I Perdict on 16 June 2008
| bumidan said: Yes, Walmart is a big company and has a lot of money. But that doesn't change the fact, that based on their FINANCIALS, they are a general retailer that has an operating margin of 6% and a profit margin of 3%. So for every $100 of products they sell, they only make 3% profit. You can argue that other items have higher profit margins - BUT AS A COMPANY, they ONLY make 3%. Therefore, a gift card of $100 that you can spend ON ANYTHING the company sells, Walmart HAS to assume that it would cost them $97 - because they only make $3 out of every $100 in revenue. As a business, you can not assume that the $100 gift card will only be spent on higher margin items such as slushies or gumballs, etc. because (i think) there are no restrictions on how the gift card can be spent. |
I didn't think someone would spend a gift card on gumballs. I thought you guesstamated on the 3% number from other retailers and such
