This website uses cookies.

By clicking the "Accept" button or continuing to browse our site, you agree to first-party and session-only cookies being stored on your device to enhance site navigation and analyze site performance and traffic. For more information on our use of cookies, please see our Privacy Policy.

  1. Home
  2. Journals
  3. Journal of Economic Perspectives
  4. Spring 2007
  5. Markets: Gift Cards

Journal of Economic Perspectives

ISSN 0895-3309 (Print) | ISSN 1944-7965 (Online)

Markets: Gift Cards

  • Jennifer Pate Offenberg
Journal of Economic Perspectives
vol. 21, no. 2, Spring 2007
(pp. 227–238)
Download Full Text PDF
(Complimentary)

Abstract

The Mobil Oil Company introduced the first retail gift card that recorded value on a magnetic strip in 1995. In under a decade, such gift cards replaced apparel as the number one item sold during the Christmas season. This study will discuss the reasons for the strong surge in the gift card market. It will then consider the value of gift cards as an intermediate option between two alternatives: purchasing a physical gift, which could possibly be returned or exchanged, versus giving cash. Empirical data on the resale price of gift cards from an Internet auction website provide information on the value that recipients place on gift cards suggesting that the difference between the cost of a gift card to the giver and its value to the recipient is substantial, although perhaps not quite as large as the parallel gap involved in physical gifts.

Citation

Offenberg, Jennifer, Pate. 2007. "Markets: Gift Cards." Journal of Economic Perspectives, 21 (2): 227–238. DOI: 10.1257/jep.21.2.227

JEL Classification

  • D14 Household Saving; Personal Finance
There are no comments for this article.
Login to Comment