Gift cards seem like a basic concept, used in place of cash. However, gift cards have become their own currency, with their own set of trends and advantages. Here are three ways gift cards are more powerful than cash and why they could be considered their own type of currency.
1. Gift cards lead to overspending.
According to First Data’s 2017 Prepaid Consumer Insight Study, when consumers take a gift card into a retailer they spend an average of $40 more than the value of the gift card. Overspending leads to greater satisfaction for the consumer and adds value for the retailer. It indicates to the retailer that consumers who pay with gift cards are more valuable than consumers who pay out of pocket. This creates a new type of currency that gift cards offer both within a B2C retail interaction and beyond.
2. Motivate employees with incentives.
Gift cards also make a compelling employee incentive reward. Using gift cards as a motivator is effective with 69% of employees saying 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. It is important to understand what employee incentives work to ensure maximum motivation and productivity results from the introduction of an employee incentive program.
3. Self-Gifting Boosts Sales Further.
When you think of gift cards, you think of gifting. It’s in the name. However, according to the First Data study, 62% of millennials reporting self-gifting cards rather than buying gift cards for others. This isn’t surprising when you consider how obsessed millennials are with self-care. They believe in treating themselves, whether it’s at a boutique fitness class, at a fancy restaurant or at the nail salon. According to Millennial Marketing, the number of conversations online around “self-care” has octupled. So, why not self-care with a self-gift (card)?
If you combine the power of self-gifting with the overspending observed when shopping with gift cards, the power of gift cards as currency is compelling.
Gift cards have power, whether in a consumer setting or in a business setting between employers and employees. Understanding how gift cards can work in your favor allows business, retailers and consumers and employees to use the currency in their favor.
Interested in learning more about how to incorporate gift cards into your 2018 employee strategy? Contact us today.