Greeting Card SCAM! How to Save $6 (Or More) on Greeting Cards -- and Defeat the Greeting Card Industry Once and For All

Why are greeting cards so ridiculously expensive?

It's hard not to think about the incredibly fat and juicy profit margins of these little folded pieces of paper when you find Mother's Day, graduation and birthday cards priced at $4.99, $6.99, and even $8.99 in your local suburban grocery or drug store. Sure, some have glitter or cute ribbons on them. And bad poetry. But the bottom line is this: greeting cards are one of the most profitable products in modern retailing.

And long term readers of this blog know why: it has everything to do with competition. Or the lack thereof.

While there are plenty of items in our grocery stores sold at fair prices and reasonable markups, there are also certain items sold at unfair prices under surprisingly limited competition. Many branded/advertised foods, the dreaded spice aisle, and of course greeting cards are all good examples of non-competitive submarkets in the grocery/retail world.

Two companies dominate the greeting card aisle, Hallmark and American Greetings, making it one of the least-competitive segments of all of retail. Worse, when consumers need a card for Mother's Day or an almost-forgotten anniversary card for a spouse, they don't care that much about the card's price. Typically, they just need to get the card and get on with their day.

An economist would call this a non-competitive market with minimal price sensitivity. An investor like Warren Buffett would call this a wonderful business,[1] because in markets like these companies can actually raise prices, every year, little by little, and consumers just passively keep buying cards like they always do.

There may appear to be thousands of cards to choose from, the choice is illusory. The market and its egregious prices are under complete duopoly control. And that's why you can hardly find a card for less than $4.99 any more.

Just to focus our attention here: for $4.99 you can buy a paperback book. Or five pounds of pasta. Or three dozen eggs. Or three pounds of lentils! Many of Casual Kitchen's most popular laughably cheap recipes cost less than this.

Looking downfield a little bit, I wonder what the consumer reaction will be to the first basic greeting card that exceeds the $10 price point? It's coming. And here's something really mortifying: at the rate card prices are currently compounding, we could easily be paying $20 for greeting cards in a decade, give or take. [2]

Which brings us to a question: how high does the price of a greeting card have to go before it becomes... insulting? Or even condescending? As in "We, the greeting card industry, have so little regard for you consumers that we expect you to mindlessly pay 60,000% markups for a folded card."

Don't misunderstand: I have no problem paying money for a gift card. But I have a huge problem paying sums of money that are ridiculously divorced from the value we receive from that expenditure. As an empowered consumer, you should too.

So, what do we do? Well, as in many consumer empowerment situations, the answer is "it depends." But a good starting point is to stop using our typical buying patterns. Clearly, the greeting card cabal can easily prey on us if we seek to satisfy our greeting card "needs" the way we always have.

One solution we know won't work: going to another retailer. Remember the simple technique of going to a local ethnic grocery store to find more reasonably-priced spices? This tactic, which worked so well to subvert the non-competitive grocery store spice aisle, isn't effective against the anti-competitive greeting card industry. They've pretty much locked up control of all of the shelf space at all retailers, everywhere.

Which takes us to a more elegant solution, something we might call a modified "don't want it!" technique. Rather than submitting to the greeting card cabal, and paying their prices on their cards, screw 'em. I'm playing this game on my own (much more fun) terms, by making my own cards.

So, for Laura's birthday, this was this year's card:

I muffed the ice cream cone, but that's an exact likeness of Laura.

Sure, we save a little money. But more importantly, Laura LOVED it. She thought this card was hilarious, adorable even. We both got a huge laugh out of it. And it was free. FREE. [3]

And if I can do this with my pitiful artistic ability, you can do better.

Here's the broader takeaway for anyone interested in consumer empowerment: in any anti-competitive marketplace where prices are way out of line with the value we receive, don't buy. Don't be so damn obedient. Figure out another way. Play chess.

[1] Lamentably, American Greetings and Hallmark are both privately held. Recall elsewhere in Casual Kitchen where we discussed how easy it is to self-fund many of your consumer products purchases by investing in the stock of the company and receiving dividend payments. That won't work here unfortunately.

[2] Don't laugh, hear my math: Assume a $7.99 card and imagine the greeting card cabal gradually raises prices at an average 8% annual rate, consistent with recent pricing activity. In just 12 years, that $7.99 card will have compounded to $20.12. It's coming.

[3] Okay, I lied. It wasn't quite free: the cost was technically 1 sheet of standard copy paper at $7.49 per 500 sheets, or about 1.5c. Thus I provided Laura with an amusing birthday card for less than one 300th of the price of a standard $4.99 greeting card.


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Anonymous said...

While I agree that making your own it the best way to go, Trader Joe’s sells great cards for $1. Also at any Dollar Store you ca get for 2 for $1.

Marcia said...

I love greeting cards. Generally, we tend to make cards (mostly it's my kids making cards for their friends). For adults, when we send cards (which is super rare), I use blank cards from artists that I like. Purchased online.

People send us storebought cards. They can be pricey, but I find many of them funny and enjoyable. My MIL, in particular, has an affinity for funny cards that play music. My six year old STILL loves to listen to the last 6 years' worth of cards. I'd say we got her money's worth.