Retailers seek ‘green’ alternative to plastic gift cards
Like millions of Americans, Jessica Hamilton of Pasadena will buy her friends and family a handful of gift cards this holiday season, drawn by their convenience.
Yet Hamilton, who carries reusable bags when she goes shopping, is bothered by the thought of all of that plastic ending up in landfills along with worn-out hotel key cards, credit cards and the like.
In 2012, the global card industry produced 33 billion cards, according to the International Card Manufacturers Assn. Most of those cards contained polyvinyl chloride, a plastic that contains pollutants that are harmful to the environment and is slow to decompose.
“If they had something more eco-friendly, that would make me shop at one place over another,” Hamilton said.
Increasingly, card manufacturers and retailers are listening, offering more alternatives to plastic cards.
High-end grocery store Whole Foods Market Inc. did away with plastic cards in 2011 and replaced them with paper gift cards.
“Generally, at Whole Foods, we like to think green ... but we were producing tons and tons of waste from PVC cards and that wasn’t in line with what we want to do,” said Marushka Bland, gift cards project manager for the Austin, Texas, company.
Last year, Whole Foods launched a gift card during the holiday season made with wood from sustainably managed forests in Europe.
The cards, produced by Colorado-based Sustainable Cards, are made with 30% less energy than plastic cards and are compostable.
Whole Food’s commitment to reducing its environmental impact played a role in the decision to get rid of plastic cards, Bland said, but the change was also an effort to give their customers what they want.
“If one of our customers is environmentally conscious and doesn’t want to give a plastic card, then we love to give our customer the opportunity to make a purchase they can feel good about,” Bland said.
And retailers have excellent reasons to make their customers feel good about gift cards.
Shoppers will buy nearly $30 billion in gift cards this holiday season, spending an average of about $163 on the items, a 4% increase from last year, according to an annual survey sponsored by the National Retail Federation.
Retailers get value out of marketing themselves as “environmentally friendly” through recycling and other programs, said Bob Engle, vice president of biopolymers at Metabolix, a Massachusetts company that produces a bioplastic alternative to the plastic typically used in cards.
But alternative cards have shortcomings.
In 2007, Target began using cards made out of a biodegradable material produced by Metabolix but terminated the deal because of the high price of production.
Although a pound of polyvinyl chloride costs a little over $1, Metabolix’s alternative costs almost $2. And one wooden card made by Sustainable Cards costs 10 cents to 15 cents while a plastic card runs 7 cents to 12 cents for orders of 100,000.
Polyvinyl chloride is also readily available around the world, easy to produce, durable and easily recyclable, said Al Vrancart, an industry adviser and founder of the International Card Manufacturers Assn.
“PVC is a product that’s been around a long time and served us well,” he said.
But the industry, Vrancart said, is attempting to move in a more sustainable direction, adopting eco-friendly standards that, when met, result in a “green” certification for a product.
Before the financial meltdown in 2008, many in the industry were headed in a more sustainable direction, he said, but that movement fizzled as budgets tightened.
The effort is slowly coming back, but has not regained the popularity it once had. Green cards make up less than 1% of the card industry and “card makers only make what the market demands,” he said.
Producers of gift cards from alternative materials are optimistic. They say that their prices are gradually improving and the demand for their product is on the rise.
Sustainable Cards, which also produces hotel key cards and other types of cards, has doubled its revenue every year since 2010, when it began production, said Johan Kaijser, the company’s head of sales. Sustainable Cards expects revenue of $2 million to $3 million this year for the production of 20 million cards, he said.
“We want to show the market that there are alternatives,” Kaijser said.
Sustainable Cards, which also has an operation in Sweden, landed a deal this year to provide the material for the wooden gift cards released by Starbucks.
CPI, a major card maker based in Colorado that produces 300 million cards a year, has worked for years to produce several types of “sustainable cards,” said Barry Mosteller, the company’s director of research and development. But he said it’s difficult to come up with an alternative because companies have varying views on what sustainable means.
“There is no magic bullet today when it comes to green card products,” Mostello said.
Some businesses are also expanding to digital options such as e-cards and mobile phone applications that offer the same function as a gift card.
But Engle is confident that demand for his product will be around for a long time.
“There is a trend to go electronic,” Engle said. “But there is a traditional market where people want to have the physical card to give as a gift.”
Twitter: @James_Barragan
