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1. Introduction
Gift-giving enables social interaction and extension of relationships (Clarke, 2007; Horne and Bendle, 2016; Sherry, 1983). Although the value of giving has not changed over time, expectations around what to give have shifted substantially due to technological advances and consequent commercialization. Gift cards became the most popular gift to receive for nearly a decade after such cards became available (National Retail Federation, 2018). The trend appears associated with the market development of these cards (Offenberg, 2007). The market growth and relevant expansion are occurring globally given the societal influences of gift cards’ benefits and these cards’ economic value for businesses (Horne and Bendle, 2016). The market growth of gift cards, however, has not kept pace with research around gift cards and associated consumer behaviors.
Most studies have framed gift cards as an alternative payment option by comparing them to conventional forms of payment. Scholars have examined general consumer behavior when using gift cards, motivations behind giving gift cards from givers’ perspectives and recipients’ perceptions of receiving gift cards (Flynn and Adams, 2009; Liu and Chou, 2020; Offenberg, 2007; Valentin and Allred, 2012; White, 2006; Yao and Chen, 2014). More specifically, the majority of previous studies mainly investigated the effect of gift cards on consumer reactions by comparing them to other gifts, including cash (Table 1). Surprisingly, only a few studies (Gunasti and Baskin, 2018; Reinholtz et al., 2015) have focused on the effect of the different types of gift cards in the context of gift cards solely. They characterized gift card types as gift cards for hedonic (special) or utilitarian (everyday) products and luxury or non-luxury brands. This current research is to address how gift cards with distinct characteristics (i.e. different gift card types and the degree of amounts in face value) affect consumers’ reactions.
Furthermore, given that gift cards have emerged as the most wanted gift to receive (National Retail Federation, 2018), gift cards can encourage existing consumers to return to a business and draw new customers into stores (Horne, 2007). These benefits can essentially increase the profitability of service providers. However, despite the potential to generate supplemental revenue via the selling of gift cards (Khouja et al., 2013), scarce research has provided relevant practical implications by considering consumers’ perceptions,...