Gift Cards: A Shimmer of Light During Dark Times
As the pandemic rages, and businesses feel the financial backlash of a societal shut down, the world is turning to creative and interesting solutions to mediate the effects. Interestingly- and perhaps naturally- gift cards have become a focus of leverage to soften a big blow to both people and companies. We’re seeing gift cards continue to rise up in the form of rewards and incentives to lift up deflated and remote workers, offer some immediate financial help to struggling small businesses, and even serve as a vehicle for philanthropy.
Many big businesses, who commonly leverage gift cards in the form of rewards for employee recognition, sales incentives, and other forms of performance enablement, have been doubling down (or more) on their gift card utility during the pandemic. Now more than ever, employees, partners, and other stakeholders need support, morale boosts, and encouragement. Businesses have been heeding the call with increased communications, creative engagement techniques, and even monetary rewards as part of their approach.
Company spot awards, peer-peer rewards, and social recognition given to employees by major companies seem to be on the rise, as the appreciation and support that they represent are need now more than usual. Companies are even launching new trainings and challenges to keep knowledge and productivity high in distracting times, and infusing gift cards as the incentive to do so.
Small businesses are also finding some relief via gift cards albeit in a slightly different way. Gift cards are commonly helpful to businesses as “a significant source of revenue for retailers” writes Blackhawk. They provide short term costless cash flow for a cost of sale that occurs later down the line. Even further, there is a natural tendency for a consumer to overspend their card amount “as much as $30 more than the value [of the card].” Recently, consumers have been compelled to help keep their favorite brands and local businesses afloat looking to gift cards as the vehicle to do so. Much like a crowd sourced line of credit, loyal patrons have purchased gift cards and certificates from major brands to local restaurants in hopes that the front-loaded cash flow will help, at least a bit, in tiding the business over.
Small and medium sized businesses who don’t usually sell gift cards even have some hope, as major social media platforms have begun to respond to this phenomenon. Recently, Facebook has partnered with Square and Kabbage to launch an initiative that enables businesses to set up a virtual gift card. Facebook then facilitates the sale to customers directly through the business’s Facebook page. Similarly, Instagram has just released new features for small businesses, one of which makes it easier for businesses to showcase gift cards to followers. Local restaurants are even forming community alliances to support each other through the use of gift cards.
Card consumers, however, do face some risk that the business they patronize through proactive gift card purchase won’t survive to the point that they’ll be able to use the card. But consumers still seem to take pride in rolling the dice to help a struggling business, especially if it’s one that they enjoyed pre-pandemic.
Gift cards have even found a place in philanthropic endeavors during the pandemic. Visible Mobile, a mobile phone service provider, has recently been surprising random people on Instagram who are voicing struggles in the wake of COVID-19, allegedly giving away thousands in gift cards to those in need. Additionally, this week, an anonymous donor in Iowa donated gift cards from a local grocery store, restaurant, and coffee shop to every household in the small town of Earlham. An attempt to help both local businesses and citizens with a single act of kindness.
The support of others happening by way of gift cards is profound and heartening. Gift cards are of course not a solution to a global public health and financial crisis; however, they’re finding a meaningful place in providing relief in certain pockets of the world more so than they have before in the past. Gift card rewards won’t undo the stress and drastic lifestyle changes faced by remote workers, but they can serve as reminders that their company cares. Gift card credit may not solve the financial hardships of local sedentary businesses, but they could help pay down some of the rent in the absence of any other revenues. A gift card donation may not eliminate someone’s struggle, but the gesture can help power them through another day. In no times like challenging times do we see such impact of how a little bit could truly go a very long way.