LEGO Gifts with Purchase: A blessing or a curse?

Everybody likes a freebie, right?  Of course - who wouldn't?  But sometimes it's not as simple as "Here - have some free stuff."  Sometimes there are strings attached.  I talk of nothing but the Lego Gift with Purchase, or GWP as they're often referred to, and they come in a number of varieties.

But first, let's consider why Lego offer GWPs.  Lego is a popular product, and you can purchase it from many retailers, both physical and online.  The LEGO group offer both of these options, with a number of official Lego stores around the globe, and official Lego websites in a number of territories.  And one thing you can bank on with both of these 'official' channels is that the products are going to be full price. (1)

Now. A Lego set will have two prices.  First there's the 'trade' price, which is the figure that the Lego Group will sell to a retailer like John Lewis (2), and the RRP, or Recommended Retail Price which is the price that you'll see on the shelf in the Lego Store and on Lego online, and which many retailers also use.  Let's say that Lego set X has a retail price of £100.  Chances are a major retailer will be paying £50 for that set. (3)  So if they sell that £100 set, then Lego have received £50 and the retailer has received £50.  Both need to take their costs out of their respective £50, but unless the businesses are being run by muppets, then both companies should make a profit.

But before an eager child ever got their sticky mitts on the set, Lego had already lost out on a potential £50 by selling to the retailer at the trade price. I'm going to pluck a number out of thin air here, and say that the Lego Group's manufacturing, distribution, advertising and whatnot costs come to £30 for that set.  So by selling through the retailer, they've made £20 profit on a £100 item.

Consider now, that same child with the same sticky mitts, picking that same £100 set up in a LEGO store...  

Costs are still exactly the same, at our assumed £30, but if they sell it for £100, then that's £70 profit as opposed to £20 profit.

Let's pay a visit to a typical Lego Group boardroom, where some execs are sitting round a beautiful Scandinavian table:

_______________

Exec 1: "Ok. Moving on to the next agenda point.  Do we prefer selling our products for a small profit or for a massive profit?  All those in favour of massive profits?"

All other Execs raise their hands.

_______________

It is therefore in the Lego Group's interest to shift as many units through their own stores (and websites) as possible.  Sure, they're not going to turn down business from other retailers - getting them to do the heavy lifting for a modest profit is always going to be welcome - but a Lego Store sale is a profitable sale.  But if Joe Customer and Josephine AFOL can potentially get that set at a slight discount elsewhere, why would they pay full price in the Lego Store?

Enter the Gift With Purchase!

"Hey little Lego fan.  Look what we've got!  It's a Lego set that you can't get anywhere else!"

A GWP is usually a small set, rarely more than 100 pieces  But put it in an official box and say it can't be bought anywhere else, and that's like catnip to a Lego fan.  The value of the pieces is probably no more than a pound or two, but that official packaging, combined with exclusivity, means that common sense goes out of the window...

Head:  That £200 set is on offer down the road for £160.

Heart:  Yes, but there's an exclusive GWP if I buy it at the Lego store.

Head:  But that GWP is probably worth about £4.00, and we could save £40!

Heart:  Hush!  Exclusssssive GWP!  We must have the precious!

Cue large profit for the Lego Group.

As mentioned, GWP's come in a variety of flavours.  The main ones are:

A) Spend some money, get a thing.

Spend over the advertised threshold on any Lego products (4) and get a free set. This is fine.  There are no catches, other than the minimum spend, and you get the thing.  Assuming that you really, really want the freebie, it's not too difficult for the typical Lego fan to find something they want to buy.  However, the spending threshold has, of late, started to rise at an alarming rate.  We'll look at this more in a moment.

B) Spend some money on specified themes, get a thing.

Spend over the offer threshold on one or more predetermined themes and you get the gift.  This is where the problems start to creep in.  Whereas with (A) you can buy anything in the store and - provided you meet the qualifying spend - you get the item, now you're restricted in what you can buy.  And what if it's a theme or themes that you don't collect / have an interest in?  Well then you've got a problem.  The only upside to this is that often the GWP is linked to the qualifying themes, so if you don't collect, say, Friends, then you're probably not going to be interested in a Friends GWP.

C) Buy a specific set, get a thing.

Often linked to the more expensive sets, these promo items are often designed to tempt those who may be wavering or, more likely, waiting for the cost of the set in question to come down.  Take, for example, the recent 10307 Eiffel Tower.  At £554.99 it's what might be charitably called a considered purchase.  Add the fact that you'll need to find enough space to display a set that's nearly five feet tall and it's understandable that many potential purchasers were intent on keeping their purses and wallets firmly shut until a customer-friendly retailer hopefully offered the set at a discount a few months down the line.  But wait!  What's this?  40579 Eiffel's Apartment is available as a GWP if you buy now!  Only available for a limited time.  Sounds like a whole load of purses and wallets being opened!

Image courtesy of Brickset

Eiffel's Apartment - only 228 pieces, but it will have shifted a few Eiffel Towers

But at the end of the day, these are all free sets, right?  You pay your money, you get the thing you wanted, and on top of that you get a extra item - occasionally multiple items as many freebies 'stack'. (5)  Yes, this is true, but the Lego Group are a canny bunch, and they know just which bells to ring to get an AFOL salivating like one of Pavlov's dogs.  And with Lego prices increasing, GWPs coming along with alarming regularity and FOMO being a serious problem for the Lego collector, it's becoming increasingly difficult and stressful, if not impossible, to pick up all the GWPs that you might want unless your surname is Rockefeller.

As an example, a number of GWPs were announced in January, one of which was titled 'Houses of the World 1'.  It's a microscale build of a Central American house and it looks great.  Definitely the sort of thing that I'd like to pick up.  However, problem one:  The threshold was £220!!!!  Problem two, it was available in January when, like most people, I wasn't exactly flush for cash, and problem three, the '1' at the end suggested that this was going to be part of a set.

Image courtesy of Brickset

40583, Houses of the World 1: £220 is a pretty high purchase threshold.  Shame.

At present we believe that there will be four in the series which means that if you want the set, you're looking at a spend of nearly £900!  Which is crazy.  For many people, a £200+ spend is a once-a-year blowout, not 'I'll drop that every three months.'  Naturally, the cry that goes up whenever this sort of thing happens is "Why can't Lego just sell us the set?  Why does it have to be a GWP?"

May I remind you about the profit discussion we had earlier?

So to return to the original question, are GWPs a blessing or a curse?  Well if they happen to coincide with a planned and budgeted-for purchase, then fantastic!  You just got an extra set, free and for gratis.  But if you're looking at a GWP and you're thinking "What do I need to buy in order to get that?" then I'd suggest you walk away and maybe look at the aftermarket instead.

Case in point. January 1st is the traditional release date of that year's new Modular building, and in 2022 it was 10297 Boutique Hotel.  Plenty of people rushed to buy the set as happens every year.  Then, about a month later, up pops a GWP: 40532 Vintage Taxi.  Nobody ever actually said that the Taxi was designed to go with the Hotel, but many in the community made that leap, and suddenly everyone who had pulled the trigger on day one felt a bit miffed that those who waited were rewarded for their patience.

Image courtesy of Brickset

The Vintage Taxi.  Not technically designed to fit with the Boutique Hotel, but the Lego Group don't mind if you make that assumption.

I'd already decided to wait as, because I still retain my staff discount from John Lewis, I know that the Modulars tend to arrive in JL in April and I can save a significant amount of money.  So instead, I tracked down a mint copy of the Taxi from the excellent Brick-A-Brac web store for a not-unreasonable £26.99.  Ok, it wasn't free, but taking into account what I saved, I was marginally still up on the deal.

With many retailers offering sizeable discounts if you're prepared to be patient, by keeping a watchful eye out, sometimes you can pick up a GWP that you'd set your heart on without paying through the nose.  

I can't see the Lego Group ever stopping the idea of a GWP, although times are changing.  Now, exclusive sets pop up as a 'VIP reward' on the website.  You can currently exchange 2,700 VIP points for the World of Wonders set, which contains four microscale builds of famous landmarks: The Great Wall of China, the Taj Mahal, the Parthenon and the Al-Khazneh Temple at Petra.  All well and good, but you obviously you still have to have earned those points, by spending in the Lego store or on the website.  At current rates, 2,700 requires a spend of £337.50!  Suddenly, a £220 threshold doesn't look so bad.  Oh, and by the way, if you do redeem those points, it gets you a voucher which you can redeem - within 60 days - on your next lego.com purchase.  So you have to spend even more, just to get your free set!

Image courtesy of Brickset

World of Wonders.  Yours for just £337.50.  Plus an additional purchase.

Suddenly, these GWPs aren't looking quite as 'free' as you might have originally thought. And it makes you wonder just who runs the Lego promotional programme.  Machiavelli?

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1. Ok, occasionally the Lego Group will reduce the price of sets, but examples of this are few and far between.  If you want to find Lego sets on offer, then you need to look elsewhere.  In the UK, John Lewis, Argos and Zavvi are your friends.  They regularly offer discounts, or 3 for 2 deals that can make an overpriced set affordable, and a reasonably priced set a bargain.  Keep an eye on the Brick Fanatics website, who are great at highlighting offers like this.

2. The price that a retailer will buy at can vary.  Bob's General Store, which offers maybe three different Lego sets will almost certainly be paying more for their stock than someone like John Lewis, who will be buying - and selling - tens of thousands, probably hundreds of thousands of Lego sets each year.  That sort of throughput means you can negotiate a better discount.

3. I should point out that these numbers are for illustrative purposes only - I've only got a vague idea of what a major retailer pays for Lego.  It's been a couple of years since I worked for John Lewis and things change rapidly in retail.

4. Exclusions occasionally apply, but by and large, most Lego products qualify for these sort of GWPs.

5. For example, there may be concurrent offers running - spend £50 get A. Spend £75, get B. Spend £200, get C.  But if you spend £200 you don't get just C, but A and B too.  It's nice when that happens.