Pay any way: Gift cards and other options encourage greater spending

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One of the key ways to get consumers to buy a product or service is to give them multiple methods of paying. This concept has grown steadily over the past few decades as credit cards, debit cards, gift cards and gift certificates have become common, not just popular. The movie theatre is no exception to this trend, and while cash is still king at the theatre, plastic is here to stay. At both the box office and the concession stand, credit and debit cards are accepted, but so are the gift cards that make it so easy for consumers to spend a little more. Gift cards now come in multiple forms, they can be used online, and they do encourage more discretionary spending.

You can walk into most theatres these days and purchase plastic gift cards. This is no different than gift cards for other retail establishments and they can be filled with different amounts and redeemed anywhere within the theatre. They have essentially replaced the paper certificates and with good reason, and they can be used at the concession stand as well as the box office. Regal, Cinemark and AMC all offer gift cards that have different messages, such as “Congratulations!” or “Happy Birthday.” They also sell them online through their websites as well as at the theatre.

But gift cards have become more diverse. This holiday season, Regal has exclusively offered the Narnia Dawn Treader gift card. It has been marketed as a collectible gift card and sold in $10 increments. It is easy to see that this would make an enticing gift, allowing the card-giver to actually pay for the trip to see the movie. It is also easy to see that this could be a real trend for another great co-marketing effort between the studios and the theatre chains. Offering gift cards that specifically target blockbuster movies could be a groundbreaking way to sell advance movie tickets, and then concessions, once the customer is in attendance.

But gift cards do not have to be plastic cards. E-cards have become very attractive to the consumer as well. You can buy e-cards online and e-mail them directly to the recipient, without any human interaction at all. That sounds a bit dramatic, but that is what it entails. You can purchase the e-card online and e-mail it to your nephew in the next state and, voila, a gift is given that is easily redeemed. The e-card can be used on Fandango, for example, to purchase a ticket. It can also be printed and taken to the box office or concession stand for redemption.

The interaction of commerce and the Internet has created an online marketplace that produces a hybrid consumer experience with options, selection and payment happening online and the actual experience still occurring within a brick-and-mortar business, such as a movie theatre. Gift cards simply make this experience easier to transpire and encourage participation in the event. Maybe you can’t actually be with your granddaughter to take her to the movies, but you can still be a part of it by buying her the ticket and some concessions through an e-card, or even through a collectible card such as the one for Narnia.

That is the ultimate reason for the gift card program, to encourage participation and increase spending. Gift cards have grown considerably over the past decade as a preferable form of gift, one that allows the recipient to actually participate in the final choice of the gift itself. Statistics show that consumers will purchase products and services they may not have otherwise, if they are purchasing them with “someone else’s money.” A gift card takes some of the guilt out of spending, allowing people to use money on things they may not have sacrificed their own hard-earned $20 on.

According to the National Retail Federation, 61% of gift card holders spend more than the gift amount, and 75% of those spend 60% more than the value of the card. Those consumers, looking to avoid not spending the full $20 gift card, and seeing the card as an actual $20 bill, will use it completely and supplement the transaction with their own cash. Reducing their cash output with the gift card makes it easier to fork over a few bucks of their own.

This is why it is so important for gift cards to be redeemable at both the box office and the concession stand. Making it easier for the consumer to pay for the ticket or pay for concessions is essential to getting them to make the purchase. Some simple marketing rules such as ease of selection and ease of transaction go a long way to helping the consumer make the choice to buy. Gift cards are a part of this effort by the retail world to give consumers options for funding. Add in a little studio marketing and the incentive to purchase a gift card could go even higher.

Please send comments to Anita Watts at anita@reactornet.com.