WSU researchers find differing opinions on giving, receiving gift cards

Published: Sunday, Nov. 18 2012 4:47 p.m. MST

Gift cards for various retailers are offered for sale at a supermarket in Omaha, Neb., Jan. 10, 2008.

Nati Harnik, Associated Press

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SALT LAKE CITY — More and more holiday shoppers are choosing gift cards in lieu of individualized gifts. But researchers at Weber State University have found that not all gift cards are created equal.

What kind of gift card you give, for example, may suggest the type of relationship you have with the recipient. 

Six in 10 adults who participated in the National Retail Federation Consumer Spending Survey this year said they'd like to receive a gift card during the holidays. That's the largest percentage in the survey's history and the sixth consecutive year that cards have topped Christmas lists over traditional items like clothing, books, electronics or jewelry.

Some cards are seen as little more than cold hard cash, while others are viewed as a freedom to indulge in personal luxuries, according to a survey conducted by WSU marketing professors Erhard Valentin and Anthony Allred and published in the Journal of Consumer Marketin.

The researchers also found a disconnect between the attitudes of those giving and those receiving gift cards. Nearly half of the respondents liked giving a gift card to a nice restaurant, yet only 27 percent wanted to receive one. On the other hand, 33 percent of adults were thrilled to receive a department store or jewelry gift card, compared to 21 percent who were likely to give one as a gift.

The different giver and getter responses were affected by factors such as the card's value and the type of relationship the two people shared, Valentin said. People were more receptive of receiving cards to general retail stores like Target or Walmart from mere acquaintances, but tended to expect gift cards to specialized or department stores from their dear friends, he said.

He said gift cards can be looked at in terms of their effective liquidity, or the degree to which they function like cash. Effectively everyone can find a use for a gift card to Walmart, he said, but specialized stores require a little more thought on what the gift-receiver would want to purchase.

"Apparently cash and cash-like gifts still have a stigma attached to them," he said. "Cards like Walmart cards and Target cards are effectively liquid. It's like putting money in your wallet."

Valentin said one reason department store or jewelry gift cards are better received is because they allow people to purchase personal luxury items without the guilt they otherwise may feel spending from their budget. For example, a shopper may fall short of buying a bottle of perfume, he said, but with a gift card that covers some, or all of the expense, the choice is easier to make.

"Giving a gift card that allows the freedom to indulge without feeling guilty may be the best gift of all for a close friend," Valentin said. "If it's more of a windfall, something that you're not taking out of the household budget, you're more inclined to indulge."

The Deseret News asked readers to post their view of gift cards on Facebook and most said they're happy to be on both the giving and receiving ends.

"I love them!" wrote Meleea Larsen. "They're actually one of my favorite things to get!"

Hillary Cox Johnson wrote: "Gift cards can be just as thoughtful as an actual gift. It means you care enough about the person to not get them some crappy gift they aren't going to use."

But others said it depends on the store or restaurant the card comes from. Mottishaw Roxsan said it's frustrating to receive a gift card to a craft store since he doesn't craft. Another reader, Amber Church, said she likes gift cards except for the fact that it's unavoidable that the receiver knows exactly how much money you spent.

Kate Bradshaw, vice president of the Utah Retail Merchants Association, said gift card transactions are generally viewed positively by business owners. She said it makes it easier for givers to provide a gift of the receivers' preference, and in some cases will introduce new customers to a store or restaurant.

"I think it's safe to say (merchants) wouldn't provide them if they weren't mutually beneficial," Bradshaw said. "Retailers are interested in accommodating the consumer and shopper in a number of ways."

Holiday shopping in the U.S. is expected to grow by 4.1 percent to top $586 billion this year, according to the most recent estimates by the National Retail Federation.

"This is the most optimistic forecast NRF has released since the recession," National Retail Federation President and CEO Matthew Shay said in a prepared statement. "In spite of the uncertainties that exist in our economy and among consumers, we believe we’ll see solid holiday sales growth this year."

Bradshaw said the Utah Retail Merchants Association relies on the national federation's retail forecasts, but added that Utah has typically fared better during the recession than neighboring states.

"We are looking forward to a good holiday season this year," she said.

E-mail: benwood@desnews.com

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