Is a $200 Nordstrom Gift Card Worth More or Less Than a $200 Gap Gift Card? The Asymmetric Valuations of Luxury Gift Cards

Journal of Retailing, Forthcoming, Doi.org/10.1016/j.jretai.2018.07.002

37 Pages Posted: 20 Oct 2018

See all articles by Kunter Gunasti

Kunter Gunasti

Washington State University

Ernest Baskin

Saint Joseph's University

Date Written: September 27, 2018

Abstract

Gift cards account for a $200 billion market in the US, yet little is known about consumers’ preferences and valuations of different gift cards. We examine how average US consumers feel about exchanging luxury brand gift cards (LGCs) versus non-luxury brand gift cards (NLGCs). Using secondary data analyses, surveys, and experiments, we demonstrate two asymmetries: between valuations of LGCs versus NLGCs and between valuations of gift cards by givers versus recipients. We show that LGCs are valued less than NLGCs with identical price tags. LGCs are more likely to be swapped or sold. Resellers demand and buyers pay lower prices for LGCs. These effects are mediated by the perceived utility of the gift cards as gifts and moderated by a person’s role in the gifting process. Gift givers value and prefer to give LGCs more, whereas recipients prefer and value NLGCs more.

Keywords: Gift Cards, Valuation

JEL Classification: M1, M31

Suggested Citation

Gunasti, Kunter and Baskin, Ernest, Is a $200 Nordstrom Gift Card Worth More or Less Than a $200 Gap Gift Card? The Asymmetric Valuations of Luxury Gift Cards (September 27, 2018). Journal of Retailing, Forthcoming, Doi.org/10.1016/j.jretai.2018.07.002, Available at SSRN: https://ssrn.com/abstract=3256043

Kunter Gunasti (Contact Author)

Washington State University ( email )

386 Todd Addition
Carson School of Business
Pullman, WA Whitman 99164
United States
5093354833 (Phone)

Ernest Baskin

Saint Joseph's University ( email )

5600 City Avenue,
Philadelphia, PA 19131
United States

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