Gift cards are promoted everywhere this holiday season– in ads, checkout counters and in-store signs. But in case you still miss it, your eyes will naturally gravitate to the colorful free standing display/kiosks in stores near you. And as if the mere convenience of gift cards isn’t motivating enough (for those too lazy to shop for an actual gift), grocery chains are offering incentives to get people to buy them in bulk – i.e., get a $20 grocery coupon with a $200 gift card purchase.
The problem I have with gift cards is that it’s impersonal. So impersonal in fact that frankly, I don’t remember who gave them to me. That’s probably because I ended up using the gift card on toilet papers or some household stuff – see, not so noteworthy.
Don’t get me wrong. . . I’m also occasionally drawn to the guilty pleasure of plastic money.
So I tried to make sense of the whole psychology behind gift card buying and came up with somewhat a logical rationale:
Say someone is willing to spend $20 on a gift, but it would take her half an hour to shop for it at an opportunity cost of $30 per half hour, so the overall cost would be $50. So if she gets a $40 gift card instead, she will be saving $10. She’s happy and the recipient scored. It’s a win-win situation, no?
Since we are on the subject of gift cards, it dawned on me that manufacturers should create their own gift cards. For example, General Mills could offer a $50 gift card for all General Mills products. This could be sold at any grocery chains and the stores have the discretion of discounting it. This could eventually replace temporary price reduction (TPR) or even coupons – but it does more – create brand loyalty! Sure, they just have to figure out the logistics at checkout – minor details. . .
How about a gift card for the cooking enthusiasts? Suppose you can give someone a $50 gift card to make a gourmet seafood dinner with recipe on the back – qualified items would include all items in the recipe and even a bottle of wine! Not so impersonal anymore, is it? How about for baking, picnics, etc.
So in the spirit of this holiday season, let’s try not to go overboard on gift cards – give some thoughts to the gifts you are giving and make it memorable.