It turns out, shopping with a gift card isn’t always such a gift.
Using a gift card often makes you spend more than you expected — and even more than the gift card was originally for.
That’s according to a new study from the company First Data
FDC, +0.28%
, a financial services company that provides services like debit- and credit-card processing and technology for retail checkout. The company studied 1,000 consumers in the U.K.
Some 74% of those consumers said they spent an average of 41 pounds ($54 U.S. dollars) on top of the original value of the gift card when they use them.
And 34% said gift cards spurred them to visit stores they normally wouldn’t.
Shoppers in the U.S. act similarly, First Data has found.
The company did a similar study in the U.S. in 2018, and found that U.S. customer spends an average of $59 more than the value of their gift card. That was up $21 from what consumers said they spent in 2017.
See also: Amazon rolls out more Echo devices, but they could make you spend more money
One possible reason why: People seem more willing to spend when their money is on plastic vs. in cash.
A study from the Massachusetts Institute of Technology (MIT), for example, found in 2000 that business students were likely to bid more for sports tickets when they were putting the purchase on a credit card than when they had to pay in cash.
Overspending isn’t the only thing to keep in mind when it comes to gift cards.
Consumers spend more than $130 billion on gift cards every year, but another $1 billion goes unspent, sitting in drawers and in wallets, according to the advisory company CEB TowerGroup.
So how do you avoid spending too much when you use a gift card, or wasting the money entirely?
“Plan ahead of time and ask yourself whether you truly value the item,” the personal-finance website NerdWallet suggests.
You can also sell gift cards you don’t want, on marketplaces such as Raise, Cardpool and Gift Card Granny.
Shares of First Data have been up 50.62% this year to date, compared to a 10.79% increase for the Dow Jones Industrial Average
DJIA, -0.05%
and a 11.42% increase for the S&P 500
SPX, -0.11%
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Source : MTV
