Toys ‘R’ Us Holiday Savers Club

[Slug]

Toys ‘R’ Us introduced a new holiday savings program today to lock customers into buying from them. Here's the NYT article, and here's my blog post. I think it's potentially game-able if you're definitely going to spend money there this holiday season, and you know what you're going to buy, but I'm curious what you other thinkers think.

[disneysteve]

Interesting concept. Our daughter is 14 so we haven't been in a Toys R Us for a long time but when she was young, we shopped there. I guess if you know you will be shopping there, it makes sense, especially if combining it with a rewards credit card as you suggest. I wonder if you will then be able to use the credit to purchase store gift cards.

[Slug]

I would think you could buy store gift cards, which you could then use as gifts I guess, but it could also put you in more danger of inactivity fees too I suppose.

[kork13]

It's not a bad tactic on the part of Toys-R-Us. Gives them working capital, and offers a good return to consumers. The critical assumption is as you mention, that you plan to do a fair amount of your holiday shopping there.

Even better for TRU, it could (likely will) attract consumers away from competitors, because if they have the balance there, consumers will want to make sure it's used, so people might buy things there instead of other (even less expensive) stores. I see moderate mark-ups (5-10%) as a part of this strategy -- at least, if I were the exec's, that's what I'd be doing. The money is already yours, so give the least product you can for it. As long as the markups are relatively small, it still wouldn't dissuade most buyers.

[disneysteve]

Even better for TRU, it could (likely will) attract consumers away from competitors, because if they have the balance there, consumers will want to make sure it's used, so people might buy things there instead of other (even less expensive) stores.

This is the one part that concerns me. It encourages people to shop at TRU which charges more than Wal-Mart for the same stuff. Sure, you will get the 3% bonus but if you are paying 10% more, what have you accomplished?

[Slug]

I totally agree. Why would I drive to TRU twice to do this when I can sit here and go to Amazon, get a cheaper price, and free shipping? Probably the only way I would truly participate in this is if my company wanted to give out gift cards to TRU to a large number of employees as some sort of reward. Then I could get the card, charge $15k to my credit card, and then use it to buy the company gift cards for which I'd be reimbursed. I'd get the 2% from my CC, the 3% from TRU, and probably 30 days of interest on the $15k in my money market account after I got reimbursed. Only how do I convince my firm that TRU gift cards are the way to go???? Oh well, nice thought. I'll just stick to the US Mint Direct Ship Coin program instead.

[disneysteve]

Why would I drive to TRU twice to do this when I can sit here and go to Amazon, get a cheaper price, and free shipping?

A lot of people prefer to shop in person. They like seeing the items. They like the shopping experience. They don't like giving their credit card info online (or they don't use credit cards). They like getting the item immediately, not having to wait days for delivery.

Personally, I'm with you. I'll take the cheaper price and shipping to my door any day. I place an order with Amazon at least a couple of times a month. Of course, I also do a bunch of medical surveys that pay me in Amazon credit so I've always got hundreds of dollars on account with them.

[Slug]

Finally found the link on the website. Max reward is $75 with no fees or expiration.