business news in context, analysis with attitude

We get a lot of press releases here at MNB World Headquarters, and most of them get perused and then dumped. But this one struck us as interesting, though not in the way the sender may have anticipated.

The headline read: CVS/pharmacy First Coinstar Retailer to Offer Its Own Gift Card in the Coin to Card Program

And the story began:

“Coinstar, Inc., the leader in self-service coin counting, today announced that CVS/pharmacy, the retail division of CVS Caremark Corporation, is expected to have gift cards available in more than 360 Coinstar Center kiosks in CVS/pharmacy stores this summer. The Coin to Card service allows consumers to convert their loose change to a CVS card at the Coinstar kiosk and pay no coin counting fee.

“To use the Coin to Card service, consumers simply select the gift card option at the Coinstar Center, then choose the CVS card (or one of the available eCertificates), pour their loose, unsorted change into the input tray, and then once counted, the CVS card will be dispensed right away and can be used just like cash to make store purchases.”
KC's View:
It’s not that we think this is a bad idea. Far from it. This is a smart idea.

What amazes us is that the release states that CVS is the first of Coinstar’s retailers to offer its own gift cards using a Coinstar machine.

What the hell are the rest of you waiting for?

The selling of gift cards in supermarkets actually is one of our pet peeves about the food retailing business. Not the idea of gift cards, but the selling of gift cards to alternative places for people to buy food, like fast food and quick service restaurants. It makes us nuts when we go into a supermarket are find it selling gift cards for places like McDonald’s or Applebee’s or Chili’s, because in case you haven’t noticed, these all are establishments looking to lure customers away from the supermarket for one, two three meals a week. Sure, the gift card sales go right to the bottom line…but that bottom line is going to get smaller if people keep going elsewhere for their food and meals.

Would Kroger offer gift cards for, say, Albertsons? Of course not. Would CVS sell gift cards for Walgreen. Don’t think so.

We have no problem with supermarkets selling gift cards for non-competitive retailers, such as Nordstrom or Home Depot or iTunes. But they should never, never send people off to the competition.

We’re glad to see that CVS is using the Coinstar machines to promote its gift card. Again, we ask: What the hell are the rest of you waiting for?