As I stand in the seemingly endless line at the grocery store check out, I look at the displays around me to occupy my mind. There’s candy, gum and an endless number of magazines delving into the supposed secrets of the stars. These things have occupied the check out shelves for years. Same old, same old.

One thing that is new, however, is the rack of gift cards. I can buy a gift card for just about anything my heart desires … a day at the spa, a movie night with the kids … not to mention the retailers. There are so many of them, that I begin to wonder who’s buying them? Surely people don’t have that many gift-giving opportunities. They must be buying them for themselves. But why?

From the retailer’s perspective, its an obvious win. The customer purchases a gift card and is locked into doing business with that retailer until the balance on the gift card has been spent. But for the customer? It would seem that this same point would argue against gift cards. But people love them!

One recent phenomenon has had a tremendous impact on the number of gift cards in circulation, especially those for the large grocery chains. Charitable organizations of all kinds have entered into agreements with retailers whereby they purchase the gift cards at a discount and then sell them to their community of people at their face value. Everybody wins! The retailer writes off the discounted portion as a charitable donation against taxes, the charitable organization receives an ‘easy’ donation, and their community members contribute to the charity at absolutely no cost to themselves. The retailer, in fact, wins doubly as this group of people is tied into doing business with them alone.

Gift Cards can be a real solution for marketplace saturation and differentiation.