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This is perfect case of merchant-approved business model with well-calculated losses to fraud as a cost of doing business. If merchant would want - they'd clos

by gesman 11y ago

This is perfect case of merchant-approved business model with well-calculated losses to fraud as a cost of doing business. If merchant would want - they'd close this loophole within 5 minutes. Yet they choose not to. "Lisa admits she remains conflicted over whether she would buy another steeply discounted card to help feed her dogs" Don't worry Lisa, merchants themselves are perfectly OK with you buying steeply discounted gift card. After all their margin is way higher that measly 30% off you're getting your gift cards for. They'll quietly raise prices to compensate if needed. Feed your doggies well while you can!

biot 11y ago
I question whether the merchant is fine with everyone buying steeply discounted gift cards. That $165 card was a result of someone stealing $165 worth of product and returning it. Lisa then goes and buys the card for $120 and purchases $165 worth of product. Now Petco is out $330 of revenue (or whatever percentage as cost of goods), having received nothing in return. Doubtless they factor this in as a cost of business and raise the prices accordingly but it seems doubtful that they have a mischievous plan to dominate the competition via quietly condoning shoplifting+returns and then cornering the discount gift card market.
- gesman 11y ago
  The problem here is not a gift card, the problem here is shoplifting. Naturally Petco does not want to repel gift card customers just because they cannot catch shoplifters. Once shoplifter succeeded - he can sell stuff on eBay, on Craigslist, via gift cards or just directly on the street. Gift card is just a convenience vehicle that Petco agreed upon to keep opened regardless of where merchandise came from. In fact many stores do ask my ID and address/phones numbers before accepting returns. It's hard to make millions with this type of theft (not fraud) model. After 3-rd return without receipt - pretty much every store will kick person's butt out of the store or call security/police.

by gesman 11y ago

biot 11y ago

I question whether the merchant is fine with everyone buying steeply discounted gift cards. That $165 card was a result of someone stealing $165 worth of product and returning it. Lisa then goes and buys the card for $120 and purchases $165 worth of product. Now Petco is out $330 of revenue (or whatever percentage as cost of goods), having received nothing in return. Doubtless they factor this in as a cost of business and raise the prices accordingly but it seems doubtful that they have a mischievous plan to dominate the competition via quietly condoning shoplifting+returns and then cornering the discount gift card market.

gesman 11y ago
The problem here is not a gift card, the problem here is shoplifting. Naturally Petco does not want to repel gift card customers just because they cannot catch shoplifters. Once shoplifter succeeded - he can sell stuff on eBay, on Craigslist, via gift cards or just directly on the street. Gift card is just a convenience vehicle that Petco agreed upon to keep opened regardless of where merchandise came from. In fact many stores do ask my ID and address/phones numbers before accepting returns. It's hard to make millions with this type of theft (not fraud) model. After 3-rd return without receipt - pretty much every store will kick person's butt out of the store or call security/police.