Why You Always Spend More Than the Gift Card Value
When you use gift cards, does the total amount of your purchases usually exceed the cash value of the card? Do you usually end up paying cash out of your own pocket in order to cover the remainder of the balance? Well, you certainly aren’t alone. Studies have shown that the majority of the people with gift cards spend more than the card’s value when they are shopping. There may be a few different reasons for this.
The Idea of Free Money
Most people who receive gift cards don’t actually see it as their money – they see it as “free money.” Since they believe that it’s free money, they don’t worry as much about how they spend it. This sense of financial freedom sometimes even prompts them to purchase more than the gifted amount.
Money Is No Object
Since many consumers see gift cards as free money, they are often a little more lax in how they spend it. For instance, they may not hover around the sales racks that they are normally glued to, and they may not sniff out the money saving deals that they would normally seek. After all, it’s not really their money that they’re spending.
This mentality often leads to them spending their gift cards carelessly or with little thought. For instance, they may buy a $55 shirt, when they normally wouldn’t spend over $20 on the same type of item.
Many consumers, especially consumers who are on budgets or consumers with families, often feel guilty if they spend money on themselves or for frivolous items. Gift cards, however, squelch this guilt. Because they see it as extra, unexpected money, they are more likely to spoil themselves, so to speak. For example, instead of spending $55 of their own money, they see it as spending only $5 of their own money $50 of “free money”.
Waste Not, Want Not
For many consumers, leaving a small balance on a gift card may be perceived as wasteful, even if it just amounts to a few cents. Instead of leaving even a small amount of money on their gift cards, most consumers will try to wipe out the entire amount to ensure that they get all of their money. This often results in them picking up a small item that will do just that. For example, if you are going to purchase $45 worth of merchandise with a $50 gift card, that will leave an extra $5 left on the card. In order to wipe out the balance of the card, you may go in search of an item that costs at least five dollars. More often than not, however, you will often pick up something that costs over $5, leaving you to pay the remainder of the balance out of your own pocket.