Gift Cards & Bank Account Balances

Gift cards are a great way to give a friend or family member money without actually just giving them cash. However, some people use gift cards on a frequent basis to pay for the products and services that they regularly enjoy. There is nothing wrong with this in theory; gift cards are very convenient for regular purchases at the same establishment. The real issue is when some people believe they are saving a lot of money by using gift cards. There are several reasons for this, and most of them stem from an all-to-common financial weapon: behavioral psychology.

A gift card can easily make you spend more than you’d originally intended, according to a study commissioned by First Data. The study of 1000 British shoppers found that 74% of shoppers spent an average of $54 beyond the gift card’s original value. 34% of respondents reported that gift cards made them check out stores that they hadn’t previously considered. Shoppers in the US are just marginally worse when it comes to gift cards, spending an average of $59 beyond the card’s original value.

So, when you next receive a gift card, you will likely want to use it, as you obviously should. Just remember why so many businesses offer them: they are the perfect tool to get people into the store when they otherwise wouldn’t shop there. They are also the best way to get shoppers to spend more money than they had originally intended.

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1 year ago