The Economics of Gift Cards: Benefits and Pitfalls
Gift cards are not just a simple present choice; they're a significant economic force in the retail industry. These handy pieces play a crucial role for both consumers and businesses, influencing financial behaviors and retail strategies. However, while they offer myriad benefits, they also come with potential pitfalls that both consumers and retailers need to navigate. For consumers, gift cards offer the advantage of choice and convenience. They save time for the gift-giver and provide the receiver with the flexibility to select what they genuinely need or desire. Moreover, gift cards are an excellent way for individuals to manage personal budgets, often serving as a tool for controlled spending within specific brands or stores. From a retailer's perspective, gift cards represent a vital component of revenue streams. They often bring in new customers who may not have visited the store otherwise. Additionally, consumers typically spend more than the card's value, lead...