Western children now have more toys, possessions, and games than ever before. Australia is one of the countries with the highest per-child average spend on toys. In order to avoid buying more toys for their children, many parents now opt to give gift certificates instead.
Gift cards are a great way to bridge the gap between giving a tangible gift that might be returned or even exchanged for something else and giving money, which is seen as impersonal by some cultures.
Children and very young ones often request gift cards to allow them to choose their gifts. Children process information differently than adults. Gift cards can have a significant impact on how children make decisions about their spending and spend the “credits” they receive.
Read more: What should we tell our children about money?
How do young children decide on a purchase?
The ability of children to process information is limited. Children tend to be more attentive to visual and audio stimuli than to textual information. Is more easily influenced by color and movement.
According to Jean Piaget’s developmental stages, children don’t reach “Formal Operations” until they are 11 or 12 years old. The ability to think abstractly and apply logic to any problem, such as those inherent to financial transactions and purchase decisions, is only developed at this stage. Children are generally not considered “consumer-literate” before they reach this developmental stage.
Children, especially those younger than seven years old, are not able to discern the advertising in a message. In fact, may regard an advertisement just as another type of. Advertisements are seen as an informational service that helps people decide what to buy and where to purchase it.
It is important to remember that some children may not be able to comprehend the advertising. To make matters worse, children’s films are increasingly marketed as toys. A variety of products are also “placed” within movie content, including food and confectionery.
Children may not understand the marketing strategies used in this case or that such content was not passive, depending on their age.
Read more: Children are far from protected from junk food ads – especially on social media.
Gift cards represent ‘credit.’
Children who receive a gift card should manage the amount of credit on the card. puffy/Shutterstock
Gift cards are available in hundreds of different forms, either for online use or to be used at retail stores. Children’s gift cards can be used to purchase music or online games.
Australians spend about A$2.5bn a year on Gift Cards. Gift cards come with the responsibility of managing the “credits” they bestow, which is important for children. Nearly one-third (including children) of those who receive a gift card never exchange it for products or services.
Read more: Gift cards often end up in the bin, but extending their life might not help.
Young children also face the dilemma of overspending or underspending when they redeem the card. Overspending happens when the child selects a product that exceeds the value of the gift card and has to negotiate with their parents or carer to make up the difference or decide on a different purchase. Conversely, they might select an item that costs less than the amount of the card and not understand terms and conditions such as non-transference of value or non-cash redemption.
Even adults can have difficulty understanding these scenarios. Children do not understand “disclaimers”. This can have implications on how well children manage the concept of “credit.”
Is also a factor to consider when it comes to digital gift cards and e-vouchers. The digital format can present challenges to young consumers, even though many are digitally literate.
Children do not receive a tangible gift in this case because digital cards are sent to the recipient electronically or to a parent in the case of an infant. What is the impact of this on fostering gratitude and appreciation among young children?
Dear Santa
Researchers from the UK examined the content of letters written by children to Santa Claus and found that there was a correlation between the type and amount of advertising the children were exposed to as well as the age of the child. Children who were exposed to more advertising included more requests for brand-name items in their letters to Santa Claus than those who saw less advertising.
Are we going to see more Santa Claus letters asking for gift cards in the future? Probably. These cards are becoming increasingly popular as Christmas gifts, especially for the young.
A survey by the Australian Youth Forum found that some Australians aged under 30 use gift cards instead of credit cards. The number of children who have access to credit cards belonging to their parents is increasing. Credit cards are now being issued to children as young as 8 and 9. Many of these young consumers may not understand the difference between credit cards and gift cards.
Children lack the cognitive skills necessary to evaluate marketing messages about toys and other products in the same way as adults. Children also lack the maturity required to make the many decisions needed for the use of “credit” on gift cards. They are, therefore, a vulnerable group.
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