Because Everyone Needs One Once and Awhile
There's a new, giant gift card display, professionally referred to as a "gift card mall", at the front door of my grocery store. It's blocking my beeline to the pasta aisle. I'm not surprised, though, since gift cards are the most profitable square foot of selling space at many retail sites.
I don't like giving gift cards. Although there are exceptions, to me they seem impersonal.
This new giant display got me thinking about gift cards, and following are a few ponderings you may have never thought about.
Gift cards are far more advantageous to the retailer than the consumer. Think about the actual process of a gift card. We are handing over cash money, or even worse, using interest-charging credit, to purchase a piece of plastic, covered in marketing-genius graphics, with the hopes that one day someone will actually buy something for the money you have already paid. Now, answer this. How often have you lost a gift card, or gotten to a store and realized your gift card is somewhere at home? Why are we not satisfied with giving actual money? How often have you lost real, green "In God We Trust" money? Probably not too often. Apparently, because a gift card actually says happy birthday, thank you, or happy holidays on the front of it and looks festive, it appears to be a much more personal than actual money. Is it a wolf in sheep's clothing?
You'll be astounded to know that, collectively, Americans are sitting on almost 30 billion dollars of unredeemed gift cards, with another 90 billion dollars worth of gift cards expected to be purchased this year. Wow! What a great deal for the stores and restaurants who get the cash up front, and then may never actually have to pony up any goods for the sale, except for the plastic gift card, of course. Plus, statistics have shown that around 55 percent of gift card recipients need more than one trip to deplete the value of their card, and most gift cardholders will spend, on average, 20 percent more than their card's initial value.
Here's another interesting thought process I find fascinating: Consumers actually believe that gift cards give their friends and family the freedom to pick out their own gift, thus getting what they really want or need. This is sort of true, but in a very limited way. The gift card giver still has control over the purchase by choosing and committing to a single retailer or restaurant. It would seem that a Wal-mart or Target card is a very flexible option, affording the gift card recipient an across-the-board variety of stuff to choose from, but nothing is more flexible than cash. Last time I checked, it's still accepted almost everywhere you go. The mere fact that there is 30 billion dollars worth of unredeemed gift cards proves to me that people don't fully appreciate the value of a gift card like they do money.
I know what you're thinking, "But they might not actually go buy themselves something if I just give them cash." Isn't that okay? Don't you truly want them to get what they want? Or, do you want them to like what you like? Must they really eat at P.F. Changs or choose their gift at Pottery Barn? Or is it alright if they eat at Five-Guys and spend the rest on chewing gum? Do you get my drift.could there be a little power play going on in the freedom of choice gift card boom?
I am fully aware that all you are trying to do is please someone at Christmastime. I'm not trying to get you to stop buying gift cards, I'm just amazed at how we can drift into things sometimes so irreverently, myself included. However, I do have one plea.if you receive a gift card, please use it. Imagine what that 30 billion dollar stack of unredeemed gift cards could have done for our economy and the job market. These cards are already paid for; how much easier can it get? For Heaven's sake... Go shop!