Posted tagged ‘Mastercard’

Retailers Worry Shoppers Are Getting Too Accustomed to Deals

January 7, 2009

With shoppers used to steep discounts and competition from liquidating businesses, retailers are worried that they’ll have to cut prices quickly on spring merchandise as well. Frankly, I wish prices would stay low, but I know that retailers are losing a lot of money offering the deals that they’ve had to offer.

From the Associated Press:

Shoppers are getting used to those 75 percent off sale signs, and that’s bad news for merchants who worry they will also have to quickly slash prices on spring goods to attract customers.

Anxieties about how rampant discounts have affected shoppers’ psyches and stores’ profits are running high ahead of expected dismal December sales figures on Thursday. The holiday season is anticipated to be the worst in decades.

Already, retailers including Bebe Stores Inc. and J.Crew Group Inc. are cutting prices on selected spring styles to lure sale-savvy shoppers.

“It is a vicious cycle that no one wants to continue,” said Gilbert Harrison, chairman of Financo Inc., an investment banking firm specializing in retailing. The discounts will be a key topic at Financo’s annual dinner on Monday for retail chief executives.

In addition, retailers expect competition from a rise in liquidation sales _ the fallout from the horrible holiday period.

Merchants struggling to clear out mounds of deeply discounted coats and sweaters are wondering how they are going to get nervous shoppers to splurge on new spring products.

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Buy a Friend a Drink on Facebook…For Real!

December 10, 2008

Many Facebook applications allow members to buy friends virtual gifts, but a new Web site, GiveReal.com, allows users to purchase actual items redeemable in the real world. For instance, a GiveReal user can buy a drink for a friend in an establishment that takes credit cards by giving the recipient a credit on his or her card. GiveReal.com currently uses its own payment system, but it’s hoping for the rollout of a Facebook payment system to speed transactions.

From CNET:

Announcing a new way to get your friends drunk: GiveReal.com, a Facebook application (and standalone Web site) that just emerged out of private beta. It’s hoping to pioneer what the founders call “social e-commerce” by letting people send virtual drinks to each other that can be translated to a real-life libation.

The concept is, in theory, very similar to start-ups like buyyourfriendadrink.com. But services like that are only compatible with participating bars, and Give Real has found a workaround that will make its gifting service compatible with any bar that accepts credit cards. You opt to send a drink to a friend, your credit card gets charged, your friend chooses to accept the payment, and his or her credit card will be credited for that amount of cash when a purchase at an establishment considered a bar, restaurant, or cafe is made.

If the Facebook app is used, activity shows up in members’ news feeds.

Drinks run the gamut from “Draft Beer” to “Pinot Noir” to “Purple Hooter Shooter” (what’s that?) and there’s no fixed price. So, depending on your generosity and wallet size, you can offer up anywhere from $1 to $99. If your recipient doesn’t accept the purchase, you’ll get your money back 12 months later.

On one hand, it is a very cute spin on the virtual-gifting trend that can be used to settle bets from afar (“I’ll owe you a beer if…”) or embarrass your friends by having an apple martini show up in a box on their Facebook profile. On the other hand, you’re really just transferring a dollar amount to your friends’ credit cards that’s eligible for any purchase at an establishment classified by the four major credit card companies (Visa, MasterCard, American Express, Discover) as a “bar, restaurant, or cafe.”

So your friend could be using the $8 for that pina colada and spending it on cheese fries instead. But as they say around the holidays, it’s the thought that counts.

Payments via Facebook
What’s more interesting is that Give Real created its own payment platform to handle the transactions. Facebook has famously had a transaction system in development, something that may or may not have been delayed with the departure of product manager Ben Ling. I spoke to one of Give Real’s founders, and he said that the introduction of a Facebook payment system would make it a lot easier for Give Real. But, at this point, they seem to have figured it out on their own, and say they’ve figured out the tough parts–fraud prevention and security.

The company aims to make a profit by charging a small transaction fee to each buyer and by doing branded campaigns whereby you can “buy” your friends a sponsored variety of drink (say, Corona or Jim Beam). The first of these partnerships should be announced within the month.