Why a Gift Card Makes a Great Incentive


A gift card can be a great incentive for any customer. It is a proven fact that consumers using a gift card in store will nearly always end up spending more than the amount that is on the card itself. Discover why that is and how using a gift card incentive can dramatically increase your customer base and business income.

Think about it, if you had a gift card that had $100 on it and you found a great dress or suit for $95, the chances are you would never leave just $5 on the card and walk away. No, you would look for something that was near to $5 in order to get your money’s worth from that card!

That is simply human nature. To many a gift card is free money and leaving any amount on the card unspent is like personally throwing that money away. Even if a shopper cannot find anything they like for $5, they would gladly grab something that is $10 and end up paying the extra $5. In their mind they just got a lovely suit/dress plus that $10 extra item and only spent $5. It almost sounds like a bargain.

Gifts cards work on basic human consumer psychology and they have proven to be a great incentive in enticing customers to spend more than they had intended to.

The concept of free

The profit-increasing value of a gift card also relies on the all-powerful attraction of ‘free’ and the concept of free can induce very powerful emotions and induce even the most sane person to act illogically.

A gift card recipient instantly sees it as free clothes, free tools or whatever they can purchase with the card and that often leads to irrational behavior, which benefits the store.

If a customer was to spend $100 of their own money in these days of financial hardship, they would rarely be tempted to opt for that extended insurance or additional accessory set. However, the irrational gift card user thinks they have spent nothing and therefore spending another $30 on a warranty or accessory still leaves them $70 in profit!

This is the power of free and to some extent human greed, and shows why a gift card can encourage customers to spend more. Gift card incentives are big business and are a proven method of generating extra income that could be missed, without the use of this psychological trigger technique.