Format Matters in the Mental Accounting of Funds: The Case of Gift Cards and Cash Gifts

Abstract

Monetary gifts in the form of a gift card can lead one to spend and conceive of these funds differently than if the gift is given as cash. Across four experiments, the presentation of a gift card rather than cash led to both intended and actual spending beyond the amount of the original gift, and also influenced the types of purchases that consumers made. Even when features of the gift card payment mechanism that restrict fungibility of funds were removed, receiving a gift card led to greater spending than when an equivalent cash gift was received.