Archived Saving your AAR in face of the dreaded gift card

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So our hardlines TL told another TL about this today, and it was mentioned at huddle tonight that we can do this. I have not tried it out personally, but our hardlines TL is pretty knowledgable.

Ok, so we all know that iPads are on gift card this week, which sucks for AAR. It turns out, if a guest wants to use the gift card for the attachment, there is a way to save your AAR. According to the TL:

1) Ring up the iPad.
2) scan the gift card.
3) void the gift card off the transaction (it still keeps the iPad).
4) knock the price of the gift card off the iPad using the ad substitute.
5) ring up the attachment.

Enjoy!
 

mrknownothing

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So basically, instead of actually giving the guest a gift card and using it right away, you're just subtracting that amount from the total (iPad + attachments)?
 
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Correct. It achieves the exact same outcome for our purposes. Yes, Spot wants to give out the gift card to get the guest to come back into the store, but if they are going to turn around and use it on the same trip, then might as well save your AAR on it.
 
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This would work with some guests, but others are observant enough to go "oh you took that off my price, I guess I don't need this other item after all I was only buying it because of the gift card."
 
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Umm, I do have a moral compass, thanks for suggesting otherwise. Also, there's nothing shady about it. The guest still gets the gift card value, you're just doing it in one transaction now. Also, since on single item gift cards there has been an option to not add the gift card for the last couple of months, this isn't anything that isn't on the up and up, anyway.
 

commiecorvus

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That sounds pretty shady. I get that you're under a lot of pressure but that's exactly when a moral compass is handy.

I don't see how this is shady at all.
The guest gets the money off and you get your AAR.
There have been workarounds for stuff like this since the beginning of retail that are meant strictly to help not as a scam.
 
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Umm, I do have a moral compass, thanks for suggesting otherwise. Also, there's nothing shady about it. The guest still gets the gift card value, you're just doing it in one transaction now. Also, since on single item gift cards there has been an option to not add the gift card for the last couple of months, this isn't anything that isn't on the up and up, anyway.

It wasn't an ad hominem. Knowing right from wrong helps when TLs don't.

I still wouldn't do it unless I explained what was happening to the guest and they were okay with it. Leads to inaccurate register reporting and opens you to liability as well.

Where is the option to not add the gift card?
 
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What I do is scan the ipad last and hand them the gift card with their receipt. If I scan the ipad first, I'll hold on to the gift card until the transaction is done. If I give them the gift card right after I scan the ipad, more often than not they'll ask to use it on that transaction or ask to void the attachments and make a second transaction. It would be nice if they would offer a $30/50 gift card with the purchase of any specially marked accessories. #frustrating #lifestruggles #AARprobs2014
 
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Our electronics team has done this for a while now, especially if their AAR is down. It is not shady at all and the register reports will still be accurate.
 
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I realize I'll be accused of drinking too much of the company Kool-Aid but I think people are missing the point on why we care about attachments. Our net cost on an iPad Air 16 gb is about $475. We sell for it for $499. We try to sell additional items in the same transaction to make it profitable. General attachments we're going to have a better margin (30-50%)

The reason we don't sell it as a lost leader at $449 and instead offer a gift card is because our our supply contract with Apple. They set the pricing.

By doing these you are creating some really bad expectations with guests. If a guest comes in and expects it on other items we offer gift cards with, it might or might not be honored. We are literally losing money with this work around. Sales count for way more on reviews that AAR.

If you are having that much trouble getting attachments with your guests, you don't have the right people in place or have trained your guests to cheat along with you. It's a slippery slope and these types of work arounds will only hurt the company and your store more.

If your team lead is allowing this, I think that deserves a call to the hotline. If their ethics allow this, I hate to think what else they are letting slip by.
 

EagleEye

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I see your point but I think I want to elaborate more on it. Let's look at an iPad sale based on COST vs RETAIL pricing using the method mentioned by OP.

TARGET'S COST

$475 - iPad Air 16GB
$24.50 (approx.) - For a $40 case

Let's round to make this easy. It costs Target roughly $500 to bring in the iPad and the case. Now on to the sales methods.

OP'S METHOD

$499.99 - iPad Air 16GB
($50) - Ad Sub Discount
$39.99 - iPad Case
SUBTOTAL less tax: $489.98
TARGET'S LOSS: About $10

Guest DOES NOT get a gift card.


GUEST'S METHOD

Sale 1:
499.99 - iPad Air 16GB
SUBTOTAL less tax: $499.99
TARGET'S GAIN: About $25

Sale 2:
39.99 iPad Case
SUBTOTAL less tax: $39.99
Guest pays with $50 Gift card.
TARGET's LOSS: $24.50 Since the payment method was a FREE GIFT CARD. Target only sees this loss with the redemption of the gift card itself.
*Guest still have $7-10 left on their gift card depending on state taxes which they can use on other items that we MARK UP and sell, resulting in Target not losing as much money as you think when a guest uses a gift card.

OVERALL: Target actually sees a drop in net sales is we use OPs method. The reason being, the gift card is not worth $50. Since Target receives items at a usually high discounted rate, we aren't losing as much as you see on the register. Taking the $50 off the iPad at the sale rather than the guest using their gift card on other items in a separate sale actually results in Target losing money. This does change based on the profit margin of the accessories, but since the margin is so low on the iPad, Target loses money. In terms of AAR, we are also falsifying the number to corporate since AAR is there to track how well the TMs are pushing the items that we make huge amounts of profit on when in actuality, OPs method hurts the sales.

EDIT: Also, issuing the gift card gives the guest incentive to come back to the store if they still have something left on it, passively driving sales in itself.
 
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Couple things off but whatevs.
 
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That sounds pretty shady. I get that you're under a lot of pressure but that's exactly when a moral compass is handy.


Talk about Moral Compass, my ETL-AP told me that I should tell the guest that they can't use the giftcard until the next day... I told her I would not do that as that was immoral and straight lying to the guest. I am however going to run this past my ETL-GE and STL and TL of Electronics and see what they say. Our AAR was 32.32% last week (only me and one other were green at 87.5 and 75.5%), and I don't think this week is going to help.
 
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I wouldn't do what the OP suggested, but thinking outside the box and making those numbers is what the dreaded "Be Bold" is about. They're giving away millions probably to matching prices or to guest challenges and some of you are referring to what's right or wrong. I ok my team to take 3 or 4 or 5 bucks off an accessory IF there's an insane markup (and it's cheaper everywhere) and the guest needs it and/or they're counting pennies on the counter. My concern the guest. Other than that, screw it. And I can sell water to a whale bit if they don't need it I won't try to make them buy it. Numbers be darned.
 
B

Barcode

Guest
This IS a good method to workaround the problem.

However it is definitely against best practice, and would be considered a gray area.

I do NOT recommend doing this unless a leader told you it was specifically okay.
 
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Correct. It achieves the exact same outcome for our purposes. Yes, Spot wants to give out the gift card to get the guest to come back into the store, but if they are going to turn around and use it on the same trip, then might as well save your AAR on it.
How does that affect your price challenge?
 

mrknownothing

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Correct. It achieves the exact same outcome for our purposes. Yes, Spot wants to give out the gift card to get the guest to come back into the store, but if they are going to turn around and use it on the same trip, then might as well save your AAR on it.
How does that affect your price challenge?

If her leaders are allowed to share this into with the team, then I would imagine whoever does the PCV wouldn't think twice about it.
 
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I was somewhat successful in getting guests to get service plans with the iPads when there was the $100 gift card. Unlike accessories, you can add service plans to a receipt. So if a guest was getting accessories and also wanted the service plan I would ring out the iPad with the accessories first and then add the service plan on another transaction with the gift card. I sold it as getting accidental damage protection for (x number of dollars) using the giftcard. I got a few guests to do that since the 16GB iPad Air's service plan was like $20 after using the gift card.
I really wish we would get accidental coverage plans for iPods though. The normal plan is a very tough sell because the concern is for accidental damage. AppleCare is a much better deal for them. I know Target Mobile does AppleCare but I'm not sure if it counts as SRP.
 
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I agree that the voiding gift card is wrong. Price is set & controlled by Apple. It's also not best practice & can bite you in the ass. I am always green most of time over 100% even during GC sales. You just have to be proactive , friendly, & know what your doing.
* I do not tell people they need things they don't & my guest service are the best.
 
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