Traditional Gift cards are not ideal
Gift cards are a $160-billion industry in the United States, according to Gartner’s CEB Tower Group. Their proliferation at grocery stores, pharmacies, and other stores make them difficult to ignore and easy to grab in a pinch.
However, just because fixed-price gift cards are easy and accessible does not mean that they are a good thing for gift givers or gift buyers. In many ways, the gift card industry does not reflect our the way we live our lives today and feels like a holdover from a previous era of retail.
Like a lot of things in the world right now, gift cards are ready to change for the better. They feel like a relic from a bygone era at a time when Uber has transformed the way we get around and Airbnb is giving the hotel business a run for its money.
Here are some more reasons why it’s time to rethink the way we buy and give gift cards:
1) The retailer is the focus, not the consumer
Look around your home or your office and you’ll probably find at least one gift card that’s lying around either fully or partially unspent. In fact, the Washington Post reports that more than $1 billion in gift cards go unspent each year, and nearly 30 percent of gift cards received are never spent at all.
While you might not think much about letting $20 or $50 on the table, every dollar that you do not spend goes back into the pockets of the retailers that issued the cards. This is one reason why businesses love gift cards much and why they want to make it as easy possible for people to get their hands on them.
While companies like Raise and Cardpool allow users to sell unwanted gift cards, doing so requires creating accounts on those sites and selling them for less than face value. Sure, you get some money back in your pocket, but you miss out on the full potential of the gift by selling it at a loss.
Rather than dealing with unspent gift cards after they are already purchased, there’s an opportunity to change card-buying process to increase the likelihood that someone receives a gift card they will actually spend.
2) Difficult (and costly) decisions
Not every gift card collects dust in the back of a drawer. There are times when you get a gift card that you really like and are eager to get out and spend it, only to get to the cash register or the end of a meal and realize that you’ve spent more than what’s on the card.
In the restaurant industry alone, about 45 percent of gift card holders spend more than their card’s value on a meal, according to a survey conducted by Toast POS. This creates a sense of awkwardness at the table as you try to figure out what to order on the menu that will allow you to stay within the gift card amount and how much to tip based on how much you spent and how much was covered by the gift card.
Anxiety and awkwardness? That does not sound like an ideal dinner out on someone else’s dime.
In the retail sector, it’s difficult to make the price Of clothing and other items line up with the exact amounts specified on fixed-value gift cards. You might want to buy a pair of pants and a shirt, but only have enough on your gift card to cover the full cost of one item. Do you put one thing back or fork over the rest of the money to buy both? With a smarter gift card system, you would not need to choose at all.
No matter what the details, using a gift card often ends up costing the recipient money, which is not the desired outcome for any card giver.
3) Impersonal in a hyper-personalized era
From music to clothes to beauty products, we have the ability to customize just about everything in our lives today. So why should you settle for giving someone a generic gift card?
We have access to more data than ever about people and can have the opportunity to customize gift cards to their wants and needs. Rather than going out of your way to spend a gift card at a store or restaurant that you never go to, you can seamlessly incorporate a gift card into your daily life.
With a little more effort, you can show anyone in your life that you care enough to do more than give them a generic amount of money to be spent at a big-box store or anonymous sites like Amazon or iTunes.
Whether you are buying a gift card for a friend, loved one, or colleague, chances are you know enough about them to develop a personalized gift. They will appreciate the thought that went into it rather than trying to decide on their own how to spend a lump sum of money at a store or restaurant.
4) Consumers value experiences, not goods
More and more, our society values experiences over material goods — which stands in direct opposition to the gift card industry. Some experiential gift cards already exist, like a day at the spa or a vacation package, but there’s an opportunity to create many more.
A long-held selling point for gift cards is that they let the recipient buy whatever they want. This might have been a benefit 10 or 15 years ago, but does not hold up in today’s culture. People are busy and do not have time to think about how they are going to spend a generic gift card.
Instead, consumers value curated experiences that align with their values while offering the opportunity to move a little outside of their comfort zone and try something new. Entire companies and industries are thriving around this concept, and there’s no reason gift cards can’t do the same.
At the end of the day, a gift recipient will remember an experience much more than they will a physical product. They can take photos to share with you and the rest of their social network and feel an emotional connection to the gift that they received.
A new way to gift
Ready to change the way you give gift? Consider Generous Experience Cards before you pick up another generic card from a store shelf. The platform allows you to gift experiences and avoid the hassles that come with fixed-price cards.
You can rest assured knowing that the money you spend on a gift card will be utilized to its full potential and that your recipient will create lasting memories through their gifted experience.