Mills Offering Gift Cards

In October 2002, Simon Property Group, in partnership with Visa USA, introduced the concept of a prepaid Simon-branded gift card that could be used wherever Visa cards were accepted. A month later General Growth Properties introduced a similar program, beginning at five of its malls in the Chicago area. Now all of its malls, including those acquired from Rouse Co., offer gift card programs.

This May, also in tandem with Visa, Glimcher Realty Trust began marketing gift cards at its then 25 malls. CBL & Associates Properties jumped on the gift card bandwagon this fall, offering gift cards at its 31 shopping centers, through a partnership with American Express, and so did CBL & Associates Properties Inc. with its CBL Mall Gift Card.

In 2003, Simon sold six million gift cards, generating approximately $340 million. According to published reports, in the first five months of this year, Simon's gift card revenues were up 28% over the same period the year before. Approximately 80% of the cards are used at Simon's malls, which suggests that center-branded cards play a significant role in building customer loyalty.

Prepaid cards overall represent the fastest growing gift segment, according to Needham, MA-based TowerGroup, a financial services consulting firm. It reports that sales of gift cards, including, but not limited to those sold by shopping centers, reached $72 billion in 2003, a jump from $22 billion in 1999.

Nearly six in 10 adults, 59% of the adult US population, purchased and/or received some kind of gift card during 2003, according to Englewood, CO-based ValueLink, the gift and spending card service of First Data Corp. That is a 22% increase over the year before. According to the National Retail Federation, prepaid cards represented eight percent of the nation's $290 billion in 2003 holiday sales.

Cards in Mills' program can be purchased at its centers' customer service areas. They are available in denominations of from $10 to $500. Ken Volk, SVP of marketing, cites "increasing consumer desire for an easy and valuable holiday gift option. Each card has an initial $1.50 load fee. Following the sixth month of the card's activation, an administration fee of $2.50 is deducted from a remaining card balance each month. Cardholders can check available balances for free on the Internet at www.mymallgiftcard.com or at the customer service center at the mall where the card was purchased.

Discover Card and Discover Network are subsidiaries of Discover Financial Services, a business unit of Morgan Stanley. Discover Network is the largest independent credit card network with more than four million merchant locations. Colorado-based MidAmerica Gift Certificate Co. provides gift cards and other gift choices to more than 500 malls that participate in its programs throughout the US and Puerto Rico.