Impact of Closed-Loop Gift Card Promotions By Businesses

Authors

  • Kathryn W. Ernstberger Indiana University Southeast School of Business, 4201 Grant Line Road New Albany, IN 47150
  • D. McDowell Indiana University Southeast School of Business, 4201 Grant Line Road New Albany, IN 47150
  • J. Parris Indiana University Southeast School of Business, 4201 Grant Line Road New Albany, IN 47150

DOI:

https://doi.org/10.18533/ijbsr.v2i6.144

Keywords:

Gift cards, promotion, consumer behavior, retail

Abstract

At their inception, gift cards were sold by businesses to customers to give as gifts to others. More recently, gift cards are beingused strategically by businesses to manage and transform their relationships with customers. Of particular interest here is the closed-loop gift card that can only be redeemed at the business whose name is on it. This analysis discusses the impact of closed-loop gift card promotions and evaluates the impact of these promotions ontotal spending, lift and redemption rates.

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