The Xbox gift card is akin to a gift voucher; a predetermined credit is transferred to a card, which is used to purchase goods or services from a gaming console or the relevant online gaming store. The card is beneficial for a gaming company because they offer a convenient and secure method through which gamers can buy games without requiring a credit card. The Xbox gift card industry is a well-defined industry with two players that stand out: the Xbox gift card company and retail entities or superstores. The platform works as follows: the Xbox gift card company sets prices that the retail stores charge on the resale value of their cards.
The more informed the Xbox gift card company is about the price-setting relationship that exists between them and the retail stores, the better satiated they are in achieving their profitability and sales goals. Understanding consumer gaming habits would enable the Xbox gift card company to forecast the quantity of games that will be demanded at the respective retail stores. The Xbox gift card company would be able to charge the right price to the retail stores. The quantity of sales will also reveal potential business opportunities; as a company, they may now be able to expand if they are continually running out of inventory. The expanded facilities would cut down the variable costs associated with purchasing and storing large inventories. This will enable the Xbox gift card company to be more profitable.
Overview of Xbox Gift Cards
Xbox gift cards are plastic cards or e-gift cards issued by a specific provider to customers who then use the card to pay at their outlets. Once the customer is done using up their balance, they discard or lose the card, and this is how the revenue model for this business is arrived at. The customer would have handed over X amount throughout the time that it took to use the amount. The business still holds a liability to the customer, but they have the use of the money in the meantime and this can be a lot of money if a business issues a lot of gift cards. From an accounting perspective, the negative unearned revenue stays in place until such a time as it is used.
When the goods or services are finally provided or used, in part or in whole, the business reverses the unearned revenue, which is now regarded as an income, and reports the amount as a sale. At this stage, the business can reflect on its past operations and can recognize the fact that the revenue is earned and realizable and remove the associated unearned revenue liability from the balance sheet. This is because at this point in time, the business has satisfactorily performed on their end of the deal.
Uninvoiced billings are the amounts that have not yet appeared as a claim against the money that has been received and it is there to stop the income from being recognized as income too soon. The fact that there are unearned revenues also means that the business is able to keep control of their assets throughout the revenue process. There is no ambiguity in the amount of gift cards that a business has issued, and the fact that some customers will forget to redeem it gives the business no right to anticipate this revenue. Redeeming gift cards for cash should be viewed as a voluntary private-sector contribution towards the business' continued financial health.
Key Players and Market Trends
For every Xbox point reseller, there are several key players involved in the process. First, the card exchange market will always have two types of buyers. Retail consumers want to shop at specific stores without having to set up an account. For Xbox resellers and other resellers with cash flow, traffic properties generate the sell Xbox gift card needs. Lastly, card exchange market campaigns search for the traffic necessary to facilitate one or more gift card transactions. Data indicates strong search demand for digital gift cards before the termination of the Neediest cases allowed in the second year.
Between 1,000 and 10,000 searchers look for board software to resell gift cards most months of the year, indicating a significant amount of sales demand. More than 500 and more than 100 Xbox point resellers search for "sell Xbox points" most months. However, a significant number of online inquiries do not support additional revenue in years where the cash crunch is much more significant. Prime Day at the start of the busy second half looks to be a doozy year after year; the latest study of sales converts the total amount. Their funding was not enough to conclude the period of redemption themselves, but they hope to go over $1 billion year after year.
Optimizing Sales Strategies for Xbox Gift Cards
We have presented a game-theoretical model where each seller of Xbox gift cards can make use of strategic pricing to maximize their profit. With rational sellers in this market, we have more varieties and bigger discounts on Xbox gift cards. From sellers' strategies, we learn that there should be more places where consumers can obtain gift cards easily and cheaply. This paper shows that a closer supplier of electronic gift cards can be beneficial for all suppliers because they lead the market at higher prices. They are also favorable in that consumers prefer electronic cards. They can easily undercut the retailer's electronic cards at a price that is higher than the consumer's convenience price and their markup. The retailer, on the other hand, can offer all consumers a wide range of Xbox gift cards at the lowest price possible so that the supplier will make the most reputational markup on the cards.
Target Audience Analysis
In order to effectively sell gift cards, we must identify a target audience. Elementary school-aged students generally don't have much money to purchase gift cards. Therefore, they are not a good target. High school and college students are also unlikely to purchase gift cards since they have very little disposable income. We want our target audience to be aged 25 to 30 and earning a reasonable salary. Luckily for us, most video game buyers fit this demographic.
The video game industry has continued to cruise along despite economic recessions. Publishers strive to design games that appeal to the largest possible audience. They essentially want to sell a game to every person—male, female, young, and old—in the hopes of maximizing profitability. This type of grassroots targeting is not always feasible, but it is our objective. Let's specifically identify a target audience. The most reliable video game buyers are males between the ages of 25 and 35, earning at least 50K annually. They are educated and hold executive or high managerial positions in their companies. These are the people who have disposable income and the will to purchase video games, and by association are our best customers. Keep in mind that our target audience may not appeal exclusively to console owners. They may own other consoles or just generally be interested in the gaming market. We can easily cross-sell them additional online gaming gift cards.
Leveraging Online Platforms for Selling Xbox Gift Cards
As part of building an optimal online platform, consider partnering with highly reputable platforms. In each case, a platform gains access to owners of Xbox gift cards eager to make a cash sale. By having a profitable system, a financial incentive is created whereby a percentage of the transaction result is attached to the organization owning the platform. In doing so, the platform owner transfers the value of the Xbox gift card for the customer, takes the gift card as an inventory item that will be sold for a profit in the future, and transfers cash to the owner of the gift card, less the existing component amount. In other instances, the cash is offered by the store.
Building Trust and Reputation as a Seller
Nobody will want to buy from you if you don’t look reliable. The first way to build trust and reputation as a merchant is to always deliver the gift card to the buyer when they have successfully made the payment. Secondly, please be honest and let the buyer have all the details. Keep in mind that few fathers will buy an extremely mature game for a minor. Therefore, the name is everything; take a full and detailed snapshot of the card and every buyer. Please do not be fraudulent by reusing the cards if you have utilized the PIN. The following buyer of the card may get a negative balance, which doesn’t seem unfair. Full transparency always; please don’t spend the gift card before you sell it. Some buyers hate it if they still have a balance remaining on a card and call me to buy that card.
Customer Service Best Practices
These are the tested best practices for our customer service team to deliver quick and effective service for your customers. Use these tactics to relegate any remaining customer issues from urgent must-resolve situations to routine automated issue identification and resolution.
Someone Available Around the Clock Whether late at night or early in the morning, if a customer receives an error message, their order status is unclear, or their request for an update goes unanswered, this gives a high-risk customer time to panic and start an anti-fraud process.
Automate as much of the support process as possible to solve these urgent customer issues even when your team is asleep or handling other needs. Generic automated responses can be combined with some follow-ups if the customer requests more help. By making the whole process self-serve, you lower barriers for customers who are just curious, yet without taking any live time from your team.
Managing Inventory and Stock Levels
This chapter deals with the management of inventory and stock levels of Xbox gift cards for profit maximization. We show that inventory and stocking level decisions are heavily interrelated with price protection policy and duration management policy considering uncertainty. In addition to this, we discuss the implications of some real-world policies for inventory management strategies. In our framework, the firm adopts either a full markdown or a two-tiered pricing policy for demand fulfillment when the items age. Here, we examine the implications of these price-induced inventory disposal policies and give guidelines for the firm to select an optimal markdown or a price discount policy for stock aging deployment.
We develop the profit functions of the markdown policy and the two-tiered pricing policy with stock-based demand diversion; asymmetric item lifecycle costs, which include a positive salvage value in the markdown policy, and inventory holding and stock levels. Based on these profit functions, we derive and compare two optimal inventory evolution processes, establish some properties of these processes, consider two deciding problems concerning the full markdown and the two-tiered pricing policies, and finally provide some guidelines. We examine the approaches of flat pricing and infinitely time-varying price policies by taking appropriate limits. We first find the optimal inventory evolution process for the markdown policy. We also obtain conditions under which the two-tiered pricing policy will be used instead of the single-price policy so that the stock-based demand diversion effect will be more emphatically considered.
Supply Chain Management
A company often likes to use discounts to speed up the launch of products or to promote them. A company is currently launching a new gaming console into a very competitive market, which is causing the company to question which discounts, if any, should be used. Does the launch schedule facilitate the company’s inventory control and sales goals?
The case develops supply chain profit maximization concepts and issues as it challenges the student to answer questions such as, “Should backordering be allowed on popular cards, and if so, on what gift card barcode exchanges?” The importance of inventory management and inventory positioning, “Will the value of availability be reduced for different exchanges which are reimbursing taxes at different rates?” as well as response timing. Many real-world features make this concept particularly instructive for college students, including the ability to model multiple sources of delay and value and demand distinction and creation. Production and demand seasonality, scale, and return rate dependencies can also be explored. Deferred delivery demand is present in the barcoded exchange system. Shipment processes include the trade-off between bulk and group size enhancements. Symbol barcoded cards are produced by charitable organizations, which can use their own marketing to increase the demand and make changes that prioritize the orders. In addition, demand-constrained buying, one-source risk issues, and several supply chain management features are modeled.
Customer Retention and Loyalty Programs
Customer loyalty rewards and customer retention offers go hand in hand to increase market CRM. By establishing customer retention policies, marketing managers ensure a high and more lasting level of customer satisfaction and increase the repurchase intention towards the gift card distribution channel. Regardless of the direction of the influence, satisfaction and repurchase intention promote loyalty. Improving customer satisfaction with the retention program will increase the repurchase intention of their customers, increasing the repetition of purchases from the gift card reseller. Additionally, cardholders will view their experience favorably due to their savings. A CRM focus can provide the basis for establishing and renewing subscriber relationships, thereby ensuring the continuous accumulation of pocket money, which should drive additional purchase behavior through savings strategies and systematically build profits. The return flow not only promotes high loyalty but also drives electronic word-of-mouth towards the provider of the cards. Consumers can simulate repeated and widespread receipt. In short, we believe that revenue targets should be concentrated in the direction initially implemented. It also places sustainable CRM in the business strategy. Small but unexpected savings can weaken retailers and reduce trips. At least Christmas purchases can accumulate gift cards in a bad mood and enhance the consumer's own Christmas card. Some areas of research are then proposed based on the findings of the present study, and it seems necessary to verify whether the mitigated findings can be exposed to different providers or consumer needs and preferences.
Creating a Loyalty Program
Currently, customers receive no benefits for purchasing games through Xbox Live directly from the Xbox 360 console. Taking a cue from many modern retailers, Microsoft has considered creating a loyalty program that grants bonuses to customers who purchase downloadable games for their Xbox 360. These points could be used to redeem items from Xbox Live such as desktop themes, gamer pictures, TV shows, music videos, movie trailers, arcade games, permanent Xbox 360 license transfers, or have the points converted to real money to spend anywhere a debit card is accepted. For point of purchase use, customers could receive a "cash back" credit at the time of checkout. Points can also be given to customers for different transactions because of consumers' special days, such as on their birthday or during the holidays. The aforementioned points promotion would be the first to appear at Xbox Live's point of purchase. It is quite feasible that points promotions for online purchases not associated with Xbox Live will begin to appear in the upcoming future. By purchasing gift cards already priced at a discount and then using them to purchase items from Xbox Live, the consumer is getting a "check" for up to 20% of the money they have spent at no additional cost. By spending more money than the value of the card, a greater "check" or rebate will be issued. The consumer will want to spend even more points, which may lead to a larger transaction and more of a "check" for them in the end.
Analyzing Sales Data and Performance Metrics
We use sales data collected from a company selling gift cards in order to quantify the benefits that are possible from dynamic price optimization policies. The data represents the particulars of unique transactions during an approximately 3-month period in early 2018. These transactions were performed by unique users. The gift cards being sold can be of various denominations, and the content of the gift card can be used to purchase either products or digital services within the marketplace. As a result, consumers can have highly heterogeneous valuations for the gift cards being sold.
We find that several families in the system of dynamic pricing policies about which we have performed analysis characterize this sales data reasonably well. In particular, for small time to the gift card's allotted expiration date, the outcomes of our analysis reveal that the policy that is optimal for a market populated with only exogenously given consumer types realizes the highest net expected profit. For moderately large and for large times to expiration, dynamic pricing gains decrease monotonically in the rate of consumer type arrival. Concentrating on the realization data for the partitioning policy shows that, at least for small times to expiration, implementing the revealed optimal partitioning schedule relaxes the conditions under which some properties of the optimal partitioning schedule hold from boundaries must be intersections to boundaries must be neighborhoods.
Key Performance Indicators
The first step towards ensuring that the sale of Xbox gift cards brings in maximum profit is to measure its performance. The following are the key performance indicators for the sale of Xbox gift cards: total dollar value of Xbox gift cards activated; volume of Xbox gift cards activated; Xbox: Other store dollar moderation. Total dollar value of Xbox gift cards activated is the primary KPI and needs to be monitored, and the sale of Xbox gift cards targeted towards ensuring that all trade compliance, regional, and store targets are achieved.
Activated value is less affected by exchange rate fluctuations and is not as volatile as sales in dollars, and hence when it starts to become difficult or impossible to manage, the business can manage a shift in dollars to other products, and the activation of Xbox gift cards adds value in identifying when this needs to occur. To ensure you are selling the correct dollar amount of Xbox cards, it is important for the Xbox Business Team to be aware of the sales performance of the first three months of the fiscal year and how the correlates to the total year’s budget. This will enable the team to identify any risks that are occurring early in the fiscal year rather than waiting until the financial year ends, and no targets were achieved. The volume of Xbox gift cards activated is a secondary KPI and needs to be closely monitored, and review and action plans put in place to grow sales when it starts to fall behind expectations.
Handling Customer Disputes and Complaints
Handling customer disputes and complaints is always a challenging task, since the rule of thumb in commercial activities is maintaining good relationships between all involved parties. Being an asset to both the customer and the company, Microsoft provides different methods for customers to arrange their affairs regarding purchasing any of the services offered by them. It is well recognized that there are different types and degrees of customer disputes and complaints. These can happen when the game wouldn’t be suitable for one of the family members, a customer files a complaint, and the other family member is interested in playing another suitable game that is not available in the gaming store, or there may be some problems with the credit card, incorrect billing, or similar issues.
All the previous problems can be solved through a group of mechanisms clearly stated on a special page related to managing your account. The customer can perform all the interactions needed to settle the affairs related to the purchases made correctly. In a situation where the customer and the company can reach an agreement, they can help Xbox owners with another useful task, through purchasing a prepaid Xbox Live subscription to use the special services provided on the gaming console. Our focus was to provide the related visitors with a new perspective while discussing the suitable service, Xbox Live subscription, and to offer some guidelines to be more enthusiastic when purchasing this card, as well as how to avoid unwanted problems that may occur while utilizing it.
Scaling Your Xbox Gift Card Business
What's up, guys? It's your boy, Drew, and today we are discussing scaling. Last week, I brought you a video where I discussed scaling for the sale of Bitcoin to show you that we can indeed scale and make more money from it, right? We are discussing gift cards here, but come on, we are just trying to tap into the reputation we have built as traders to get into the big business, which is Bitcoin.
Today, we are on a different topic altogether. Being able to scale the Xbox gift card purchases from those random sellers is going to be discussed at length today for the entire week. For now, I am just going to give you a general overview of what we are supposed to be doing to scale, right? With the scaling strategy, we can still provide a means by which the random sellers can get rid of as much as $2000 on a daily basis. There are a few challenges to this, though. It comes with a slightly higher rate, and so it no longer becomes good business for the random seller.
Future Trends and Innovations in the Xbox Gift Card Market
There are several future trends and innovations that the Xbox gift card market can pioneer to attract an increase in the number of customers. The first would consist of forecasting the sales cycle of holiday or event-centered demand for digital cards and altering sales strategy to encourage the purchase of Xbox gift cards. One possible promotion that could be used would be a varied pricing strategy where a consumer receives a larger bonus when purchasing a gift card during slow seasonal sales periods. A second possible future trend that could be a primary focus is the growth in the customer base. The goal of the Xbox gift card market should be to promote the sale of gift cards among non-gift card-giving consumers and move closer to gift card-wide acceptance. The final trend in the gift card market concerns the options that consumers are given in personalizing their products. Research has shown that gift recipients are generally unhappy with receiving a generic gift, such as cash or a gift card. A possible area of growth in the Xbox gift card sector would be to offer the consumer the opportunity to personalize their cards by adding a photo or personal message. Through this, the consumer is still able to provide the flexibility of choice of the gift card retail. These future trends and innovations for the Xbox gift card market are predicted to maximize profits as well as the market’s performance.
