Lee Jones, please answer this question (re: VIP store)

[Sintax]

There is a clear discrepency in the value of fpp's to reload offers recently offered.

If you can offer a $500 gift certificate for 30,000 points, and you can clearly offer $$ bonuses for points, then why not a $500 bonus for 30,000 points?

Assuming you buy the gift cards in bulk and get a break on them (which I doubt), you make up the differnce in the 2500 or so raked hands required to release the bonus.

Does it really matter that much to the company if someone uses their points for cash or shopping at Neiman Marcus?

Seriously, I would just really really like to know the logic behind the current scheme. It would make my choice to play at PokerStars easier.

Thanks in advance.

[The_Bankroll]

because if you offer cash at the same rate as everything else in the store, then the rest of the store becomes pointless. Do you see why?

[Dire]

Stars almost definitely gets a cut of the marketed items. Eg; the $1000 Neiman cards were likely purchased in bulk for significantly less than $1000. So giving away $1000 cash for a comparable number of points makes no sense.

[Tha Stunna]

Gift certificates have to be much cheaper to buy than cash equivalents; I read somewhere that less than half of them ever get redeemed. That's why stores offer them, cause otherwise it wouldn't be worth it to make the cards/certificates. I can't blame them for doing it; stars still has the best VIP store of any site I've played, although they need bonuses/rb.

[zaah1]

[ QUOTE ]
Gift certificates have to be much cheaper to buy than cash equivalents; I read somewhere that less than half of them ever get redeemed. That's why stores offer them, cause otherwise it wouldn't be worth it to make the cards/certificates. I can't blame them for doing it; stars still has the best VIP store of any site I've played, although they need bonuses/rb.

[/ QUOTE ]
Without the amazon gift certificates, the store is really lacking for US players.

[Sintax]

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because if you offer cash at the same rate as everything else in the store, then the rest of the store becomes pointless. Do you see why?

[/ QUOTE ]

Assume you could either get a $200 value iPod or $200 "bonus" for 12,000 points. If you wanted an ipod it would be clearly the better choice to get it from the store then to take the cash and buy your own. Do you see why?

(hint, free shipping, no taxes and no additional playthrough to clear the purchase).

Hence, the store is not "pointless".

I do agree that there is a somewhat valid point to your argument. However, a frequent player will pretty much accumulate anything they could possibly want from the "stores" limited inventory. Then cash becomes the only good option anyway.

[Sintax]

[ QUOTE ]
Stars almost definitely gets a cut of the marketed items. Eg; the $1000 Neiman cards were likely purchased in bulk for significantly less than $1000. So giving away $1000 cash for a comparable number of points makes no sense.

[/ QUOTE ]

I really doubt this. Consider their electronics inventory. Buying in bulk would be retarded since these items depreciate fairly quickly. Stars isn't moving that many 50" plasma televisions to get a bulk rate on them or to stock them in a wherehouse. They may have an exclusive contract with a dealer to get a break on these items but I doubt its that much.

Also, when you consider the shipping/handling and proccessing costs and manpower for the shop items, crediting a cash equivalent to the account (which will likely get recycled back in rake as opposed to getting mounted on my den wall) is probably more cost effective in the long run.

[Dire]

[ QUOTE ]
[ QUOTE ]
Stars almost definitely gets a cut of the marketed items. Eg; the $1000 Neiman cards were likely purchased in bulk for significantly less than $1000. So giving away $1000 cash for a comparable number of points makes no sense.

[/ QUOTE ]

I really doubt this. Consider their electronics inventory. Buying in bulk would be retarded since these items depreciate fairly quickly. Stars isn't moving that many 50" plasma televisions to get a bulk rate on them or to stock them in a wherehouse. They may have an exclusive contract with a dealer to get a break on these items but I doubt its that much.

Also, when you consider the shipping/handling and proccessing costs and manpower for the shop items, crediting a cash equivalent to the account (which will likely get recycled back in rake as opposed to getting mounted on my den wall) is probably more cost effective in the long run.

[/ QUOTE ]


I am positive they are buying in bulk [at least for the gift certificates]. Just look at the current Amazon certificate situation. They will continue offering them until supplies run out. Don't forget that the gift certificates also work out as massive scale free advertising for the companies in question. Obviously I have no way to prove it, but Stars would have to be near brain dead to be purchasing the Amazon/Nieman/etc certificates at face value.

[Dire]

They are likely able to purchase the hardware items(TVs/etc) on demand at distributor prices. Again meaning a $2000 TV set costs them much less than $2000.

[Sintax]

[ QUOTE ]
Gift certificates have to be much cheaper to buy than cash equivalents; I read somewhere that less than half of them ever get redeemed. That's why stores offer them, cause otherwise it wouldn't be worth it to make the cards/certificates. I can't blame them for doing it; stars still has the best VIP store of any site I've played, although they need bonuses/rb.

[/ QUOTE ]

I doubt gc are cheaper in bulk, and I doubt Stars is shifting large volumes of cash into non-interest bearing gift cards.

Retailers have many reasons for gift cards to be worthwile. Do you see why giving someone a $100 gc to Bed Bath and Beyond would be better for that store then to give them a $100 bill as a gift instead?

I think Stars VIP program is bordering excellent. Stars does have a good store... at first glance. If you already have an iPod, a dvd player, a few good monitors and just about every poker book published worth reading then the store is basically worthless. It simply amounts to saving up enought points to spend with the concierge.

I'm wondering if you could arrange the conceirge to pay $2000 towards your mortgage?

[Sintax]

[ QUOTE ]
They are likely able to purchase the hardware items(TVs/etc) on demand at distributor prices. Again meaning a $2000 TV set costs them much less than $2000.

[/ QUOTE ]

I agree this is definate possiblitly, but when you factor in the shipping cost of a $2000 plasma tv (mine cost $298 when I bought one online, which was well worth it considering no tax and the cheaper then retail price i paid) compared to a straight up $2000 bonus which would probably generate a couple hundred in rake to clear, I don't see a benefit to stars either way.

[Dire]

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I doubt gc are cheaper in bulk, and I doubt Stars is shifting large volumes of cash into non-interest bearing gift cards.

[/ QUOTE ]

Like anything, gift cards are cheaper when purchased in bulk. There is probably an additional discount based on the free advertising. And a merchandise stocking budget will be a miniscule amount of money in relation to Stars income and other expenditures.

[Dennisa]

[ QUOTE ]
[ QUOTE ]
Gift certificates have to be much cheaper to buy than cash equivalents; I read somewhere that less than half of them ever get redeemed. That's why stores offer them, cause otherwise it wouldn't be worth it to make the cards/certificates. I can't blame them for doing it; stars still has the best VIP store of any site I've played, although they need bonuses/rb.

[/ QUOTE ]

I doubt gc are cheaper in bulk, and I doubt Stars is shifting large volumes of cash into non-interest bearing gift cards.



Retailers have many reasons for gift cards to be worthwile. Do you see why giving someone a $100 gc to Bed Bath and Beyond would be better for that store then to give them a $100 bill as a gift instead?



I think Stars VIP program is bordering excellent. Stars does have a good store... at first glance. If you already have an iPod, a dvd player, a few good monitors and just about every poker book published worth reading then the store is basically worthless. It simply amounts to saving up enought points to spend with the concierge.

I'm wondering if you could arrange the conceirge to pay $2000 towards your mortgage?

[/ QUOTE ]

Gift Certificates do come in bulk and at a discount. Reason is that Amazon saves marketing dollars and credit card processing fees by having stars purchase directly. A sale for Amazon is not a sale for Barnes and Noble.

I do not believe that stars would pay down a mortgage. I have heard they will issue a 3K Walmart gift card, which for my family might as well be cash. I can buy my groceries, gas and many other daily needs with this. Please stars, issue Walmart gift certificates for us lowly non supernovas.

[Sintax]

Ok, I am convinced through this thread, that Stars has purchased a gift card inventory in bulk, and probably did recieve a discount.

As to the amount of that discount, I would say no more than 20% max. I don't believe Amazon.com would give up that margin. They are one of the few e-tailers that rarely to never offer discounts or promo codes or coupons. Earlier in their existence you could find some 10-15% off an order coupons, but not in recent years.

Anyway, assuming a 10% discount on a $200 gift card, they easily make up the $20 differnce in rake collected for a $200 bonus playthrough which is going to be about 1500 ffp's (and probably closer to $60 in mgr)

[davebreal]

[ QUOTE ]

I think Stars VIP program is bordering excellent. Stars does have a good store... at first glance. If you already have an iPod, a dvd player, a few good monitors and just about every poker book published worth reading then the store is basically worthless. It simply amounts to saving up enought points to spend with the concierge.

[/ QUOTE ]

nice summary. it's pretty clear that the amazon cards were a major loss, and the cash bonus purchases are not offering a good ROI. pretty unfortunate. i'll probably stick with concierge service going forward. tournament tickets and/or ebaying electronics might be good choices for non-supernovas though.

i will add that i was able to purchase $2800 in prepaid gasoline cards via concierge. definitely makes me glad to give pokerstars my business when i can reap rewards like this.