A story from China talks about the popularity of gift cards among Chinese consumers. The use of prepaid cards is ubiquitous now in China, but it is not immune to controversy. For example, people are concerned that they could be used for bribes. And the government is paying attention.
Recently, the use of gift cards as bribes even drew attention from the highest ranks of the Chinese government. On March 25, Premier Wen Jiabao, during a speech on fighting corruption, warned that the gift card had created an easy means of corruption and called on the government to address the issue.
Despite the grey part of the market, it does provide some incentive to consumers to make more purchases and use up the balances before the card expires.
After all, gift cards spur spending. Chinese usually instinctively save cash, but do spend most of their gift cards.
Anything that gets money out of savings accounts and into the wider economy is good for the country, from a Keynesian perspective even if it costs consumers a tiny amount each time.
Mercator’s recent report on the prepaid card market in China provides a comprehensive overview and in-depth analysis of the prepaid card market in China across 11 major segments. Find out more information here: http://www.mercatoradvisorygroup.com…d=588&catid=14.