Sunday, June 29, 2014

We're living in gift card nation!

How big is the gift card industry?
In 2012 alone gift cards reached $28.79 billion in sales, and they are expected to increase dramatically every year thanks to new consumer shopping habits of shopping online, with digital commerce, etc.  They are so popular that approximately two-thirds of U.S. consumers have purchased at least one gift card.

What’s the average gift card value?
When gift cards are offered in increments, the most common purchased amount is $25.  The average dollar amount for gift cards is $43.75.  By the way, on average, men spend $30 more on gift cards than women, about $172 to $142.

Gift cards during the holidays.
One out of every four gift cards purchased is during December 21 and December 24!  Birthdays are actually the most popular occasion for a gift card, followed by Christmas and then Mother’s Day.  As of 2011, gift cards accounted for 18% of all holiday purchases! 

Why do retailers love them?
To put it bluntly, retailers do stellar business with gift cards.  That’s because the average consumer purchase is 25% higher with gift cards than if they paid any other way.  They also visit the store/site with 25% more frequency if they have a gift card.  Consumer spending is 6% higher when the company offers a loyalty card program.  In fact, research shows that gift card displays are the most profitable area of selling space in stores.  Retailers can also use gift cards to track consumer behavior and marketing research.  But the biggest reason gift cards benefit retailers are the economics of unused cards…

How many gift cards are left unused or partially used?
Incredibly, it’s estimated that each U.S. household contains about $300 of unused gift cards!  40% of people who receive gift cards do not spend the total value of the card.  That’s a huge number!  If you add it all up, between 2005 and 2011, more than $41 billion in gift cards went unused!

How about overspending?
61% of those who have gift cards spend more than the value of the card. The average person who shops with a gift card spends at least 20% more than the value of their card.  55% of consumers take more than one trip to the store or one search on the store online to spend their card.  Add that all up and you’ll see that gift cards are a huge cash cow for retailers.

How about digital cards?
These days, even printed plastic cards are behind the tech curve, as digitally generated and transmitted gift cards are the new wave – even easier to send and spend.  It’s as simple as going on a retailer’s site (like and entering your payment information and the recipient’s email address.  Believe it or not, those who purchase digital gift cards spend even more – about 10-15% more than on their plastic counterparts.  By 2015, 61% of retailers surveyed plan on going digital with their gift cards.  The future will reveal even more innovation with QR coins and other incentive-based shopping loyalty programs.

Can gift cards expire?
New regulations (we’ll go over this in a bit,) mandate that gift cards must remain valid for 5 years, and any money added to the card later on is good for 5 years from that date.

What about gift card service fees?
AS if gift cards didn’t make retailers enough profit, you can still be charged a fee to purchase the card.  Now, all fees must be clearly disclosed on the packaging at the point of purchase.  New regulations limit the amount of service fees.  For instance, you can only be charged an “inactivity fee,” if you haven’t used it for a year, and you can only be charged one fee per month. 

What do the new regulations say about gift cards?
In order to protect consumers, Federal Regulations govern rules on gift cards sold on or after August 22, 2010.  These cover store cards and general use gift cards (like Visa, Discover, etc.) but not other prepaid debit cards, savings cards, or cards that are part of promotions.  Research shows these regulations have worked – the amount of unused cards now is only 1% of sales, while it used to be as high as 6.4% before 2010.

Can you redeem a gift card for cash?
This is a tricky area, with state and federal laws often conflicting.  In all practicality, the answer depends on the policy of the card issuer.  Some retailers allow gift card redemption for cash or at least a combination of cash and merchandise.  Federal Regulations starting in 2008 mandate that any gift certificate with a balance under $10 is redeemable for cash, which aims to protect consumers from overspending or retailers making “phantom profits” on unused remaining portions of cards.

What happens if your gift card is lost or stolen?
Unless you’ve registered the card or have the receipt, you’re out of luck.  That’s why you should always save the receipt and go through the registration/activation procedure (usually online) once you buy or receive a gift card.  If you’ve done that, most retailers have a protocol to replace your card.

What if the retailer goes bankrupt before you use their gift card?
Bankruptcy protection will most likely render the gift card worthless, so spend it quickly with shaky or smaller retailers.  However, in the event of BK, you can ask the retailer’s competitors if they’ll honor the card, or use it at another store under the same corporate umbrella.

Where is the best place to purchase gift cards?
 Most gift cards are sold at the point of purchase in stores, but often these come with extra activation fees.  Buying cards or digital cards on the retailers website is a great idea as long as you read the fine print on their fees.  A huge secondary gift card selling market has emerged, with people selling them on EBay or card exchange sites like,, or  You often can purchase them for 75-80% of the card’s value (or sell unwanted cards for the same,) but be careful – it’s easier to get swindled with counterfeit or expired cards, etc.  Also, the most popular brands will sell quicker and at less of a discount.

But my research reveals that the best place to buy gift cards is probably big discount warehouse clubs like Costco and Sam’s Club.  They routinely offer them at less than face value of the card, some times up to 20% off if you buy a card for $100 or more.  They’ll have plenty of big brands like iTunes, restaurants, and popular national retail chains.  They have fantastic customer service if you ever have an issue. 

Wednesday, June 25, 2014

43 Fun Facts about ATM machines.


1. There are several highly contested claims as to who originally invented the Automatic Teller Machine.

2. One version is that the ATM machine was invented by Luther George Simijan, a US inventor with many patents, back in 1939.  The mechanical (not electronic) cash-dispensing machine was opened by the City Bank of New York.

3. However, Simijan, the inventor, soon remarked, “The only people using the machines were a small number of prostitutes and gamblers who didn’t want to deal with tellers face to face.”  It was removed 6 months later for lack of customer approval.

4. John Shepher-Barron, a Scottish inventor, reportedly was in the bathtub when he had his “eureka!” moment, coming up with the idea of a vending machine that dispenses money, not chocolate bars.  He pitched the idea to the British bank Barclays and they adopted it by 1967.  The machine used PIN codes but not magnetic stripes – it relied on a radioactive isotope carbon to initiate a withdrawal!
5. The first automated, electronic banking machine was introduced by Donald Wetzel, a former pro baseball player.  Wetzel’s ATM was installed in 1969 by Chemical Bank in Rockville Center, New York.  It was the first machine to read and use the magnetic stripe on plastic bankcards.

6. The use of ATMs really started to take hold around 1973, when 2,000 machines were sold and installed in the United States.  The original price tag was $145,000!

7. These days, an ATM machine costs less than $3,000!

8. ATMs became ubiquitously accepted in 1977, when the chairman of Citibank took a huge gamble and spent $100 million to install the machines all over New York City.  The following January, a huge blizzard hit the city, closing roads and banks, but the ATM machines were still open and use increased by 20%.  After the blizzard, Citibank introduced its “Citi never sleeps,” campaign that depicted a customer plodding through the snow to get to an ATM, and they quickly grew to household acceptance.    

9. When ATMs first gained widespread popularity, it was predicted the number of bank tellers would decline.  In fact, in 1985 there were 484,000 tellers in the U.S. and today there are about 550,000.

ATMs in the U.S.

10. The U.S. has more ATMs than any other nation, but the number declined.  We maxed out around 2005 with 396,000 machines but by 2007, there were only around 360,000.

11. Now, it’s estimated there are approximately 371,000 ATMs in the United States.
There’s a new ATM installed somewhere every five minutes.

12. It’s not just big banks but ISO’s – Independent Sales Organizations – that are adding new ATMs.  In fact, ISO’s represent about 60% in the marketplace today!

Around the world.

13. It’s estimated there are around 2 million ATMs around the globe.

14. There are even two ATMs in Antarctica!

15. Japan has the most ATMs per capita.  After that it’s Spain, South Korea, the United States, and Canada.

16. ATMs have different names in different countries.  In Australia and Canada they’re called “bank machines, “or “money machines,” in New Zealand they’re called “Cash Points,” “Hole-in-the-walls,” in the United Kingdom, and “Bancomats,” in Europe.

17. It took China until 1987 to catch on and install their first ATM.

Customer use.

18. 60% of Americans ages 35-34 and 51% of Americans 25-49 use an ATM at least 8 times per month.

19. Customers who use ATM machines spend an average of 20-25% more than customers who don’t use them. (Why is that?)

20. ATM’s are most popular on Fridays.

21. On average, ATM customers use it about once a week.

22. A bank’s ATM averages 7,000 transactions per month.

23. 78% of the transactions on those machines are withdrawals. 

24. ATM usage is actually declining slightly for two reasons: 1) The popularity of increased online banking and, 2) People use cash less as debit and credit cards are accepted everywhere nowadays.


25. The average ATM withdrawal is $60.

26. When retail locations have ATMs that dispense $20 bills, their sales rise by 8%.  When they dispense $10 bills, they rise by 14%.

27. When bars and nightclubs have ATM machines, they retain up to 80% of the money dispensed!

28. Cash retention by retailers ranges from 30-40%.

29. Most ATM machines hold around $20,000 in cash at any given time, but in high-traffic areas (casinos, airports, etc.) they can hold as much as $100,000!


30. Before 1988, there were no surcharges for using ATMs.  Valley Bank of Nevada, operating in Las Vegas casinos, first started charging customers who did not belong to their bank.

31. From 1988 until 1996, foreign ATM fees averaged about $1.01 USD.

32. As banks and third parties realized the profits they could make they started raising ATM fees.  By 2003, they averaged $2 and now they can be as high as $6.  This is not based on an increased expense or cost of doing business – it’s pure profit.

33. Banks are required by law to disclose their surcharges and fees at the point of transaction.  However, this could be on the screen or even a sticker on the ATM.  But that won’t disclose if your bank has a foreign “ATM network fee,” which may add to the transaction cost.

34. If all of those fees weren’t enough, some banks are starting to charge a “Denial Fee,” if your transaction is denied because of insufficient funds or you exceed your daily limit.

35. In response to the barrage of ATM fees, some independent and online banks, such as USAA, Capital One, and Ally, do not charge ATM surcharges when you use another bank.

36. A good way to avoid ATM fees is to make a cash back purchase at a retail store when you’re buying something – most retailers allow this now up to a certain dollar limit.


37. In 1996, an Englishman named Andrew Stone was convicted of stealing more than one million dollars (US equivalent) by aiming a high-definition video camera at an ATM from down the street.  He recorded names, pin numbers, etc. and used those to create his own clone cards and withdraw up to $10,000 an hour!

38. The first fake ATM was installed at the Buckland Mall in Manchester, Connecticut in 1993.  A local gang called the Buckland Boys modified an out-of-service ATM, allowing them to steal customers’ financial data and rack up over $100,000 before being caught.

The future of ATMs.

39. Over the next three years, almost all of the ATMs in existence will be replaced by models with updated technology.  They’ll have a favorite withdrawal button, communication in 6 foreign languages, and have expanded security hardware and software protocols to protect against skimming.

40. About 30% of ATMs are equipped to serve people with visual impairments.  By 2015, they all will.

41. New ATM technology includes biometric functions that allow customers to be identified by their fingerprints, eyes, face, or voice!

42. Expect modern ATM’s to sell a lot more than just banking services – they’re expected to dispense everything from financial products to movie tickets to flight reservations!

43. Virtual currency services like PayPal and BitCoin are looking to change the game and push innovation when it comes to financial transactions.

Saturday, June 21, 2014

20 Shocking facts about credit and debt.

1.  The total U.S. outstanding revolving debt was $870.4 billion as of April, 2014.

2.  The average value of a credit card transaction in the U.S. is $94.

3.  37 percent of small-businesses say their businesses have relied on credit cards to meet capital needs in the 12 months.

4.  80 percent of business cards included an “any time” clause which gives the bank issuers the right to change account terms at any time with little or no notice and the cardholder cannot opt out.

5.  Consumers are holding fewer credit cards.  The average number of credit cards held by cardholders at the end of 2009 was 3.7.  The average number of credit cards consumers had in 2012 was 1.96.

6.  60 percent of college seniors have a credit card.

7.  The most popular credit cards are MasterCard and Visa, by far. MasterCard has 180 million cards in the United States and 551 million cards in the rest of the world.  Visa has 278 million cards in the United States and 522 million cards in the rest of the world.

8.  86 percent of low and middle-income households who incurred expenses resulting from unemployment took on credit card debt as a result.

9.  The states with the highest amount of average credit card debt are Alaska ($7,045), Colorado ($5,728), North Carolina ($5,619) and Connecticut ($5,532).  The states with the lowest amount of average credit card debt are Iowa ($3,874), North Dakota ($4,006), Wisconsin ($4,252) and South Dakota ($4,257).

10.  MasterCard and Visa are also the biggest credit cards by volume, with U.S. $534 billion and $981 billion in purchases in 2012, respectively.

11.  Nearly half of low- and middle-income households carried debt from out of pocket medical expenses on their credit cards.

12.  The charge-off rate on credit cards from top 100 banks was 3.87 percent as of 2013.

13.  33 percent of adults do not pay all of their bills on time as of 2012, up from 28 percent in 2011.

14.  The average Annual Percentage Rate on credit card with a balance on it was 13.14 as of February 2014.

15.  The national average FICO score was 646 and the national median FICO score was 723 as of July 2013.

16.  85 percent of college students don’t know their credit score

17.  The first national general-use credit card that allowed balances to be paid over time was the BankAmericard, issued in 1958.  In 1977 they changed their name to Visa.

18.  MasterCard began in 1966, when a number of banks formed the Interbank Card Association. In 1969, the Interbank Card Association bought the rights to use "Master Charge" from the California Bank Association. It was renamed MasterCard in 1979.

19.  Unauthorized credit card transactions made up 0.037 percent, or 37 out of every 1,000, credit card transactions in 2012.

20.  Law enforcement agencies received more than 1.8 million financial complaints in 2011: 55 percent were fraud complaints; 15 percent were identity theft complaints; and 30 percent other types of complaints.

Thanks to, StatisticBrain, and for the data!

Wednesday, June 18, 2014

The skyrocketing cost of higher education.

Higher education has a bigger price tag than ever – far outpacing our rise in income - and it’s distancing a lot of lower and middle class families from the hopes of sending their kids to college or university.  That’s the consensus of new data published by the reputable think tank, the Pew Institute, among others.  But just how high have college costs soared, how are we still paying them, and why?

What’s not under dispute is that higher education still pays off in terms of job and income prospects – according to the aforementioned Pew, Americans ages 25 to 32 who were college graduates earned $17,500 more on average than their peers who were only high school graduates.  Over the working life of an adult, that gap probably only widens – a huge testament to why we still endeavor to send our children to a university campus in the fall.

First, a look back at the context of college education 50+ years ago, post World War II.  With GI’s returning from war and the population booming, universal access to public education was considered the ladder to pull yourself to a better life.  A college degree (sprinkled with a lot of hard work and loyalty to/from the same employer for life) was the key to open the American Dream – financial comfort, security, home ownership, and the never-ending entitlement of each generation being more prosperous than the last.  It didn’t matter who you were, how much money your parents had, or where you came from – education was seen as a birthright for all who wanted to take advantage, and especially by lower and middle class families.

Even 20 years ago, less than 50% of college graduates received their diplomas with any student loans to debt to pay, and it was less than $10,000 on average (adjusted for inflation.)  Fast forward to 2013-2014 and the number of college graduates with significant debt has skyrocketed. The latest numbers for the 2012-2013 school year show that about 70% of college graduates have student loans and other debt to pay from their education.  Even more telling is that each student with loans has an average of nearly $30,000, according to the Institute for College Access and Success. 

However, there is more to the story.  At quick glance, it would seem that the cost of college tuition has actually slowed its ascent, or is actually plateauing.  Last year, the average cost of four-year public colleges went up only by 2.9%, which was the smallest percentage increase since the middle of the 1970’s.  

Not so fast.  While tuitions may be leveling off after a precipitous thirty-year climb, the cost of college is still shooting skyward.  Factor in fees, school supplies, room and board, books, etc., and it’s easier to see why more would-be students are getting squeezed out of a college education.  When factoring in tuition AND those various essential fees, the average cost of a public four-year university has increased 27% over inflation over a five-year period, from the 2008-9 school year to 2013-14.

When looking at college costs, it’s best to consider what experts call, “Net Cost.”  That is, tuition plus those fees we discussed, less the amount of aid and grants available to help students in need, amounting to their net out-of-pocket expenses.  This is a significant distinction because ever since the GI Bill was created, the United States government has been in the business of incentivizing college education through grants and aid.  Most common are Pell Grants, Academic Competitiveness Grants, and school-dispensed financial aid.  In theory, this makes college education possible and affordable for millions of deserving kids ever year.  In reality, the financial aid system has been described as, “Arcane and inconsistent,” in a recent report by National Public Radio.   Applicants must show a, “demonstrated need,” to gain financial aid and grants, yet the economic math to qualifying still allows just as many middle class families to fall through the cracks as those that qualify.  

During the recent years of our recession, rolling into 2008-2009, the White House pumped huge money into public education support as a way to offset stalled incomes shutting the door on higher education.  Pell Grants alone doubled from 2008-9 to 2010-2011, an astronomical number.  So even though the country was feeling the pinch, the cost of higher education was like a leaking boat with a lot of people bailing water out at once – still afloat, but destined to sink eventually.  Since 2008-9, Federal grants have been decreased by at least 10%, contributing to the feeling of seasickness among families looking at a tuition bill, once again.

No matter how you slice the cost-of-education pie, we’re left with a disturbing reality – the cost of education, adjusted for inflation, has more than tripled between 1973 and 2013.  Current data shows that the cost of a four-year, in-state public university or college averages $8,893.  The corresponding cost for a private university is $30,090, a 3.8% increase since only a year ago.

Monday, June 9, 2014

25 Fun facts about Father's Day.

1. There are two stories of how Father’s Day came about, one that dates back to West Virginia in 1908, and the other to Spokane, Washington around the same year.

2. On July 5, 1908, a West Virginia church hosted the country’s first event in honor of fathers on Grace Golden Clayton’s suggestion.  It was a sermon in memory of 362 men who’d died the previous December in a mining accident nearby.

3. The same year, Sonora Smart Dodd, a woman from Spokane, Washington, began rallying support for an annual day for Fathers, the equivalent to Mother’s Day.  She did it to commemorate her father, William Smart, who was a civil war veteran and widower, who went on to raise 6 children by himself.   

4. On July 19, 1910, Washington State celebrated the nation’s first statewide Father’s Day in large part due to Sonora’s campaign.

5. In 1916, President Wilson honored the state’s unofficial holiday in Spokane by sending a telegraph from the White House ordering a flag to be unfurled there.

6. President Calvin Coolidge pushed for state governments to adopt Father’s Day in 1924, but was met with a lot of resistance.

7. Many men thought it was a trivial and frilly holiday.  As one historian documented, men of the day, ““scoffed at the holiday’s sentimental attempts to domesticate manliness with flowers and gift-giving, or they derided the proliferation of such holidays as a commercial gimmick to sell more products–often paid for by the father himself.”

8. Throughout the 1920’s, it remained a polarizing issue, with equal support for designating a national Father’s Day or combining it with Mother’s Day, forming a new Parent’s Day.  Pro-parents groups actually met in New York City and rallied in Central Park for this issue. 

9. During the Depression, retailers promoted the then-dormant holiday as an attempt to rekindle struggling sales.  They called it a “second Christmas for men,” and promoted gifts of neckties, hats, socks, pipes, tobacco, golf clubs, and sporting goods.

10. Father’s Day really took hold during World War II, when advertisers promoted the holiday as a way to honor American Troops at war, endearing the public, but still as an informal annual event.

11. Father’s Day earned official recognition in 1966, when President Lyndon B. Johnson designated an executive order to make the third Sunday in June the official day to celebrate fathers.

12. Not until 1972 under President Nixon, 58 years after Mother’s Day became official, did Father’s Day become a national holiday. 
These days, Americans spend a whopping $12.7 billion each year on Father’s Day gifts, cards, and celebrations!  That still pales in comparison to the $18.6 billion, spent each year on Mother’s Day.

13. Other countries soon picked up on the idea of Father’s Day, though they celebrate it on different dates and with different customs.  It’s celebrated the third Sunday of June in Antigua, Bahamas, Bangladesh, Bulgaria, Canada, Chile, Columbia, Costa Rica, Cuba, Cyprus, Czech Republic, France, Greece, Guyana, Hong Kong, India, Ireland, Jamaica, Japan, Malaysia, Malta, Mauritius, Mexico, Netherlands, Pakistan, Panama, Paraguay, Peru, Philippines, Puerto Rico, Saint Vincent, Singapore, Slovakia, South Africa, Sri Lanka, Switzerland, Trinidad, Turkey, United Kingdom, Venezuela, Zimbabwe.

Lithuania, Austria, Ecuador, Belgium, El Salvador, Guatemala, Nicaragua, Poland, and Uganda celebrate Father’s Day in June but on different days.

Uruguay and the Dominican Republic celebrate it in July, Brazil, China, Taiwan, and Argentina in August, and Australia, New Zealand, and Nepal in September.  Luxembourg commemorates the day in October, Estonia, Finland, Norway, and Sweden in November, and Thailand on December 5.  Iran, Bolivia, Honduras, Italy, Portugal, Spain, and Lichtenstein celebrate Father’s Day in March.

14. The rose is the official flower of Father’s Day – a white rose if the father is deceased, or red if he is living.

15. The latest census reports there are 70 million fathers in the United States; 1.7 million of them single fathers.

16. Hallmark reports that Father’s Day is their 4th largest holiday for sending cards, with 110 million exchanged for the holiday.  This year, they’re releasing 800 types of cards for fathers!

17. A National Retail Federation survey found that on average, $117.14 is spent per person on Father’s Day – still less than the $152 for Mother’s Day. 

18. When asked, fathers said they wanted to receive gift cards (31.2%), dinner (24.7%), and electronics (29%) this year for presents.

19. More than 50% of Father’s Day shoppers will buy gifts online, while only 9% will shop at mom and pop stores. 

20. According to’s Father’s Day Index, if you paid mothers a salary for their work around the house, it would be around $61,000.  The same Index shows father’s contributions to be a little over $20,000!

21. About 75% of fathers surveyed said they were more involved with their kids than their fathers had been.  Data shows that fathers are spending 86% more time with their children than their fathers did. 

22. 52% of fathers are the primary grocery shoppers for their families.  That may not sound like much, but it’s up from only 10% in 1995!

23. 81% of adults polled think Mother’s Day and Father’s Day should be celebrated equally.

24. Fathers still love nice gifts for Father’s Day (especially electronics,) but 24.7% of them said they’d like to get a homemade gift from their children this year, and 25% said they’d like to be taken out to dinner. 

25. In a very formal poll, 100% of all fathers voted to make every day Father's Day!  But until that happens, enjoy your day of recognition for being a great dad!