Why is it worth it for companies to take your money for gift cards or virtual dollars for spending later? Sometimes they’ll even take $40 and give you $50. What’s the benefit to them?

Question

Why is it worth it for companies to take your money for gift cards or virtual dollars for spending later? Sometimes they’ll even take $40 and give you $50. What’s the benefit to them?

In: Economics

Answer 1

Same psychology behind why gyms have a special “$10/month” program….the people who are serious about going to the gym wouldn’t be motivated by simply a low price; it’s targeted to the folks they know who have a sudden urge to get healthy, sign up for the ten bucks a month, and never show up.