Guilbeault at their kiosk at Emerald Square.
Two Providence College grads have successfully marketed gift cards for various restaurants
A business born out of Christmas shopping procrastination
has turned into a profitable, full-time job for two Providence College graduates.
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“We’re the type of guys at the malls on Christmas Eve running around madly
trying to get presents for a godmother, for the aunts and uncles, for our neighbors,”
said Scott Guilbeault, who co-founded Certificates Etc. with his high school
and college buddy, Robert Howard, in early 2000.
In less than four years, the company, which offers gift cards redeemable at
a number of restaurants, has grown to locations in eight Massachusetts malls.
On Dec. 24, 1999, Guilbeault and Howard found themselves in what had become
a familiar pattern over the years, bouncing from store to store and wishing
they could pick up a single certificate to cover their last-minute shopping
lists. Howard was in graduate school at the time, but the two did some research
in the spring and decided there was enough interest to set up a place where
certificates could be bought to about any of around 40 restaurants near their
Norton, Mass. home base.
By the holiday season of 2000, the “gift certificate guys” had signed a lease
in North Attleboro’s Emerald Square Mall and manned a kiosk over the winter
months, using a printer and computer program to print out individualized certificates.
Guilbeault said the two men did a solid business that first year, but kept hearing
from customers that it would be even more convenient to have a flexible certificate
that would be accepted at any of the restaurants.
The following year, Certificates Etc. opened a second location in Natick Mall
and last year, the company expanded into another four locations. This year,
their eight locations include Silver City Galleria in Taunton and the Cape Cod
Mall in Hyannis, where they sell the Diner’s Choice Gift Card.
About 120 restaurants are signed up this year, one-third of them located throughout
Rhode Island. Profits for the company, which now employs about 70, multiplied
15 times in 2002 compared to the inaugural year in 2000.
Most of the company’s employees work staffing the mall locations, while others
call corporate clients – such as real estate agents and companies – who give
cards to employees, clients or sales prospects.
Guilbeault said the featured restaurants, such as Bella Vista and Mezza in
Providence or Seafare’s American Café in Newport, pay a “modest commission”
to the company when the card is redeemed at their location.
Gift-card buying is a trend on the upswing everywhere. For the first time
this year, Washington, D.C.-based National Retail Federation conducted a Gift
Card Survey and reported findings that nearly 70 percent of New England consumers
plan to buy gift cards this holiday, spending an average of almost $35 a card.
Taken across the country, estimates would put consumer gift-card spending
at $17.24 billion this holiday, accounting for nearly 8 percent of all sales.
The survey polled 6,551 consumers the week of Nov. 6, and also noted there has
been a few changes in the ways gift cards are being marketed and distributed
in recent years.
Most of today’s gift cards differ from traditional gift certificates because
they are “stored value” cards. When a consumer only spends part of a gift card’s
value, the balance is updated on the card, making it more efficient because
a store doesn’t have to reissue another certificate for the balance. And because
the cards aren’t activated until they’re scanned, gift cards can now be positioned
beside other impulse-item grabs in check-out lanes.
Effective this June, a gift certificate issued in Massachusetts must be valid
for at least seven years after it is issued. Gift certificates issued as an
electronic card must show the value of the card on a sales receipt, or the amount
remaining on the card must be available to its holder through a Web site or
toll-free number. A certificate without a clearly marked expiration date has
no time limits on its use.
According to Rhode Island law, any person who sells gift certificates is required
to record the sales and keep an accurate record of the sale for two years. For
certificates more than $50, the purchaser must be given a written and numbered
receipt.
Also, it is illegal for any restaurant to place an expiration date on the
gift certificate. Violations of the policies in both states are punishable by
fines of up to $300.
After the frustrations of using paper printers (and in order to combat counterfeits),
Certificates Etc. now issues its Diner’s Choice certificates as plastic cards.
Guilbeault said the company hopes to add another half dozen holiday locations
next year, and is looking to expand into both the North Shore of Massachusetts
and Rhode Island areas.
Talks for this season with Rhode Island Mall broke down because the company
felt the rental price was too high (Guilbeault said the average kiosk rental
for the November and December months runs to about $15,000 at most locations).
Guilbeault said Providence Place mall was leery of how Certificates Etc. would
affect the mall’s own “universal” in-house certificate operation. Guilbeault
said its understandable that Providence Place might be a little wary of competition,
noting that the South Shore Plaza in Braintree, Mass. (which is similar in size
and demographics to Providence Place) generated $3 million last year in mall
gift certificates.
Early Certificates Etc. numbers show sales up almost 40 percent compared to
this point last year, but Guilbeault cautions those are very preliminary numbers
and could just be indicative of some shoppers heading out a bit earlier. Fittingly,
for a company started by last-minute shoppers, he said that close to 80 percent
of the company’s business comes in the two weeks before Christmas.
“We stumbled across a great idea and have been able to develop it over the
years. There were a lot more little wrinkles than you’d expect in the early
years,” said Guilbeault, especially in explaining the concept to restaurants
and consumers.
“Now it’s fun and now it’s exciting. Bob and I have been friends since high
school and in a lot of ways, this is a dream come true.”
