Frankly, I don’t understand why people buy gift cards. I understand why they give them, but not why they buy them.
Gift cards are given because giving the card, instead of cash, shows that you spent some time and effort thinking about the gift. The selection of which store can even indicate that you know a little something about the recipient. I tend to receive Barnes & Noble cards, for example.
What’s puzzling is why people buy gift cards. Many entail fees, declining value over time, and expiration dates. Is the benefit of a good impression sufficient to cover these additional costs?
Tags: money economics