October 16, 2015
Stores let customers give the gift (cards) of stock
With some reports comparing them to giving saving bonds to kids, some stores are introducing prepaid gift cards that can be exchanged for common stock in public companies.
The "Gift Card for Stock" is a collaboration between Stockpile Inc., a startup, and Blackhawk Network, the provider of gift cards at retail stores.
Stockpile’s gift card, sold in a separate rack close to the regular gift cards, comes in fixed denominations of $25, $50 and $100. They may be redeemed for a variety of popular stocks, including Coca-Cola, Facebook and Apple, as well as financial products that follow the S&P 500 index and precious metals, such as gold and silver. If desired, shares received can be swapped for other stock.
Buyers can also choose a more general card that gives the recipient a choice of stock.
When recipients redeem a Stockpile gift card and open a brokerage account, they get fractional shares of real stock that they choose. Any buy or sell transaction on Stockpile.com costs 99 cents.
Source: Stockpile
Participants in the initial rollout include Kmart, Ohio’s Buehler’s Fresh Foods, Giant Eagle and Market District (locations in Maryland, Ohio, Pennsylvania, West Virginia, and Indiana), Safeway (18 locations in Seattle) and Wegmans.
According to a September poll of over 2,000 Americans commissioned by Blackhawk, only 28 percent of American adults own stock. Seventy-three percent of Millennial respondents did not own stock but the poll found 54 percent would be interested in purchasing stock if it were as easy as buying a gift card in a store that could be redeemed online.
"As we approach the holiday season, we think Gift Cards for Stock will appeal to consumers who want to give something more meaningful," said David Tate, Blackhawk Network’s SVP, products and marketing. "This is a great gift to teach someone about investing or dip your toe in the market for the first time."
Avi Lele, a former patent attorney, founded Stockpile after wanting to give a Christmas gift of stock to his nieces and nephews but finding the process complicated and expensive. He hopes it lifts education about and overall access to financial markets.
"Your grocery list," Mr. Lele told the Journal, "will be bread, milk, eggs, Apple stock and gold."
BrainTrust
Jamie Tenser
Retail Tech Marketing Strategist | B2B Expert Storytelling™ Guru | President, VSN Media LLC
Recent Discussions
Discussion Questions
What do you think of stores selling gift cards that can be redeemed for stock? How much appeal will “Gift Card for Stock” have with consumers?
Poll
It’s a nice idea … but more academic, or a “learning moment,” than a real driver of thoughtful gift-giving. Sure aunts, uncles and grandparents may buy a few of these. But the kids might roll their eyes.
I don’t think many consumers will want to buy or receive stock gift cards. Do consumers really want to educate loved ones about the ins and outs, risks and rewards of stock for the holidays?
Being that most Americans have no idea of how the stock market really works — and Gen Z and late Millennials would rather have a new video game then a strong investment, this idea will slowly fade off the shelves.
Getting stock in sports teams funds or a special index fund centered on gaming or sports makes more sense. I did get my wife actual stock in the Green Bay Packers, since it is a team owned by the fans. They have a great gift program with the actual shares certificate, etc.
Get the kids a certificate of ownership to a stock index fund — safer investment and a no-maintenance type place to put the money. Other option — get them nothing! They have too much stuff already!
Worst way ever to invest. Use a gift card to buy fractional shares in a company at a random moment without regard for the current price? Odds are the recipient will never cash them out — too much effort for too little value. Retail stores should not get into this business unless they plan on offering a service to buy back those shares.
If you want your grandkid to learn about the stock market, buy them a (whole) share or ten of a different blue-chip company on every birthday. They will receive tiny dividend checks and annual reports in the mail which may inspire curiosity by adolescence. As young adults, the mini-portfolio might pay for a semester of college tuition or a down-payment on a condo.
I own stock certificates that were given to me when I was born, on special birthdays and on special events. And as a result, I have a special attachment to those companies — I had it even before I ever did business with any of them. It’s parents and friends passing their “loyalty” on to me. I get it, and I like it.
Over a quarter of the U.S. population own stock. That’s a big market! Lots of grandparents, aunts and uncles in there who in the past bought U.S. Savings Bonds.
Feels like a novelty as stocks are volatile while the USSB isn’t. Boring yes, but USSBs do guarantee appreciation.
In the execution, a Blackhawk gift card isn’t especially sexy proof of stock ownership. And USSBs are now digital only.
There are not many retail stocks that are gift worthy investments.
An entrepreneur has an idea for a niche product. He persuades some retailers to devote some space to his product. It may sell, it may fizzle, or it may flop right away. As long as there is no immoral or egregiously offensive component to the product, what’s the problem? Giving the gift of stock ownership may not be for everyone, but as Brain Kelly points out, more than 75 million Americans participate. This is an educational gift that may become a value gift. There are many more upsides and downsides to this product.
Is it the most profitable way to invest in securities? No. Is it a great way to get friends and family involved in planning their financial future at any age? Absolutely! I LOVE this idea!
If it makes sense for the store(s) and is good for everyone directly or indirectly involved, by any and all means put it on the inventory list and shelves. Selling good things is what we are here for and certainly what we do best.
I will give it credit for being high on novelty value; other than that, it’s like any other gift card. An illiquid item that’s much less useful than just writing someone a check, and yet no more thoughtful.
James Tenser is right on. There is a huge difference between a relative or friend directly buying a stock certificate in the days of yore, or full shares bought for someone regularly as a recurring investment gift , as opposed to a small denomination plastic “gift card” for fractional stock ownership that is sold through a middleman and can be redeemed IF the recipient meets all restrictions and gets around to it. This idea basically seems like just a way for gift givers to waste their money.
I’d have loved to read how the questions were worded on that September Blackhawk survey, by the way!
This is a complicated and convoluted way to sell stock. Anyone can easily open a stock account at any one of the major brokerages online, and get stock this way as well (and can easily buy and sell their stock and every other one available for trade).
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It’s a nice idea … but more academic, or a “learning moment,” than a real driver of thoughtful gift-giving. Sure aunts, uncles and grandparents may buy a few of these. But the kids might roll their eyes.
I don’t think many consumers will want to buy or receive stock gift cards. Do consumers really want to educate loved ones about the ins and outs, risks and rewards of stock for the holidays?
Being that most Americans have no idea of how the stock market really works — and Gen Z and late Millennials would rather have a new video game then a strong investment, this idea will slowly fade off the shelves.
Getting stock in sports teams funds or a special index fund centered on gaming or sports makes more sense. I did get my wife actual stock in the Green Bay Packers, since it is a team owned by the fans. They have a great gift program with the actual shares certificate, etc.
Get the kids a certificate of ownership to a stock index fund — safer investment and a no-maintenance type place to put the money. Other option — get them nothing! They have too much stuff already!
Worst way ever to invest. Use a gift card to buy fractional shares in a company at a random moment without regard for the current price? Odds are the recipient will never cash them out — too much effort for too little value. Retail stores should not get into this business unless they plan on offering a service to buy back those shares.
If you want your grandkid to learn about the stock market, buy them a (whole) share or ten of a different blue-chip company on every birthday. They will receive tiny dividend checks and annual reports in the mail which may inspire curiosity by adolescence. As young adults, the mini-portfolio might pay for a semester of college tuition or a down-payment on a condo.
I own stock certificates that were given to me when I was born, on special birthdays and on special events. And as a result, I have a special attachment to those companies — I had it even before I ever did business with any of them. It’s parents and friends passing their “loyalty” on to me. I get it, and I like it.
Over a quarter of the U.S. population own stock. That’s a big market! Lots of grandparents, aunts and uncles in there who in the past bought U.S. Savings Bonds.
Feels like a novelty as stocks are volatile while the USSB isn’t. Boring yes, but USSBs do guarantee appreciation.
In the execution, a Blackhawk gift card isn’t especially sexy proof of stock ownership. And USSBs are now digital only.
There are not many retail stocks that are gift worthy investments.
An entrepreneur has an idea for a niche product. He persuades some retailers to devote some space to his product. It may sell, it may fizzle, or it may flop right away. As long as there is no immoral or egregiously offensive component to the product, what’s the problem? Giving the gift of stock ownership may not be for everyone, but as Brain Kelly points out, more than 75 million Americans participate. This is an educational gift that may become a value gift. There are many more upsides and downsides to this product.
Is it the most profitable way to invest in securities? No. Is it a great way to get friends and family involved in planning their financial future at any age? Absolutely! I LOVE this idea!
If it makes sense for the store(s) and is good for everyone directly or indirectly involved, by any and all means put it on the inventory list and shelves. Selling good things is what we are here for and certainly what we do best.
I will give it credit for being high on novelty value; other than that, it’s like any other gift card. An illiquid item that’s much less useful than just writing someone a check, and yet no more thoughtful.
James Tenser is right on. There is a huge difference between a relative or friend directly buying a stock certificate in the days of yore, or full shares bought for someone regularly as a recurring investment gift , as opposed to a small denomination plastic “gift card” for fractional stock ownership that is sold through a middleman and can be redeemed IF the recipient meets all restrictions and gets around to it. This idea basically seems like just a way for gift givers to waste their money.
I’d have loved to read how the questions were worded on that September Blackhawk survey, by the way!
This is a complicated and convoluted way to sell stock. Anyone can easily open a stock account at any one of the major brokerages online, and get stock this way as well (and can easily buy and sell their stock and every other one available for trade).