Limit the Value Range on Guest Gift Cards

Clarkson University researchers were interested in a commonly used feature with gift cards—a redemption range printed on the card. A Best Buy gift card reads “Choose any amount from $20 to $500.” In the top right corner of a gift card for Dairy Queen purchases is printed “$15-$250.”
     You won’t buy this Best Buy gift card at a Best Buy store, nor will you buy the DQ one at a Dairy Queen, and that explains why a range amount is on the card. These are referred to as “guest retailer” cards, selected from a rack maintained by a “host retailer” and containing gift cards from an assortment of retailers. When the customer purchases the gift card, they tell the cashier how much they want loaded onto it. Having the range of values avoids the host retailer needing to stock cards for many points along that range.
     How would a recipient react to a card loaded for $15 when the upper range is $250? the researchers wondered. And how does any anticipation of the potential recipient’s reaction influence the potential gift giver’s actions?
     As we might expect, the researchers found that a purchaser wanting a low value loaded would prefer a card with no range printed on it than one with a range. This is due to the social risk of appearing not to sufficiently care about the recipient. This interpretation is supported by the preference difference disappearing when the purchaser is buying a low-value gift card for themselves. The givers’ concerns are appropriate, considering how another part of the study indicated that recipients felt more positive with a no-price card than with a price-range card when the value was $25 and the range was $25-$250.
     Based on their findings, the researchers recommend that retailers set the range shown on their own guest cards to what they learn are the most commonly purchased loads. This would probably lessen the distance between the maximum available value seen by the gift card recipient and the value the giver chose to load onto the card, making the purchase of the card more attractive to the giver.
     Research also suggests typicality from another perspective. 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.

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