Gift cards

INNspiring.com | Innkeeper Forum & Innkeeping Resources

Help Support INNspiring.com | Innkeeper Forum & Innkeeping Resources:

winewitch

Well-known member
Joined
Jun 25, 2008
Messages
49
Reaction score
0
Oh joy!
Economic downturn and bedandbreakfast.com so kindly decides to raise their commissions 5%. Opinions?
We've decided not to participate in their program anymore, we think their commissions on these cards are too high to begin with.
The sales pitch of "you'll make it all back when you sell their cards" is not working, haven't sold any this year.
The idea is good, the reality is different.
 

Morticia

Administrator
Staff member
Administrator
Moderator
Joined
May 22, 2008
Messages
17,208
Reaction score
55
So it's what? 20% now?
 

inncogneeto

Well-known member
Joined
Aug 31, 2008
Messages
189
Reaction score
0
So it's what? 20% now?.
I got an e-mail this morning, as of Oct 1st it's 20% based on a sliding scale, based on how many you redeem, it goes down the more you redeem.
 

JunieBJones (JBJ)

Well-known member
Joined
May 22, 2008
Messages
3,893
Reaction score
0
I am trying to find the percentage. Here is this info meanwhile:
NEW FOR 2008: Consumers can upload their own digital photos to create a customized card and presentation page – say a couple’s wedding photo for an anniversary gift, or a shot of grown children who are giving their parents a getaway present.
Gift cards are also sold in more than 20,000 retail locations, including Wal-Mart, Costco, CVS/pharmacy, Rite Aid and more, giving unparalleled exposure to every participating B&B. People who have never tried a B&B will now have the opportunity to give or enjoy the gift of a B&B getaway.
If you wish to discontinue your participation in the BedandBreakfast.com Gift Certificate/Card Program, email Support@BedandBreakfast.com or call 1-512-322-2710.
If you have questions about the program's benefits/processing/redemption, please click here, contact Support@BedandBreakfast.com or call 1-512-322-2710.
 

JunieBJones (JBJ)

Well-known member
Joined
May 22, 2008
Messages
3,893
Reaction score
0
What happens when they sell all these gift cards and the members all pull out of allowing redemption? I suppose they will force us to accept them or not be members of the directory?Please provide us with the info saying it is increasing, as we have not had the email yet.
The website says 15% still:
# You can't afford not to participate: Joining the program is free, and we handle all fulfillment, promotion, marketing and credit card costs; you pay a 15% commission on the face value of the redeemed card/certificate only when you get a reservation. If you redeem a $50 card on a $250 stay, your effective commission is only 3%; on a $150 reservation, it's only 5%.
"Guests who redeem certificates usually spend more then their face value, so the actual commission winds up under 15%. Some returning guests first found us because of BedandBreakfast.com Gift Certificates." (Marjorie Ott, Olallieberry Inn, Cambria, CA)
 

inncogneeto

Well-known member
Joined
Aug 31, 2008
Messages
189
Reaction score
0
Here's what we received:
We are writing with important information about changes to the BedandBreakfast.com Gift Card Program, effective October 1, 2008.
Here's the information in a nutshell -- for complete details, please see below.
  1. BedandBreakfast.com Gift Cards will no longer be sold in Costco warehouses.
  2. If you sell BedandBreakfast.com Gift Cards at your inn, the commission you earn will increase from 15% to 20%.
  3. If you welcome BedandBreakfast.com Gift Cards at your inn, the commission retained by BedandBreakfast.com will increase from 15% to a scale of 15%-20%, depending on the volume of redemptions.
  4. Gift cards will continue to be sold on a test basis at Costco.com with restrictions on their use.
1. BedandBreakfast.com Gift Cards will no longer be sold in Costco warehouses. Allowing Costco to sell gift cards at a discount accomplished two important goals: it gave the B&B industry national exposure to affluent consumers, and it enabled us to get cards into 20,000 other retail outlets on a non-discounted basis. Unfortunately, many consumers started using them as a travel discount card, not as a gift card. This did not achieve the goal of getting new heads in beds and increased the average sale size, thereby increasing the effective commission innkeepers paid. Since Costco customers will no longer be gaming the system and redeeming five or more $100 cards to pay for an entire reservation, you won't be hit with high dollars on redemption as in the past. The effective commission rate should truly average in the upper single digits (8%-9%).
2. If you sell BedandBreakfast.com Gift Cards at your inn, the commission you earn will increase from 15% to 20%. For every dollar in gift cards you sell, you keep 20 cents, with absolutely no risk or upfront costs of any kind. Your guests will be looking to buy holiday gifts for their loved ones - why not encourage them to skip a trip to the mall and purchase the gift of a getaway from you? Your income from selling the cards will easily offset the cost of the commission owed to us on redeemed cards. If you're not yet participating in our resellers program, log in to your Home Base and sign up today!
3. If you welcome BedandBreakfast.com Gift Cards at your inn, the commission retained by BedandBreakfast.com will increase from 15% to a 15%-20% scale. During the past two years, we have significantly increased the quality and distribution of our gift cards, with the result that exposure for the B&B industry is significantly enhanced along with reservations for our member innkeepers, but our expenses have escalated significantly as well:
  • Paper certificates have been replaced by plastic cards, with a choice of over two dozen styles.
  • Free photo uploads allow consumers to customize gift cards with photos of their loved ones.
  • Internet mail orders are sent with a free 64-page inn directory.
  • Shipping is free on all orders, with free FedEx on orders of $100 and up.
  • An outside firm is paid to ensure full legal compliance with the labyrinth of state escheatment laws.
  • Cards (and card hangers) are printed and shipped to 20,000 retail locations.
  • A full-time sales person works to sell gift cards to corporate, premium and incentive distribution channels (Coca-Cola, IBM, Dell, etc.)
  • Advertising and PR programs include press releases and national advertising, including our second full-page ad in SkyMall magazine, with five million copies read by 155 million affluent passengers, in planes through December 2008.
  • We've had countless customers tell us how much they love this gift, and how they made their choice of where to stay based on which properties are in the program. (Click here to read customer reviews.)
New commission schedule: Starting October 1, 2008, the commission on the first $1,500 in redemptions in a calendar year will be 20%; on the next $3,500 it will be 17.5%; and on everything over $5,000 it will be 15%. The full 20% commission will be charged on all transactions, and a rebate check will be sent to innkeepers after the end of every calendar year for any amount due. The new commission structure will cost an average of $42 annually per property. Since the average gift card sale is $150 dollars and the average B&B stay is close to $350, the effective commission rate for the program is still under 10%. For the initial change in pricing, the term will run from October 1 through December 31, 2009 (15 months), so more properties will qualify for the lower rates.
4. Gift cards will continue to be sold on a test basis at Costco.com with the following restriction on their use:
  • Special Costco.com/BedandBreakfast.com Gift Cards will be created, and only two cards will be allowed to be redeemed per stay (total value of $200), thereby capping your cost and ensuring that travelers do not show up and try to pay for an entire $600 stay with discounted cards.
  • Costco.com cards will be clearly labeled to differentiate them from regular BedandBreakfast.com Gift Cards.
  • Gift cards cannot be used to pay for group functions. (This applies to all BedandBreakfast.com Gift Cards.)
Selling gift cards on Costco.com is quite different from selling in Costco warehouses. When you factor in the shipping price, the impact of the discount is minimal. Consumers are unlikely to purchase gift cards just for the discount, and the use restrictions provide additional protection. This should position these cards as a great "gift", not as a "discounted travel card".
In conclusion, we feel the results speak for themselves. This program generates tremendous exposure and new business for the entire B&B industry. A program with over 4,000 participating properties makes us competitive with giant chains like Marriott, Hyatt and Hilton. In addition, in terms of the consumer experience, having a high quality state-of-the-art gift card program that compares favorably with the gift cards of major bank and retail chains gives potential guests the confidence that their first B&B experience will be equally first-rate.
A high-end, professional gift card program with online and retail distribution, custom cards, free directories, free shipping, national full-page ads to drive sales, plus the staff to make it happen costs plenty, but we are confident that it's an excellent way for you to get new guests at no risk. Last but not least, please remember that in this currently shaky economy, paying a 20% commission on a portion of the revenue generated by a guest's stay is better than not having a reservation at all. In other words, similar to what we've long said about online reservations, it's better to have 80% of something than 100% of nothing.
We very much hope you'll continue to participate in welcoming and selling BedandBreakfast.com Gift Cards.
The directory of participating inns is going to press on October 10. If you feel that this optional program no longer works for you, please call our support team at 1-800-GO-B-AND-B as soon as possible, so we can omit your property from the next printed directory and so you won't get calls from folks wanting to use their gift card at your property.
We look forward to continuing to promote the B&B industry through the gift card program, and we thank you for your business.
 

inncogneeto

Well-known member
Joined
Aug 31, 2008
Messages
189
Reaction score
0
"Last but not least, please remember that in this currently shaky economy, paying a 20% commission on a portion of the revenue generated by a guest's stay is better than not having a reservation at all. In other words, similar to what we've long said about online reservations, it's better to have 80% of something than 100% of nothing."
Dh says they should be using this same logic themselves- 15% of something is better than 20% of nothing, when the innkeepers bail out of the program!
 

muirford

Administrator
Staff member
Administrator
Moderator
Joined
May 22, 2008
Messages
2,488
Reaction score
5
I'm so furious about this - who gives five days notice for a rate increase? Can you imagine if you told all your guests that walked in your door - sorry, we raised our rates 5% on October 1 so you will now have to pay 5% more for your room. We are heavily booked already for October, and we hardly know anymore when someone is going to have a bandb.com gift card. I called today and cancelled our participation, but I know I will have guests who walk in with cards and I will be forced to take them. This is the last straw for me; I won't be renewing my listing when it's due, either. This is not about getting heads in beds for innkeepers; this is about increasing the bottom line for bedandbreakfast.com, period.
 

JunieBJones (JBJ)

Well-known member
Joined
May 22, 2008
Messages
3,893
Reaction score
0
Since the average gift card sale is $150 dollars and the average B&B stay is close to $350, the effective commission rate for the program is still under 10%.
this is speculative. This does not apply to me. It might apply to a B&B in wine country ca where the rates are high, we have one nighter here on birthdays, not 3 night stays. I totally disagree with this statement. It might apply to some inns, it does not apply to mine.
 

JunieBJones (JBJ)

Well-known member
Joined
May 22, 2008
Messages
3,893
Reaction score
0
I'm so furious about this - who gives five days notice for a rate increase? Can you imagine if you told all your guests that walked in your door - sorry, we raised our rates 5% on October 1 so you will now have to pay 5% more for your room. We are heavily booked already for October, and we hardly know anymore when someone is going to have a bandb.com gift card. I called today and cancelled our participation, but I know I will have guests who walk in with cards and I will be forced to take them. This is the last straw for me; I won't be renewing my listing when it's due, either. This is not about getting heads in beds for innkeepers; this is about increasing the bottom line for bedandbreakfast.com, period..
muirford said:
I'm so furious about this - who gives five days notice for a rate increase? Can you imagine if you told all your guests that walked in your door - sorry, we raised our rates 5% on October 1 so you will now have to pay 5% more for your room. We are heavily booked already for October, and we hardly know anymore when someone is going to have a bandb.com gift card. I called today and cancelled our participation, but I know I will have guests who walk in with cards and I will be forced to take them. This is the last straw for me; I won't be renewing my listing when it's due, either. This is not about getting heads in beds for innkeepers; this is about increasing the bottom line for bedandbreakfast.com, period.
QUESTION FOR ALL INNKEEPERS - Do any of you have any BandB.com gc's on the books for after Oct 1st (btw I have YET to receive this email so who knows how many days noticed we will have!!)
I emailed and cancelled my participation. I will call them if they do not respond readily. PS I could give a crap that the guests get them mailed for free and can upload photos and the rest of it. That has NOTHING TO DO WITH US. WE are their bread and butter, they better start realizing that.
 

Morticia

Administrator
Staff member
Administrator
Moderator
Joined
May 22, 2008
Messages
17,208
Reaction score
55
"Last but not least, please remember that in this currently shaky economy, paying a 20% commission on a portion of the revenue generated by a guest's stay is better than not having a reservation at all. In other words, similar to what we've long said about online reservations, it's better to have 80% of something than 100% of nothing."
Dh says they should be using this same logic themselves- 15% of something is better than 20% of nothing, when the innkeepers bail out of the program!.
inncogneeto said:
"Last but not least, please remember that in this currently shaky economy, paying a 20% commission on a portion of the revenue generated by a guest's stay is better than not having a reservation at all. In other words, similar to what we've long said about online reservations, it's better to have 80% of something than 100% of nothing."
Dh says they should be using this same logic themselves- 15% of something is better than 20% of nothing, when the innkeepers bail out of the program!
Personally I think they'd get more buy in if they quit using that demeaning phrase 'X% of something is better than 100% of nothing.'
All of the calls we've had this year for guests wanting to use the GC's have been in-season callers. The heads are already in the beds at full price. And, yes, I know, if I don't like the program, don't join.'
 

IronGate

Well-known member
Joined
Aug 9, 2008
Messages
476
Reaction score
0
Aspiring here, and not really up on the ins-and-outs of the GC programs. If you participate, can you set limits on their use within your inn? For example, they are not valid on weekends or during your high season.
 

Morticia

Administrator
Staff member
Administrator
Moderator
Joined
May 22, 2008
Messages
17,208
Reaction score
55
Aspiring here, and not really up on the ins-and-outs of the GC programs. If you participate, can you set limits on their use within your inn? For example, they are not valid on weekends or during your high season..
IronGate said:
Aspiring here, and not really up on the ins-and-outs of the GC programs. If you participate, can you set limits on their use within your inn? For example, they are not valid on weekends or during your high season.
On this program there are only the limits that bandb.com is now setting. Otherwise you have to take them like cash, no blackout dates.
 

JunieBJones (JBJ)

Well-known member
Joined
May 22, 2008
Messages
3,893
Reaction score
0
Aspiring here, and not really up on the ins-and-outs of the GC programs. If you participate, can you set limits on their use within your inn? For example, they are not valid on weekends or during your high season..
IronGate said:
Aspiring here, and not really up on the ins-and-outs of the GC programs. If you participate, can you set limits on their use within your inn? For example, they are not valid on weekends or during your high season.
This is the requirement, available to any room no blackouts, if you offer a discount you must ALSO offer it to these guests. So that is 15% military discount, plus 20%. !!!!!!
 

gillumhouse

Moderator
Staff member
Moderator
Supporting Member
Joined
May 22, 2008
Messages
15,483
Reaction score
28
Glad I never signed up for it.
Have any of you received the call followed by an e-mail about designing and hosting your web site for you? DH was told mine looked tired and out-dated. First they were a Directory, then a reservations service, then a gift card flogger, nw they want to create and host our web sites also. When they start offering to clean my bathrooms, I might be interested.......
 

JunieBJones (JBJ)

Well-known member
Joined
May 22, 2008
Messages
3,893
Reaction score
0
"this is all she wrote"
Dear JBJ,
Per your request, the Historic House Bed and Breakfast has been removed from the BedandBreakfast.com gift card program.
Regards,
Veronica R. Gonzales, Membership Consultant
BedandBreakfast.com & Inns.com
700 Brazos Street, Suite B-700, Austin, TX 78701
Office: 512.322.2722
Toll free:1.800.GO.B.AND.B (1.800.462.2632), extension 2722
Fax: 512.320.0883
veronica@bedandbreakfast.com
 

muirford

Administrator
Staff member
Administrator
Moderator
Joined
May 22, 2008
Messages
2,488
Reaction score
5
"Last but not least, please remember that in this currently shaky economy, paying a 20% commission on a portion of the revenue generated by a guest's stay is better than not having a reservation at all. In other words, similar to what we've long said about online reservations, it's better to have 80% of something than 100% of nothing."
Dh says they should be using this same logic themselves- 15% of something is better than 20% of nothing, when the innkeepers bail out of the program!.
inncogneeto said:
"Last but not least, please remember that in this currently shaky economy, paying a 20% commission on a portion of the revenue generated by a guest's stay is better than not having a reservation at all. In other words, similar to what we've long said about online reservations, it's better to have 80% of something than 100% of nothing."
Dh says they should be using this same logic themselves- 15% of something is better than 20% of nothing, when the innkeepers bail out of the program!
Personally I think they'd get more buy in if they quit using that demeaning phrase 'X% of something is better than 100% of nothing.'
All of the calls we've had this year for guests wanting to use the GC's have been in-season callers. The heads are already in the beds at full price. And, yes, I know, if I don't like the program, don't join.'
.
Same here - taking them when I'll be full anyway is crazy. We figured out that we've paid bandb.com close to $1000 this year for the privilege of being listed with them. This when another B&B comes up first on our town's page. Next year it'll be the only one because I won't be renewing my listing with them. This is really the final straw.
I just put together an email to send to all my incoming guests for the next six months saying we won't be redeeming them any longer. I have added it to my web page, my reservations policies and my confirmation email. I know I'll have to deal with some unhappy guests but I'm going to get it out of the way now. This is just too much.
 

happyjacks

Well-known member
Joined
May 30, 2008
Messages
493
Reaction score
0
What gets me is bedandbreakfast.com whine explain that their costs to execute the program are so high and that's why they have to pass so much off to the B&B's. Well hello? They are the ones who designed and implemented the program (with apparently little to no consideration for the B&B's they are supposedly partnering with) so they had and still have control over the nature of the expenses.
John and Eric have been on the forums and heard the concerns of innkeepers that the commission is too high and that the stats they quote about effective commission do NOT apply to many many many innkeepers. BanB.com could have chosen to address those concerns and try to bring their expenses down in order to make the program more equitable. In fact that would have been an intelligent business move. But instead they plug their ears, tell us how great they are for the industry and jack up their commission. Nice.
And to give an example of an expense that could be reduced: the print books. It costs a lot of money to print 64-page colour books, and it costs to ship them. Why, I would like to know, does an online directory feel it is necessary to distribute printed books? John's told that the membership fee for the directory is so high because of all he does to drive traffic there. Well why not direct the GC users to the online directory instead of giving them a paper option?
And in terms of the high cost of packaging and shipping the GCs: why not manage those expenses better? Perhaps give the purchaser the option of Free Standard packaging and shipping (nice envelope, postcard directing recipient to website, standard ground mail) and offer an upgraded package whereby the purchaser can pay a little extra to have more bells and whistles around the card and maybe overnight delivery. Just some ideas off the top of my head how bedandbreakfast.com could look at cutting down their expenses instead of sticking it to the small B&B owner.
All of course is my high-falutin' and not very humble opinion.
 
Top