Gift card types and willingness to spend more

Abstract

Purpose

This study aims to provide a better understanding of how gift card receivers react to the types of gift cards. This study examined the effect of gift card types (intangible experiences vs less intangible experience vs tangible goods) on a recipient’s willingness to spend more through emotions and perceived effort (Study 1) and on feeling of appreciation (Study 2).

Design/methodology/approach

Study 1 adopted a scenario-based 2 (tangible vs intangible) × 3 ($100 vs $200 vs $300) between-subjects design. Study 2 narrowed the scope of gift card type (intangible vs less intangible).

Findings

Receivers tended to perceive less effort in gift card selection and feel less emotion when receiving gift cards for intangible experiences than when receiving gift cards for both tangible and less intangible products. However, as face value increased, gift card receivers for intangible experiences felt more pleasure and, in turn, rated higher willingness to spend more money than face value than those with gift cards for tangible products.

Research limitations/implications

Future studies can rule out alternative explanations related to brand-related effects, previous experiences and personal preferences.

Practical implications

Service providers should put more effort into tangibilizing the intangibles to reduce receivers’ uncertainty. Also, they can increase their profitability by stimulating gift card receivers’ willingness to spend more money through pleasure.

Originality/value

Answering research calls for examining consumers’ perceptions of different gift card types, this study might be the first to unveil the differential effect of gift card types associated with the tangibility of products on purchase behavior and the underlying emotional mechanism.

Citation

Lim, S.(E). and Ok, C.“. (2022), "Gift card types and willingness to spend more", Journal of Services Marketing, Vol. 36 No. 5, pp. 710-724. https://doi.org/10.1108/JSM-10-2020-0422