The usage of gift cards in exchange for cash seems like a simple idea. Gift cards, on the other hand, have evolved into a distinct form of money with their own advantages and tendencies. Here are three ways that gift cards outperform cash and explain why they may be viewed as a distinct form of payment.
Gift cards encourage excessive spending
The 2021 Prepaid Consumer Insight Study by First Data found that when customers use gift cards at stores, they spend an average of $40 more than the value of the card. Spending more results in higher levels of consumer satisfaction and creates value for the retailer. The retailer will understand that customers who pay with gift cards are more valuable than those who spend cash. Gift cards now offer a new kind of cash that may be used outside of B2C retail interactions as well.
Encourage workers with rewards
Another great incentive for employees is a gift card. 69% of workers said they would be interested in receiving a gift card as a reward for going above and beyond their job responsibilities or for a job well done, demonstrating the effectiveness of using gift cards as a motivator. To get the most motivation and output out of the implementation of an employee incentive program, it is crucial to understand how employee incentives function.
Self-Gifting Increases Sales
Gifting comes to mind when you think of gift cards. It’s in the name. However, the First Data analysis found that 62% of millennials reported giving themselves gift cards rather than purchasing them for other people. When you consider how fascinated millennials are with self-care, this is not surprising. They think it’s important to treat yourself occasionally, whether it’s to a gourmet meal or a trip to the nail salon. The number of online “self-care” interactions has quadrupled, claims Millennial Marketing. So why not use a self-gift (card) to practice self-care?
The strength of gift cards as currency is persuasive when you consider the power of self-gifting and the overspending seen when using gift cards to make purchases.
Gift cards have power, whether in a consumer setting or a business setting between employers and employees. Understanding how gift cards can work in your favor allows businesses, retailers and consumers, and employees to use the currency in their favor.