Tips to avoid unwise gift card spending
Before rushing to spend the gift cards you received at Christmas, think about how to make them work best for you.
A November study from commerce-technology firm First Data showed the average consumer spent $38 more than the value on their gift card, up $10 from 2016.
That’s not surprising, said James Roberts, professor of marketing at Baylor University and the author of “Shiny Objects: Why We Spend Money We Don’t Have in Search of Happiness We Can’t Buy.”
“We’re going to be more free with our spending when … we didn’t generate the money that’s paying for it. The fact that we’re paying with a credit card-like mechanism, (means) we’re not going to be as mindful of the price. We’ll overpay or spend more money than we would otherwise,” he said.
Here are some ways to be a better spender when using gift cards:
>> As tempting as it may be to immediately spend the card, cool it for a moment, Roberts said. “Wait for the newness and the excitement of having free money settle down a little bit. Look at it as if this is just like real money or cash; we should be patient,” he said.
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>> If you’re looking to buy a particular item, research the price. Without a reference point, people are likely to buy the first one they see at whatever price it is, especially with a gift card, Roberts said. Since many gift cards are store-issued, it’s possible the item you’re contemplating may be more expensive at that retailer than others. In that case, look for something else to buy.
>> Be more mindful, said Mousumi Bose Godbole, professor of marketing at Fairfield University. Ask yourself: Am I really looking for a specific product or am I just spending money? There’s a difference between shopping, which is making an informed decision, and buying, which is spending the actual money. Shop to your heart’s content, she said, just be reflective before you slap down the card.
>> What if the gift card is from a store you don’t like? Some stores may accept it as a return if you have the receipt and it’s unused. Many websites let you sell unwanted gift cards, but you won’t receive face value. Bose Godbole suggests buying something for another person or using your gift card to help others.
>> Research shows if you’re with a spouse or parent when shopping, you’re much less likely to spend in a profligate manner than when alone or with friends. “Shopping with friends is like throwing fuel on the fire,” Roberts said.