Tuesday, 17 March 2009

Cash won't buy gift cards at Birmingham's Riverchase Galleria, Century Plaza

Categories: Holidays
Purchasing a gift card in lieu of a gift continues to be a popular and convenient alternative to shoppers short on ideas, but the country's second largest mall operator this year is eliminating some of the convenience, at least for consumers.

General Growth Properties, which counts the Riverchase Galleria in Hoover and Century Plaza in Birmingham among its 225 mall properties nationwide, will stop accepting cash for gift cards beginning Dec. 1.

The Chicago-based company, which early last week acknowledged it is considering bankruptcy to escape a showdown with creditors, gave no explanation beyond a prepared statement: "The GGP Mall Gift Card was created to provide our shoppers a convenience. That's what the gift card is based on. To further our commitment of convenience we've chosen to go the route of only accepting credit cards for the purchase of GGP Gift Cards."

The Summit shopping center in Birmingham, owned by Bayer Properties, still accepts cash, which accounts for about a quarter of its gift card purchases, a mall employee said.

General Growth spokesman David Keating said malls aren't bound to accept cash just because dollars are "legal tender for all debts, public and private."

"A purchase is not a debt," Keating said. "A lot of places we're aware of are doing that (rejecting cash). It's a time-saver for General Growth."

Mickey Gee, a marketing professor in the University of Alabama at Birmingham School of Business, offered two possible explanations. Accepting credit card payments cuts down on theft and employee fraud, such as loading a gift card with more value than the cash purchased, he said.

Also, he said, new accounting rules this year mean income from gift card sales have to be carried on the company books as liabilities until the cards are actually redeemed. In some states, unspent gift card amounts are treated as unclaimed property, which reverts to the state.

Tracking such property is potentially easier if it is matched to a credit card transaction, he said.

Still, "It's odd," said Gee, a career retailer whose family business, the Pants Store, is now owned by his sons. "Cash is king. I've never turned down cash."

Jennifer Morton, marketing manager at the Galleria, said signs went up at the mall a few weeks ago, and she's received no complaints. Only a small number of customers use cash, she said. Many individual stores inside the mall still accept cash for store gift cards.

Related material -- National Public Radio's report this morning -- Gift Card Warning: Check retailer's health



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