👋Hi Friends,
📆This Week’s Topic
This week we will have a shift in topic. Normally, I talk about current financial news or personal finance. This week we will be talking about something else. This week I want to discuss the gift cards. Gift cards is one of the most popular forms of gifting and is a product that a lot of people don’t really understand. Gift cards can help build brand awareness and also lets them have free advertising in your wallet, the one place they need to be advertised in. So let’s began talking about gift cards and how the gift card companies manipulate you.
💳 Intro To Gift Cards
Gift cards is pretty simple. Lots of people buy gift cards for friends, family, and coworkers. Gift cards a good way to be able to give someone a gift without knowing too much of what they like. The profit comes in with a few different tactics. A good number of gift cards come with an activation fee. For example, if you are buying your friend a $50 target gift card you may have to pay a $5 activation fee. Not only that but when someone gets the gift card they use it once and then never touch it again. By the time they remember to use it the gift card has expired. This basically means that even for people who will use the gift card there may still be a couple dollars left. That charge plus the activation fees basically make gift cards a way for businesses to get free money. Everyone falls for this because gift cards are so common.
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📊 Consumers & Businesses
According to Bankrate, US American adults have over $15 billion in unused gift cards out of the total of $800 billion in gift cards. This causes a gift to mom to be just a gift for Amazon. Consumers are losing money on these gift cards not even considering the activation fee. Businesses are making big bucks on these gift cards. An average American has $116 in unused gift cards. Gift cards also have zero risk for the business because even if they use it they break even or make money from the activation fee. Also, the gift card acts as free advertising and builds trust for the brand. 51% of Americans have unused balances on a gift card.
🎁 Alternatives To Gift Cards
Since gift cards are a pretty good method of gifts what is a good replacement for the gift card. I would personally recommend getting them a personalized gift. For example, if they like card games you get them a pack of cards. Another way is to give them a cash or a check to make sure they can spend the money the way they want. This ensures that their money doesn’t expire like a gift card would. Gift cards are a favorite for people you don’t know, but the money on the gift card that you send to your friend is probably going to Chipotle not your friend to spend.
⏳ Final Summary
In summary, gift cards are a popular forms of gift in today’s world. But the truth behind gift cards is that they just manipulate you. Gift cards usually hold a small activation fee to get a little bit of profit at the start. However, most people don’t even use the entire balance on the gift card leading to even more profit. Gift cards a cool way to give a gift to someone who you don’t know well but this gift is likely to going to Amazon or Target rather than your friend. The solution is to use other forms of money like cash or a check. If you don’t want to do that you can also give them a normal gift.
🙏Thank You & Important Information
Anyway, Thank you for reading this edition of Friday Finance. I have really enjoyed writing to you guys and would be grateful if your purchase an item from our shop (link below). Have a great week and I will see you next week.