The handling fee," she said.

"What kind of handling is involved?"

"Writing out the certificate," she said. "It's labor-intensive." A long pause. "Sorry, I don't make the rules."

Have you ever encountered a "handling fee" on a gift certificate, and what do you think of this spa's use of it?

UPDATE: The owner of the spa has responded in the comments. She says that the fee is for the upgraded gift certificate card and the employee didn't explain that there are card options.

Posted by Jackie Huba on July 18, 2008 | Permalink

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COMMENTS

Manhandled. I am surprised that companies can still get away with charging gift cards at the full face value. I understand the rationale for not charging less, but when someone pays to for a card, that money is already worth less (because it isn't as mobile, liquid, is subject to stupid company rules and price increases, etc.). Just give the $50 next time with a directive where to spend it. Gift cards are lucrative businesses for companies, and they too often take more advantage than they should from their customers.

Posted by: Russell Fisher at Jul 18, 2008 10:21:11 AM

It probably also has an expiration date, right, or slowly devalues after a number of months? I have not encountered a handling fee previously, but I think I would reconsider my purchase at that point.

Posted by: Becca at Jul 18, 2008 10:28:15 AM

I agree with russell. It's a rip-off.

Posted by: Alanna at Jul 18, 2008 10:28:38 AM

The usual rationalization is that the business who issues the gift certificate has use of your money until the gift certificate is redeemed. And this more than compensates for the effort to issue the certificate, or so one would think.

Posted by: Matthew Montano at Jul 18, 2008 10:33:08 AM

How unnecessary are these so-called "handling" fees. Just like those random service charges when you buy tickets or anything else... random fees add up just so they can make an extra buck anywhere they can.

Posted by: Brick Marketing at Jul 18, 2008 10:59:09 AM

I would have asked for the owner or manager and told them why I was not going to buy the gift certificate. Write a personal note and give the $50 to the friend. Why would you want to go to a personal service business that obviously doesn't know the meaning of personal service?

Posted by: Bob Poole at Jul 18, 2008 11:07:19 AM

In spirit, I agree it's an unnecessary handling fee.

But it does fly in the face of the business rule "charge for everything". I think it 's a little petty to accuse the spa of ripping someone off. The terms for buying a gift certificate should be clearly explained to the customer before purchase, however.

The questions I have about the fee:

- Is it really for handling?
- Is it to encourage more spending for a GC?
- Is a $1.50 charge really a "rip-off" in a spa?

I have never had to pay a handling fee for a gift certificate. And when I have issued them, I never charged extra. But it does cost me. And for a small business owner, I can guarantee that you're probably not making $1.50 interest on $50 in this economy.

Side notes

- when you buy a gift Visa/Mastercard in the stores, many of them have an activation fee that is essentially a handling fee.

- in many states, expiration dates on gift certificates is illegal.

Posted by: Doug E at Jul 18, 2008 11:28:00 AM

Seems like a hidden price increase. All that for what might have become a new customer.

Lots of bad publicity from that poor strategic choice IMHO.

Posted by: David Damore at Jul 18, 2008 11:57:03 AM

I think I'm going to side with the manhandled side. The cost for the receptionist's time and the paper/plastic for the certificate should be already bundled into the spa's charges, into that $50 gift certificate.

Ticketba...I mean, Ticketmaster and other entities have raised the bar of hilarious handling fees. We pay them and they continue to raise them. This is my opinion, but I applaud those places that don't give into following the herd. My local music venue, The National, sells their tickets through Ticketmaster, but, if you go to the box office, you get no fees. Other music venues' box offices are charging small fees.

Posted by: Lynne Marie at Jul 18, 2008 12:20:24 PM

So let me see if I can get this straight:

You have someone willing to lock her future purchase to your store so your best idea is to throw out another hurdle to jump? Sounds like a Seinfeld episode where Jerry tries to buy a car off a car lot:

PUDDY: I just left out a couple of things - rust-proofing..
JERRY: "Rust-proofing"?
PUDDY: Transport charge, storage surcharge, additional overcharge, finder’s fee
JERRY: "Finder’s fee"? It was on the lot!
PUDDY: Yeah, that’s right.

Posted by: Bill Gammell at Jul 18, 2008 12:27:18 PM

Manhandled. It surprises me that many folks would tolerate something like this instead of leaving the store. Seems to me the hassle of shopping elsewhere isn't as lingering an annoyance as feeling abused / ripped off would be. Bill Gammell described it perfectly.

Posted by: Carl at Jul 18, 2008 12:49:15 PM

Manhandled. That is not a good policy, especially when you picked up the certificate in person. Maybe they would get away with that if it were a mailed certificate but that is just crazy. Clearly this place is focused on small money and small thinking. They are worried about $1.50 when they are creating a negative experience and likely negative word of mouth from each “gift” that is given. That little gain in their eyes is a signal to customers (gift givers even!) that they should take their business elsewhere. The new book from Peppers & Rogers speaks to this view of short-termism and how it destroys business. Crazy. But you are still a nice friend to buy this for someone!

Posted by: Kim at Jul 18, 2008 1:10:34 PM

To Jackie and most of the commenters: It's not a ripoff if you agree to pay it. Sorry to sound harsh, but the proper way to respond to this would have been not to buy it. Whining about it afterwards does not help the market operate well. How is that merchant supposed to know that this practice is not well received?

Posted by: Adam at Jul 18, 2008 2:35:03 PM

I hate handling fees. I absolutely hate the idea that companies charge extra money for taking payment for their products.

It's an old concept in desperate need of abolishing.

Posted by: Richard Millington at Jul 18, 2008 2:44:19 PM

Adam,
Thanks for your comment. The merchant knows that the practice was not well received because I told the clerk that I thought this was a not a customer-friendly policy. I asked her to relay to the owner/manager that I would not probably be back to patronize the spa because of this policy.

Posted by: Jackie Huba at Jul 18, 2008 2:56:06 PM

Manhandled, for sure.

Companies issue gift certificates eagerly. One of the main reasons is simple profot: many gift cards are never redeemed, for a host of reasons (lost, never get around to shopping there, etc.)

It's just plain insulting to add a $1.50 "handling fee" to a $50 gift card. Who do they think they are - a bank ATM?

Better to charge face value and adjust prices for the service(s), IMHO.

Posted by: Hank Techentin at Jul 18, 2008 3:24:47 PM

Ugggh. No spell check for blog posting...? PROFIT. lol

Posted by: Hank Techentin at Jul 18, 2008 3:27:08 PM

For most people, it would have been a lot better received if the clerk had provided prior disclosure of the fee so you weren't surprised at the end.

That said, the clerk's time is sunk cost. If the fee was purely for her time, the fee should not be valid.

Posted by: Kevin at Jul 18, 2008 3:46:01 PM

definitely a rip off!!! The girl writing out the cert. was already being paid to work there. That is like requiring the receptionist to get a tip for answering the phone! The only good thing was that there wasn't a tax charge on the shipping & handling like so many companies charge now.

Posted by: Cindy at Jul 18, 2008 6:07:48 PM

I think this is a total rip-off. I would probably not have bought the gift card. It really upsets me how people these days have to be paid for every little thing they do and a lot of them act like its killing them to have to do the service you are paying them to do!! (No one goes out of their way to be kind anymore.) Their salaries should cover things like "handling fees" already. Give me the blank certificate and I'll fill it out myself!! My handwriting is probably better anyway..... sorry to get on the soap box but I'm tired of things like this.

Posted by: rumgirl at Jul 18, 2008 7:54:12 PM

This just seems wrong, the retailer is getting paid in advance for something that may not be used in many cases, or that will buy less in the future. Their cost is to account for this money.

If it is so labor intensive perhaps they need to rethink their process, to make it less labor intensive, they might just find that this will reduce errors and get the customer taken care of faster.

I think that many retailers are forgetting that the customer is the reason for their business, not just someone to take for what ever you can. In California I believe it is illegal to charge for a gift certificate, or to put an expiration date on certificates, except for those issued by banks and credit card companies.

Posted by: Ericd at Jul 19, 2008 12:33:37 AM

WTF?? :(

Posted by: VT at Jul 19, 2008 4:35:47 AM

Seems like a covered price increase. All that for what might have suit a new customer.

David

Posted by: david fernandis at Jul 19, 2008 5:14:20 AM

They should by paying you $1.50 to use your money rather than charge a $1.50 service fee.

That's the silliest thing I've ever heard and is about as unfriendly of policy a company could create. Obviously the $1.50 isn't the issue, it's the fact they would charge a service fee for something that most companies would be thrilled to sell.

I'd find another dayspa.

Posted by: Doug Fleener at Jul 19, 2008 6:36:50 AM

Adam,
You are right to a degree, but you really underestimate the power and momentum of social media. Of the more than dozen that commented on this blog, if they are from Austin (and frequent day spas), those will not give biz to that spa and probably prevent another dozen or more from doing so.
Your comment about "whining about it afterwards does not help the market operate well" needs to be clarified b/c it seems a bit unfounded. In answer to your last question, blog comments and the consequent sentiments and actions are what's going to communicate to the merchant that his/her practice is unacceptable. Plus, I wrote them myself (even tho I'm from Chicago) and expressed to them my disapproval for such practices. I encouraged them to make right in order to save face (and save their biz).

Posted by: Will Pareja at Jul 19, 2008 8:09:23 AM

Crazy. I would have immediately expressed my dissatisfaction with the policy and walked out. I agree with one of the previous commenters who suggested giving the $50 as cash with a suggestion on where to spend it.

But here we do see the power of social media.
I've never been to Milk & Honey Spa (I do live in Austin), but I now have a bad impression of them, and will probably never go.
My wife is a frequent spa visitor, but now she'll ever go there now either.
And she'll tell two friends, and so on, and so on...

Posted by: Gary Sherman at Jul 19, 2008 9:01:37 AM

Hi Jackie.

I'm the owner and founder of milk + honey spa. I'm sorry that you were given misinformation about our gift certificate charges. We do NOT charge a "handling fee" though we do offer an upgraded packaging option on our gift certificates. Everyone has the option of buying a gift certificate without the upgraded packaging for no additional charge. I'm very grateful to one of your readers for guiding us to your website, both because I'm passionate about creating fantastic customer experiences (and I'm going to love this blog), as well as becoming aware of this hot button issue (the front desk person you referred to did not pass along that information to me or their manager, as we would have addressed this with you immediately). We are growing very quickly right now and I'm very glad to know that this is something that needs to be addressed with my new front desk crew. I'm sure you're not the only gift certificate buying customer who has been given bad information about the optional upgrade and is understandably peeved. It was actually from client feedback that we decided to offer the upgraded gift card for a small fee, rather than discontinue our original packaging. (The upgraded gift card materials cost way more than the $1.50 fee...) It looks like in this case, my devotion to my clients' feedback has backfired- it seems a bit too easy for information to be miscommunicated/misinterpreted. I was planning on refreshing our gift certificate options by the end of the year to offer just one option that still offers great experiential packaging, but without the need to charge a fee. Looks like I shouldn't wait any longer.

Thanks for the great feedback to everyone on this blog.


Alissa Bayer
owner | founder

Posted by: alissa bayer at Jul 19, 2008 9:29:48 AM

Alissa,
Thanks much for commenting on the blog. Having options for the gift certificate makes sense, especially if your clients were asking for that. The employee I spoke with never mentioned there were options.

Looks like the lesson here for all of us is the importance of employee communications.

Thanks again for your candid response.

Posted by: Jackie Huba at Jul 19, 2008 11:49:56 AM

Good old miscommunication eh?!

Kudos to Alissa for coming on here and posting :-)

Posted by: Jon Moss at Jul 19, 2008 1:48:05 PM

Reminds me of the time when I "earned" a $10 gift card through points at a department store. I was on my way somewhere and decided to grab a shoe polish kit, since mine didn't look as spiffy as they should. It came to $9. The store wouldn't let me use the card.

"It's to be used towards a purchase at the store."

Me: "Yes, and this is my purchase."

Them: "We don't give change, so the total cost has to be over the amount of the card."

Me: "I don't need change, you can keep the extra $1."

Them: "I'm sorry sir, we can't do that."

So much for the gift card that is made for customer appreciation...

Posted by: Scott Stratten at Jul 19, 2008 9:25:03 PM

Is that it? A one sentence line about being sorry you received bad information? Ms Bayer misses the point and a fine opportunity to redefine her customer’s experience with her business.

Posted by: Jeffrey Summers at Jul 20, 2008 2:36:42 AM

Brutal marketing on the spa's part. The point of the gift card is a cheap form of advertising, for them to think that they can pass on the cost of the gift card to someone who got the card is ridiculuous, they should chalk that up to verrrrrry cheap advertising getting that lead through the door, whats next, they do a tv ad and then they ask if you saw the tv ad, you get charged 500 bucks because the tv ad was expensive? gimme a break, a $50 gift card costs the spa a few bucks to make, so what, most marketing campaigns would be grateful to only have spent a few bucks per lead. That gift card recipient is probably someone who never would have come into their spa, so how can you put a price on that, the spa should be paying the person who bought the gift card commision for the new customer.

Posted by: Julio at Jul 20, 2008 3:30:41 PM

I agree with Jeffrey, it is ridiculous for the spa to charge that fee! If everyone who tried to pass on new customers to a business got charged for the introduction, think of how few businesses there would be out there. There is no way I would have gone through with the purchase. There actually should have been an incentive for the person buying the gift card, in my opinion.

Posted by: Tami at Jul 21, 2008 8:24:40 AM

if you have a problem with the way someone does business, don't blast them before granting them the opportunity to respond. if given the chance to make it right or correct an error and they STILL screw up, then it's fair game. if you're going to blast a company or service, then don't link to their site. use the scenario as an exmaple or a teachable moment, but you can do that without linking to their site.

i found this post to be disturbing and not in line with a simple principle - the golden rule. don't do this to others because no one wants to be blasted with the chance to defend themselves.

kudos to the spa owner for her response - she should have had the right to respond prior to this post being published.

Posted by: jake at Jul 21, 2008 9:25:14 AM

I agree with Kim above. The worst thing you can do is to go ahead and pay for something you don't want or agree with. Complaining about it later does nothing. Why is it when we have our wallet out, then find out there are extra "charges", we don't just snap the wallet shut and say, "See Ya!" it's because we are presented with an inconvenience and are in the mode to buy and get out. It's good to leave the RECONSIDER option open.

Posted by: scott at Jul 21, 2008 12:02:35 PM

One of the reasons to offer gift certificates in the first is that in reality only about 50% of those that are bought actually get redeemed (depending, of course, on the business). The rest is sort of like "free money" for the company. Any fees for "handling" would certainly be made up inside the money made from the unredeemed gift certificates. An additional $1.50 seems greedy to me, but that's just my opinion.

Posted by: David Scott at Jul 21, 2008 4:33:22 PM

@Jake, Scott and Adam: If you read the post carefully, you'll notice Jackie is not whining nor blasting the business.

She is simply recounting her experience and asking if readers have had similar experiences and whether they agree or disagree with the service charge.

It's clear from the comments, though, that most people disagree with the practice.

Posted by: Ben McConnell at Jul 21, 2008 4:57:31 PM

Well, not much I could add, but it was funny to read the reactions. Just wondering if this day spa is still open for business, oh well.. or is still charging the handling fee? Someone needs to show the comments to them.

Posted by: Sanjay at Jul 21, 2008 6:33:31 PM

I ran into this service fee phenom over the weekend. My son and I attended an event and he strongly encouraged me to purchase the tickets online to avoid the line. The irony was that the pre-purchase ticket line ran the length of the building and the pay here now was no waiting. I literally walked to a window and bought two tickets. So those lucky pre-purchase folks got to spend $2.50 extra per ticket for the privilege of standing in line.

Posted by: Curtis at Jul 21, 2008 9:57:19 PM

So...

Lessons I learned (and relearned) from this blog as a business owner:

1. People really hate the idea of handling fees - particularly for gift certificates.
2. People are more inclined to blog about or use a bad/annoying experience as an example (sorry, Jackie)
3. As a business owner, I need to regularly search on my business name to clear up misunderstanding and address service issues that I may not been made aware of.
4. Don't give out gift certificates. It seems that many commenters have preconceived notions about them; they may not be as benificial to my marketing effort as I would like.
5. Treat all my customers as potential reviewers/bloggers.
6. Even after the apology/explanation, some of the readers won't believe it or get it. In fact, the actual blog will probably be searchable forever, and people will have the opportunity to half-read the post and get misinformation about your product or service.
7. Fire the employees who have contact with customers and cannot explain store policy clearly and nicely.

I'm sure there's more. As bitter as I may sound, I really do appreciate this blog. As a business owner, this post is one of my nightmares :-)

Posted by: Doug E at Jul 22, 2008 6:24:59 AM

Ok, so the front desk employee messed up, and worse, she gave a laughably bad explanation of the reason for the charge. Do I think that the gift certificate to a nice spa should be beautifully packaged without a surcharge? Yes, but I'm also kind of a design freak. But since it's basically a gift wrapping fee, it's moot. Most of us have probably paid the extra bit to have something nicely packaged for a gift. Another local business, Northwest Hills Pharmacy, wraps things beautifully for free, which means that they're always on my list of stops when I need a gift.

Little extras can make a big difference--or not. With a service business like this, it's the quality of work done and the experience of the customer that gets people in the door again and again. There's a reason this is a favorite day spa in Austin, and it has everything to do with them getting the whole rest of the package right.

@Jeffrey--I thought she responded well, and gracefully. She's sorry, she explained what happened, and she noted the steps she's taking to make sure that this isn't a problem in the future.

Posted by: Sara Rasco at Jul 22, 2008 9:43:31 AM

As the owner of a small retail store, bad move on the part of the SPA owner. While it is true that the gift cards, the packaging, and the service to use them cost money (in some cases it is more expensive than taking credit cards) so what?

You use GC as marketing, not a single person that ever used one of our GC spent just the amount on the card. You loose $3-5 bucks when issuing it, but you get a new client -- or at least someone who was not going to spend the money with you.

Totally bad move... we don't charge handling fees, values don't decay with time, they have no expiration date - and we do give change back in cash if they ask.

Remember: it is all about the experience and putting the customer first.

Posted by: Esteban Kolsky at Jul 22, 2008 11:58:41 PM

The $1.50 is ridculous!

Then again, what I find ridiculous is when a store employee doesn't abide by its own policies and creates a huge hassle for you. Put the handling fee aside...'returns and refunds' open a whole new ballgame of pain...

Posted by: darren at Jul 23, 2008 3:07:49 PM

A handling fee for any gift card is insane. I would of walked out the door and looked for another day spa.

Posted by: tmj at Jul 23, 2008 9:56:55 PM

I'm the owner of the spa that Jackie referred to. A few of you seem to have read my earlier post, but it seems most did not. I'd like to make a few more comments.

1. After responding to the post a few days ago, I immediately terminated the optional small charge for the upgraded packaging. Though our non-upgraded gift cards are just attractive, clearly consumers appreciate getting the upgrade for free.
2. Yes, we are still in business. We're thriving, in fact because we are passionate about creating a fantastic experience and we've developed a loyal client following. Do you really think one small decision like that must tell you the entire story of my business?
3. Gift cards can be a small business NIGHTMARE. They are far from "free money." Most states have strict escheat laws, which require businesses to turn over unclaimed gift card funds to the state. Very scary and very real. And, worse yet, most small businesses don't know this until after they've been 'caught' and have spent the money and are left owing the state, tens or hundreds of thousands of dollars.
4. Gift cards, while a great way to get in new clients, often end up costing a business, like a spa, much more than the lifetime value of the client. Here's why: 1) a gift certificate transaction adds between 10-30 minutes of extra time to the total transaction- the buyer usually needs some help and guidance figuring out what specifically to get for the recipient, the recipient, often has never been to our spa or any spa for that matter, and because we care about ALL of our clients we take lots of time helping them to determine what service to receive, as well as explaining what will happen once they change into their robe and slippers and how to get the most out of their experience. 2) gift certificate clients rarely turn into our core client base. While it certainly happens often, and when it does I am very grateful, it is still a small percent of overall gift cert holders that convert to repeat clients compared to those that come without a gift certificate. (Converting first time clients is THE most important metric to my business.)
5. Why is it so wrong to charge for an upgraded packaging? I've been to many a department store, and when purchasing a gift, I've decided not take the free gift wrap and instead opted for the much more artfully wrapped gift for a small fee. As I mentioned, I decided to do away with the optional fee, so now all of our clients are going to get our lovely packaging. But why is it that consumers feel everything should be free?
6. I applaud consumers who take the time to participate in their experience, rather than just complain about it. As a small business owner, I am always very grateful to our clients that take the time to constructively discuss things with us that they are displeased about so we do something to address them. You'd be amazed at how many small businesses will respond quickly to constructive feedback.

Thanks again to Will for bringing this to my attention last week!

Posted by: alissa bayer at Jul 24, 2008 4:51:19 PM

It's good to see a business owner passionate about communicating with their customers and taking feedback on board. The problem here seems to be less the $1.50 charge than the behaviour of the person on the front desk who didn't explain the options then displayed 'Teflon shoulder' tendencies. It's alarming how many service employees don't get the key principles of service which should have been installed in Kindergarten - be a nice person, be polite, explain things simply, take responsibility for what you say and do.

Posted by: Claudine at Jul 25, 2008 5:46:47 AM

Even though I've already spent more than $1.50 of time commenting, here's another two cents...

Even though Jackie mentioned the fee attached to the gift certificate (the fee is now discontinued), the reason she was buying the GC was because it was her friend's FAVORITE SPA. Obviously, this was never an issue for Jackie's friend. And Jackie is a great friend to not let $1.50 stand in the way of her friend's happiness and birthday gift. Her friend obviously enjoys the greater benefits of the spa as do many people.

We all strive for perfection relating to the (actual and potential) customer's perceptions and experience. Sometimes, we fall short. Alissa is being very gracious and attentive to the comments on this post, some of which border on being rude. I only hope I can be as gracious in similar situations.

Posted by: Doug E at Jul 25, 2008 9:46:22 AM

Hi, I just found your blog but wanted to say that I liked it enough to subscribe. I have to agree with you on this post as well, too many companies are sneaking in hidden charges and naming them a handling fee when there is obviously no reason it shouldn't be a disclosed fee up front or not included at all.

Posted by: Entrepreneur at Jul 27, 2008 7:28:26 PM

I'm surprised the owner knows your blog and commented it! The power of blogs!

Posted by: MarketingDeviant at Jul 30, 2008 7:50:37 PM

My wife and i use gift cards all the time, the only ones that we have noticed with a service fee like that are the American express and visa gift cars, I'm not sure if stores can charge a fee of their own just for scanning it.. either way total rip off...

Posted by: Don at Jul 31, 2008 6:09:47 PM

Well for a measly $1.50 entering the till, there's a pretty negative customer interaction going on here, made worse by the fact that there are two customers involved: the puchaser of the certificate and the recipient (who will probably hear the full story later on).

If I was a business owner I'd be happy to absorb the 'handling cost' simply to ensure that a customer doesn't walk out of my store feeling ripped off and annoyed at my business. If you're doing your job right you have the customers bouncing out of the store, excited at their interaction with your business and keen to return.

Posted by: hatrabbit at Jul 31, 2008 11:57:05 PM

This illustrates the importance of having a Google Alert set up for your business name!

A Google Alert can "alert" you to when your business name appears in a conversation in the millions of blogs or websites on the internet!

Posted by: Virtual Impax at Aug 1, 2008 9:33:00 AM

This is a great post but many of the comments are off base. Please take a moment to read Alissa Bayer's comments (search "alissa bayer" on the page) before you comment. You'll appear much more intelligent if you do.

She gets what you are saying. She's done something about it. And she's grateful for the input. I'm uncertain what else she could do other than refund the $1.50 which would probably be more hassle for the customer than it's worth.

Posted by: Greg at Aug 1, 2008 9:47:07 AM

To the owner:

In the order of the last points you made.

1. I'm not sure you needed to eliminate the fee for upgraded packaging, but that is your choice. If the fee is justified - based on the value delivered and it is properly promoted, I personally don’t see the problem. The magic is in how the value is communicated.

2. Success in running a small business is a big miracle and a ton of hard work every day. Congratulations!

3. If gift cards are a nightmare, why continue offering them? If the answer is "because I have to, to remain competitive," then deal with it! Does YOUR state require you turn over money collected for unredeemed gift cards, and if yes, after what period of time? If your state doesn't require your business to forfeit money collected for gift cards not used, this point is moot and $51.50 in gross margin for just ringing up the sale seems to me to be a pretty lucrative value proposition. Even if you do have to forfeit the money after some period, an interest free loan on the same amount for an extended period of time also seems to be a rather advantages business practice.

4. Crocodile tears - sorry.

5. I find that consumers don’t think everything - or anything for that matter, should be free. I find that they just want value and they appreciate being treated well. They also don't like being made to feel like they are being taken advantage of in any transaction. Probably a better approach would have been to not use the terminology, "handling fee" which has a very negative connotation with the average consumer. It sounds like a "non-value added" surcharge frequently used by opportunistic companies to disguise the true cost of their product or service. Perhaps if you called the value add what is really was, "gift wrapping" there may have never been an issue at all. $1.50 for "gift wrapping" seems entirely reasonable and in fact as you point out, in the department store setting, customers seem to be entirely comfortable with paying extra for the extra value of the wrapping.

6. Unfortunately it is human nature to discourse more liberally about negative experiences than the positive ones. This phenomenon is well understood, widely documented and easily observed. For better or worse, you will have to cope with that reality. On the other hand, it is I think, one of the more compelling motives to work on an excellent customer experience (which you clearly do already). Being aware and sensitive, to the effects on customer’s perceptions of the value proposition that your business offers, which result from your product and service decisions, will contribute to your continued success.

Keep up the good work, and as you so astutely point out, your business is not defined by this one isolated situation. But a pattern of thinking and conduct, that renders many similar future incidents could be reputation damaging in the long term, so you are correct in my view to take all customer complaints and comments to heart and to think about their impact to your reputation, which is of paramount importance.

One last thought, you could have turned this into a positive promotional opportunity by communicating to your customer’s something along the lines of, "To our valued customer friends, by popular customer request, gift packaging is now complimentary for gift cards..."

Posted by: Marketing Teacher at Aug 1, 2008 10:07:06 AM

I just circled back to this blog because another prominent blog/email newsletter service found this discussion.
I would like to add that there should be a "rule" that a person should not join a comment thread w/out having read the post itself and the previous comments. Some who have jumped in mid-stream or later in the game apparently didn't do that (and do so w/ objectivity and fairness) thus repeating the comments of others or not taking into account the development of the conversation. I guess it would be hard to impose such a rule on the info-bahn b/c at the end of the day, every person's criteria for objectivity is or can be subjective.

Posted by: Will Pareja at Aug 1, 2008 10:32:15 AM

We at bowlingball.com charge "shipping/handling" on gift certificates when our customers want them shipped through the post office, or they want a hand written card included.

If customers want their gift certificate sent by email it is free as you would expect.

So there are definitely reasons for extra charges on some gift certificates.

I can imagine a customer service person over the phone making mistakes. We use an outsourced call center, and they are always telling people wrong information, or leaving out important details. MORE TRAINING... :(

Posted by: John Congdon at Aug 1, 2008 10:59:27 AM

As has been said, the clerk is the problem, not the $1.50.

If it had been explained properly, it would be no different than the stores selling "gift card holders" for $2-$3 or more. right?

Posted by: Tim at Aug 1, 2008 10:17:31 PM

Alamo Draft House charges a fee to buy tickets online. Makes no sense to me. Isn't that easier for them? Why inconvenience me, then? Argh.

Posted by: Laura at Aug 3, 2008 12:40:09 PM

Hahahahhahaha - I can't believe the comments justifying the handeling fee from business owners. If they understood business they would know that the gift certificate is magic free capital. (ie: PROFIT CENETER) some percentage of them NEVER get redeemed. Also, they have the cash without having to have given up the merchandise or service yet that reduced the need for capital left in the company for inventory. -z

Posted by: Bill at Aug 3, 2008 5:51:42 PM

I'm getting sad about all this... There was a problem, it was signaled, the owner had the courage to explain and comment and take the blame. Until there, it's very interesting and useful.
And then it starts,...you get a load of comments that are plain stupid, either because they restate the obvious, or because they don't take into account what's been written before, or because they don't anything new to the discussion. If this is what customer interaction looks like, I'm not sure i really want it...
(A business owner)

Posted by: Guido Everaert at Aug 11, 2008 6:16:33 AM

Ah...there's the hidden expense. Spell "Upgrade". Ok, now...hand-wrrrrrite it.

See? It's expensive.

Posted by: Zane Safrit at Aug 13, 2008 1:10:29 PM

Well, I for one am pretty satisfied with the spa-owners comment. It was an understandable mistake.

Posted by: Peter at Sep 12, 2008 7:13:02 PM

I can’t believe that handling fees even exist anymore. I haven’t heard the term in so long, I figured that they were just a thing from infomercials of the 80’s.

I’ve recently seen them again on eBay. Handling fees? Bah!

As for the gift certificate, since you had not yet paid, you could have just left. Besides, if it’s so “labor-intensive”—mmm hmm—to fill it out, ask if you could just fill it yourself. A name here, an address there, and save $1.50 (hey, it’s not like it was 12¢ like on Seinfeld). ;)

Gift certificates are as much a racket as mail-in rebates. They do that instead of discounts because both return better for them. A lot of people don’t use them befor they expire, or at all even, and thus profit for the store; free money for nothing. :|

Posted by: Bob Bobson at Sep 17, 2008 5:34:06 PM

Seems that the day spa owner has it wrong. You just did what they pay advertising for - deliver a new client to their spa. If they were smart, they would have paid you what it normally cost them in marketing to generate one new customer.

Then next time, you would almost certainly have bought from them again and, oh yeah, they wouldn't be getting hammered on your blog but most likely praised.

Thx

Posted by: Will at Jan 7, 2009 12:56:51 PM



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