Well, maybe not.
In 2024, worldwide gift card sales will pass a trillion dollars for the first time.
Itâs a good grift.
Surveys show that the buyer spends about 21% less per gift than they do when they actually buy something, while the recipients of the gift find themselves spending 61% more than the value of the card when they actually redeem it for money. Most of all, the retailer comes out aheadâfar fewer returns, lots of never redeemed cards, better cash flow and new customer accounts when people do show up to eventually buy.
In the current system, the recipient loses. They get a smaller gift, they often spend more money than the gift was for, theyâre stuck with the store the giver chose (which is the only thing they actually chose) and thereâs very little in the way of thoughtfulness or connection involved.
In essence, holidays become a circle of people, handing the same wad of cash around, except instead of ending up with the cash, they then spend even more money when they go shopping tomorrow.
Every cultural occasion and holiday has been commercialized by retailers in search of more. And the insatiable desire to consume is contagious, and gift giving is inherently viral, since you need to have someone to give the gift to. As a result, weâve built a system thatâs expensive and not particularly good at what it sets out to do.
Given the size and profitability of the cards, Iâm surprised that theyâre not a much better experience.
What might a better process look like?
- Go the the online store, find an item you think a friend would like. Instead of ordering it, choose GIFT CARD.
- The store asks you if youâd like to purchase a charitable donation add on as well.
- Now, the site produces a unique digital gift card, with a picture of the item and a link to redeem it. The QR code it generates also includes a thank you from the charity.
- Your friend simply has to scan the lovely page you printed out (or emailed them) to go to the redeem page. Once there, they can choose to get the item you carefully picked out, choose something else or easily get cash back.
- And so, they get delighted three times: When they get the thoughtful card. When they go to the site and discover they can get the cash back. And when the item arrives in the post and they unwrap it.
Now the thought really does count. This is a low hassle, high delight way to show someone you were thinking of them. If stores used their persuasive powers, it could also raise billions for worthy causes along the way.
Either that, or you could give cash and save everyone a lot of trouble.
