We all seem to be absolutely consumed by the power of online shopping, sometimes it seems to limited benefit, but as we enter the Christmas trading period, I suspect online buying will intensify.
Some of you may have observed the GrabOne opportunity offered by Dominos Pizzas over the past week.
The offer was the purchase of a coupon to entitle you to a $2 pizza. There was a maximum of 3 per purchase and you had to visit a Dominos outlet to collect your purchase, which had an expiry date of 6th December. Some 75,000 pizzas were purchased at close off. As that closed, the company posted a follow up offer of $4 pizzas. As of Sunday 12th of November they had sold 80,254 pizzas with the rest of the day to continue buying.
By my count, that's a total of 155,000 pizzas with a face redeemable value of close to $500,000. Now that's where this subject gets interesting. With the coupons having to be redeemed by the 6th December, there's a high chance that a large number will never be redeemed in time for the cut-off date. On the basis that only about 30 percent of such coupons are ever actually redeemed, it suggests Dominos are going to make a lot of money from un-redeemed coupons.
We really, as consumers are like sheep. This GrabOne opportunity with such a low cost entry of $2 or $4 is what I would describe as throwaway money as the value is that low. However, there is little risk for the company as proven redemption is very low. It really is a win win for Dominos.
So is it fair and reasonable? Why not? All the customer has to do is redeem the coupon by a given date. If they don't redeem it then it is their problem, not the seller as the terms of purchase have been made very clear.
I wonder however, how much money will be squandered by consumers over coming weeks as we enter Christmas. The last few years have seen purchased vouchers go down the drain from Dick Smith and more recently Nosh.
Despite the enthusiasm for online shopping, a level of maturity is required when making purchases that never have any likelihood of being redeemed. Where gift vouchers are concerned, buyers need to carefully consider the expiry date and the potential longevity of the retailer. Giving money away has no logic. Meanwhile, those who purchased a pizza, make sure you enjoy it!
Paul Keane is a registered property professional and has vast experience in New Zealand’s commercial property industries. He provides retail and property consultancy including development management to many New Zealand property owners, developers and city councils. This post originally appeared on RCG's blog.