Fit Displayed Items to Payment Denomination

A classic finding is that your shoppers are more likely to spend their cash at your store if they have five $20 bills than one $100 bill. The explanation has been that people resist breaking the big bill.
     Now researchers at Macquarie University, Virginia Tech University, and Ghent University identify an alternative explanation for the finding: People prefer to match the payment denomination to the cost of the item. When consumers shop for items costing around $20, they feel that using smaller bills like $20 bills is more suitable than using $100 bills. For items which do cost around $100, shoppers will feel more comfortable using their single $100 bill than their five $20’s. That’s what happened in a set of studies by the researchers.
     As long as the bills are genuine, you’ve little concern about which of those bills the purchaser pulls out of their wallet. But the finding does make a difference when it comes to gift cards. The desirability of a match held there, too. When a shopper appears with a gift card they’re seeking advice in using, start by showing them items with prices close to matching that of the gift card. All else equal, this increases the likelihood the transaction will be most comfortable for them and they’ll be most satisfied with their purchases. Consumers preferred products for which the price matched the denomination of payment.
     There are also implications for the denominations of gift cards you sell and vouchers you give for occasions such as product returns. If your store carries few items with prices around $100, but many in the $20 to $50 range, recommend to the gift card purchaser that they get two $50 cards instead of the single $100 card they originally requested.
     Other research findings support this principle of typicality in gift card transactions. People coming to you with a gift card bearing your store name are most comfortable purchasing with that gift card items typical of what you carry in your store rather than items outside your main merchandise lines. This means that if the shopper asks for guidance on how to spend the gift, begin by showing your best-selling items.
     That’s where to start, but I suggest you then move beyond the typicalities. The shopper with a gift card is more likely to browse your aisles than is the shopper without a gift card. Here’s an opportunity for them to become acquainted with the scope of your selection.

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Give Change in Varied Denominations 

Begin Gift Card Users with Store Typicalities