September 29, 2023
Gift cards are commodity money in the modern commerce world and are used for fixed amount purchases. They operate as prepayments and establish a direct relationship between the holder and the business that issued the card. This article explores the economics and investment potential of gift cards, their impact on consumer behavior, and the future of gift cards as the world transitions towards online shopping.


Commodity money is any medium of exchange that has value beyond its use as money. This includes gold, silver, and other precious metals, as well as rare stones and collectibles. In the realm of modern commerce, gift cards also fall under the category of commodity money, as they have a specific exchange value and are often traded in secondary markets.

Gift cards, in particular, are a form of stored value currency that can be used to purchase goods and services at designated businesses. They are often distributed by retailers, banks, and credit card companies and typically have a fixed amount or a predetermined range of money that can be spent upon use.

There are various types of gift cards available, such as store-specific cards that can only be used at a particular retailer or general-purpose cards that can be used anywhere the card brand is accepted. Despite these differences, all gift cards share striking similarities with traditional commodities in terms of their economic value and usage.

The Economics of Gift Cards

The monetary value of gift cards is indisputable, as consumers often exchange real money for these cards with the intention of using them to purchase goods at selected retailers. In essence, gift cards operate as a form of credit or prepayment, establishing a direct relationship between the holder and the business that issued the card.

Gift cards can be issued via online platforms or in-store, and there is a complex economic process behind their usage. Depending on the terms stated on the card, gift cards may have various fees, expiration dates, or restrictions that can impact their overall worth. As a result, laws have been established to protect consumers from being misled or scammed by false claims made by issuers on gift cards.

Capitalist economies place great emphasis on consumer spending, and gift cards have become a popular tool for retailers to persuade customers to spend more money. They are often used to encourage repeat business or to introduce new customers to a specific store. In a way, gift cards help to ensure steady cash flows for businesses, which plays an essential role in a capitalist economic system.

Gift Cards As an Investment Option

Investing in gift cards has become an increasingly popular option for some individuals, particularly in recent years. Gift cards can appreciate or depreciate in value depending on the demand for the specific brands and retailers that issued them. For example, a person may purchase a gift card for a trendy new restaurant that has garnered a lot of media attention. If that restaurant becomes even more popular, the gift card may increase in value, leading to a higher potential return on investment.

However, investing in gift cards comes with its own set of risks and uncertainties. For one, gift cards are not backed by any securities, and they lose their value if a business goes bankrupt or faces other economic hardships. Additionally, investors need to be aware of the various legal and financial implications of investing in gift cards, such as taxes and resale restrictions.

When it comes to buying and selling gift cards, there are several tips and tools available to investors. Online marketplaces such as Cardpool, Raise, and Gift Card Granny provide platforms for the trading of gift cards, and users can compare prices and customer ratings before making purchases. As with any investment, doing thorough research and staying informed is key to making sound financial decisions.

Impact of Gift Cards on Consumer Behavior

Gift cards can have powerful effects on consumer purchasing behaviours. In a competitive retail environment, gift cards can help to bring in new customers and keep loyal customers returning. Consumers may be willing to spend more money than the gift card value, a phenomenon known as the “gift card boost.” In addition, consumers are more likely to make unplanned purchases when using a gift card, leading to increased revenue for retailers.

Research has shown that consumers who receive gift cards often feel a sense of obligation or responsibility to spend them, even if they do not necessarily need or want to. This behaviour can lead to increased spending, sometimes beyond the gift card’s value. Marketers have recognised the potential of gift cards as a tool to influence consumer behaviour, employing various tactics such as targeted promotions and free gift cards with purchases to entice customers to spend more money.

The Future of Gift Cards

Gift cards, like other aspects of retail, are rapidly transitioning to online commerce. The popularity of e-gift cards has grown exponentially, especially during the COVID-19 pandemic, as consumers have increasingly turned to online shopping and contactless payment methods.

Businesses have been quick to adapt, implementing digital gift card services, so they remain competitive with other retailers. Furthermore, digital gift cards could have a more significant impact on the environment due to their paperless nature, making them a “greener” option compared to traditional plastic cards.

Overall, gift cards are a unique form of commodity money that has become an integral part of the modern retail experience. They possess value beyond their use as currency, can serve as a viable investment option, have the potential to influence consumer behaviour positively, and are adapting to the changing landscape of online commerce. As such, gift cards are here to stay and remain a crucial component of the retail industry.

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