Gift Cards: The Gift of the Year?
John Paul Brissette ’25
Have you finished your Christmas shopping yet? You’re running out of time but you’re not alone. The Saturday before Christmas isn’t just any ordinary Saturday — it has been dubbed SUPER SATURDAY.
Each year Super Saturday has one of the highest levels of economic output in the United States, second only to Black Friday. The day targets those last-minute shoppers who are in a rush to find the perfect gifts. One of the most popular gifts are gift cards. According to a Statista poll the convenience of a gift that allows the receiver to pick out what they want saw a gigantic increase in 2022, when 64 percent of American shoppers said they would be buying gift cards during the holiday season as gifts. In addition, 90 percent said that they would be happy to receive one
Dan Horne, Ph.D., professor of marketing and department chair of the marketing department at PCSB. Shared with us his expertise as we asked him about the state of the gift card market this holiday season.
You may have noticed that companies have begun to incentivize shoppers to encourage them to buy more cards. “Buy 100 dollars in gift cards and get a $25 bonus card” offers can be found frequently. “Gift card sales are very profitable and retailers and restaurants want that profitability and they are willing to use some pretty aggressive sales promotions to get them,” Horne said. So, maybe while looking for those last-minute gifts, you should consider a gift card for someone else and enjoy a little something for yourself with a bonus card as well.
How does one determine what the perfect gift is? Horne’s explanation of deadweight loss might make your shopping just a little bit easier.
Deadweight loss is the difference between the value someone receives from a gift and the value they would have received if the gift was absolutely perfect. “Sometimes a giver hits the bullseye and there is no loss, but most often they are slightly too wildly off target because everyone has different tastes,” Horne said. “If you know enough to get the retailer right, then you can minimize the loss by letting the recipient make the final choice. And because the giver shifts the ultimate choice to the recipient, it is easier and more convenient for the giver.”
Often when people consider gift cards they think just that they are easy — a quick gift that most people enjoy but, has given gift cards become less personal.We live in a digital age and many gift cards can be given via email rather than tucked in a Christmas card or wrapped up in a bow. Digital gift cards provide one promising asset. “ gifts making physical distance irrelevant,” Horne said. When searching for a gift for someone Digital gift cards remove the physicality and alone you give to those who lives miles away or you won’t see in time for the holidays, physical distance is one less hoops to jump through.
Gift cards also serve an economic benefit to society post-holiday season. Studies show that most people use their gift cards they receive on Christmas within the first five weeks of the new year. “This makes January a fairly strong month for retail. But there are many crafty shoppers who wait until the real markdown hit before using their cards,” Horne said. Capitalize on those sales post-Christmas and use your newly acquired gift cards to get the best deals. Stores are happy that the gift cards get you in the door and hopefully their items entice you to spend far more than what was on your card.
Merry Christmas, and we hope you find some gift cards underneath your tree this holiday season.
