Early Gift Card Redemption Could Help Stores Grow Business Faster

Abstract

Increasingly more and more stores are offering their own gift cards as part of their services marketing repertoire. There is evidence, however, that a significant number of prepaid gift cards remain unredeemed for considerable periods. This study identifies that marketing activities, like store promotions, based on an understanding of consumer purchase involvement, can facilitate quicker redemption of gift vouchers. The results of this study suggest that store promotions facilitate moving gift card recipients from a state of volition control to elaborating on the potential of adding value to the gift vouchers, inevitably bringing forward the hierarchy of effects that expedite consumers becoming regular store patrons who gift the store's vouchers to others. Consequent increase of the churn rate of gift cards will result in higher return on stock investment than revenue, from sale of gift cards, used as “floats.”