Feature: Vouchers and cards: Beating the budget blues

As you stand there staring with disbelief into the palm of your hand and wondering why the amount of change that you have received from the assiduous bartender has so drastically depleted since the last time, there can only be two explanations. Either you have simply had too much to drink or, more likely (although not in all cases), the latest Budget has been brought into full swing and the rate of inflation has been none too kind this time around. The fact that you can no longer afford more than two drinks for a tenner is only worsened by the fact that you can ill-afford to enjoy sobriety by driving home early since the costs of running a car have escalated too!

The state of today’s economic climate, with an impending threat of recession and general costs of living on the rise, inevitably affects consumer spending habits and this is an issue that every industry will need to address. As vouchers and gift cards form an important aspect of consumer spending, I felt that it was important to examine how a downturn in the economy could affect the industry as a whole. More importantly, how can vouchers and gift cards be used to help counter the effects of a general reduction in disposable income? By providing the opportunity for the recipient to supplement their household budget for home essentials or to make luxuries more affordable, we will see that vouchers and gift cards can provide important subsidies when the pound needs to be stretched that little bit further.

Vouchers and gift cards have traditionally been associated with the gifts industry – a flexible solution for friends, family, colleagues and employees as a present that they can enjoy with the pleasure of getting to choose their own preferred gift. As the market has continued to develop, the range of gift ideas that are available through vouchers and gift cards has also dramatically increased. For example, there are now vouchers available that cater for anything from purchasing the latest bestseller from your local bookshop to a day spent living life in the fast lane racing Ferraris at Silverstone.

As I mentioned in last month’s column, the voucher and gift card market has expanded rapidly over the last decade with diverse new entrants setting up voucher and gift card solutions that facilitate a variety of different applications. The major benefit of such expansion is that vouchers and gift cards now cater for a much wider range of products and services. The upshot is that gifts, in the traditional sense of the word, now represent just one redemption option among many.

The supermarket giants are a hugely important part of this industry, for example, and department stores too. The growth of these megastores, including several Va members, with the emphasis on offering as diverse a range of products as possible, means that vouchers and gift cards can now be redeemed against all manner of home essentials as an alternative to luxury gifts.

From helping to foot the food bill to paying for school uniforms and equipment, shoes, cleaning products and other homewares, vouchers can offer essential support in covering the growing costs of living. This is a major reason why so many organisations are now offering their employees vouchers that can be redeemed against essential home goods and services on top of the basic salary as part of an employee benefits package. While vouchers help to cater for many essential items, the aid that they offer on a day-to-day basis is a hugely appealing benefit and one that helps the household budget to go further.

However, there is also another way of looking at this. Many people may prefer to use their vouchers and gift cards as a way of supplementing their disposable income by spending them on more enjoyable pursuits. Putting them towards paying for a holiday, eating out, going to the theatre, family excursions and, of course, paying for gifts are all examples of the types of luxuries that are made more affordable during times when the purse strings have to be held that little bit tighter. Used in such a way, vouchers and gift cards offer a valuable bonus on top of a basic salary.

So while there is no way around the effects of inflation on your drinking habits – let’s face it, you’re not going to suddenly stop – vouchers and gift cards are a useful way of creating a more agreeable Budget, whether spent on essentials or put towards luxury goods.