Why Gift Cards Will Never Be Entirely Digital or Entirely Dominant

by Ben Jackson 0

Technophiles like to predict that plasticwill disappear and that all gift cards will be purchased, sent,received, and redeemed via computers and mobile phones. Surveys ofgift givers and recipients show that more and more people list giftcards as their first choice of gifts to give and receive. So itwould seem that the end of these trends is that all of our futuregifts will come via e-mail or text message. Yet this is an extremepoint that will never be reached.

In What Money Can’t Buy: the Moral Limits of Markets,author Michael Sandel briefly talks about gift cards in a broaderdiscussion of how gift giving is not viewed as a rational practiceby economists, unless that gift is cash. Any other kind of giftdoes not “maximize the welfare your gift provides…” He goes towrite that “gift cards represent a halfway house between choosing aspecific gift and giving cash.”

As Sandel points out, gifts are about more than just “maximizingwelfare” of the recipient. They carry additional value that is noteasily quantified. However, he may be a little harsh when he saysthe gift cards represent the commoditization of gifts andaffection. For example, a gift card to Subway restaurants probablyhas more value to it than buying ten sandwiches to sit around inthe freezer.

That is why physical gift cards – whether they are made of plasticor some other material – are likely here to stay. That halfwaypoint between cash and a gift gives people the ability to sendgifts at long distances, contribute to a gift they otherwisecouldn’t afford, and give a gift like sandwiches that might not fitso well into wrapped box. The other advantage of cards is that theydo this with a physical token that helps bridge the gap betweencash and physical cards. This is why plastic will never goaway.

The desire for a physical gift, a token that will convey somethingmore than just “Happy Birthday” or “Congratulations on YourGraduation” will keep the other extreme from happening. In otherwords, even with all the advantages of gift cards, there are stillpeople who want to give an actual sweater or other item becausethey feel, as Sandel does, that gift cards are just one step awayfrom giving cash – and that’s just tacky.