[peoplefromibiza]

> But then you have to explain why gift cards are worth something

gift cards are vouchers

You pay $30 to the store so that someone else can spend the $30 in that store.

It's a certificate, not a currency, not a store of value.

[eric_cc]

It’s “buying power”

[peoplefromibiza]

  gift card
  noun [ C ]
  uk /ˈɡɪft ˌkɑːd/ us /ˈɡɪft ˌkɑːrd/

  a card that can be exchanged in a shop or on a website for goods or services of the value that is printed on it

it's literally the same thing as cash, a check or a voucher.

it is also entirely dependent on the same external factors of cash, vouchers and checks: inflation, exchange rates, etc.

because it's simply a certification that you can spend that amount of money, in that currency, in that shop and that's it.

Also: a Patek Philippe is buying power as well

everything that can be exhchanged for something else can be defined as "buying power"

but an American Express or a gallon of water in the desert are buying power too.

the definition is too broad to be useful.

[eric_cc]

I’d counter that buying power is the only metric that matters. All these abstractions of buying power may distract and distance you from this most important metric - often to the benefit of companies and nation states.

[peoplefromibiza]

> I’d counter that buying power is the only metric that matters

I'd counter that protection of buying power over long periods is what really matters.

My CD collection had an enormous buying power in the 90s, now it's almost worthless.

I reckon one cannot rely on buying power of CD or DVD or VHS.

> often to the benefit of companies and nation states.

In this regards people, companies and nation states interests are usually aligned, i.e a stable currency that provides protection against wild fluctuations and retains its buying power and its usefulness.

Unless you are an enemy of the people, I don't see why someone should not like it.

[eric_cc]

Good points. Consider all the different investment instruments out there. Abstractions on top of abstractions on top of abstractions of buying power. Yes, a stable currency is desirable. But volatile abstractions are also beneficial to powerful entities.

[steveBK123]

its a loan to the card issuer

[peoplefromibiza]

an interest free loan, that's why it has "gift" in the name.

It works the same way as lending the money directly to a person, gift cards are simply more convenient to handle and are safer than cash, but other than that it's just a gift in the form of cash, no matter how many intermediaries are between the sender and the receiver, the input and the output will always match exactly.

If, for example, I give my friend Alex $20 to buy something for his little daughter but Alex uses it to bet on a football match and loses it, Alex has to take some money from his pocket and then buy the gift with his own money. Which is not different than saying he spent his money on the bet and bought the gift with the money I gave him.

If otherwise Alex wins, he will still buy the gift, but he will also have increased the initial sum by an x% which he can keep (or maybe try his luck again)

Buying a gift card is the same process, the company holding the money at one point has to give back something of the same exact value, it doesn't matter what they do with the money in between, what matters to the sender and the receiver is that the amount printed on the card is fully available at the check out (which is just lik getting the amount in cash and then paying with that)