Demonetization has caused a major upheaval in the Indian economy. Cash is not only very easy to use, it is reliable because it does not require any additional infrastructure, it can be used by those without bank accounts, and it provides privacy and anonymity. Suddenly, the cash has been taken out of the system. The problem of replacing this cash is one of enormous scale. And so it has been a time of hardship for many as they struggle to get hold of legitimate notes they can use. In the absence of cash, other alternative payment mechanisms are gaining acceptance. E-wallets, debit and credit cards are showing a sharp increase in usage, while the “cash-on-delivery” mode that was so popular with e-commerce has been curtailed. The country is being nudged to a digital economy. True, it is still hard to imagine acceptance in rural India, but in the cities and tier-2 cities, the shift is happening.
So, what about gifting? The Indian culture is full of occasions for gifting. And, in most cases, gifting in cash is the norm. So, what happens now that the cash has dried up?
Imagine a few scenarios:
Simran is getting married to Raj. How will friends and family organize the gifts in the absence of cash? There was a picture circulating on WhatsApp where a couple sat with POS machines – presumably to collect their gifts via credit/debit card. Is there a better option?
Rohan has just graduated from his college. His doting Uncle – Balu mama – has been in the habit of rewarding Rohan’s success with some “baksheesh” – money that he hands over to Rohan. How does he give the baksheesh to Rohan now?
Krishnan and Asha are moving into a new home. Normally, friends and family would have gifted selected items or cash to help them settle into their new abode. What do they do now?
Sundar is now retiring from office. It is the norm in the office to collect money from colleagues and hand over to the person retiring. In the present scenario, people are not keen to part with the cash. Will there be a break in tradition?
The Indian culture abounds with such occasions where gifting is the norm: Festivals through the year from Makar Sankranti to Diwali to Christmas and New Year, engagement and weddings, naming ceremonies, birthdays and anniversaries, graduation, housewarming, retirement or a send-off to a colleague, awards at competitions, … the list is long. Hard cash will be saved for occasions where there is truly no option but to use cash. Transferring cash from one bank account to another is a possibility, but it is not always practical in the above scenarios. Therefore, where possible, alternative mechanisms would be welcome.
One extremely viable option brings the notion of cash and gifts together: Gift Cards. Yes, buying a gift card in today’s scenario would still require the adoption of a digital payment mechanism. But, in a cash-strapped economy, it is the practical option. And, after that, in the hands of the receiver, the Gift Card is as good as cash.
A gift card can be personalised; more so in a digital gift card where one can choose audio/video messages or photos to be used. The gift card can thus convey emotions, recognising the special bond between the giver and the receiver, recognizing the occasion and the sentiment, which is the essence of gifting. Simran’s friend Farida sent her a collage of their school photographs along with the gift card. Balu mama’s gift card included a brief message that conveyed the pride and joy he felt, and his blessings and encouragement to Rohan.
A gift card gives the receiver the power of choice. There is plenty of variety available: Physical Retail Stores, Online e-commerce stores, Travel and Hospitality Industry, Restaurants, Stores selling electronic goods and appliances, Apparel brands, Gold and Jewellery stores, and even those dealing in selling Experiences. There is a further option of using semi-closed or open-loop gift cards which give the user a greater flexibility because they are accepted across multiple merchants. Simran-Raj, Rohan, Asha-Krishnan, Sundar each has different needs, different priorities, and the gift cards give them the power of choice to spend as they desire!
A gift card can easily be delivered across towns. Indeed, with digital gift cards, it can be instantaneous delivery via email or mobile! It could even be scheduled to be delivered on a specific day. Most cities and towns have outlets of the brands that will honour the gift card. So, the sender is assured that his gift will be useable, with no change in terms or conditions. Simran’s chachi from Chandigarh can’t make it to the wedding, Asha’s co-sister from Coimbatore is unable to come for the housewarming, but they can easily send their gift card, right on time, with full knowledge that it will make a difference!
There is no doubt that the decision on demonetization has delivered a shock to the Indian economy. While it has posed challenges, it has also catalysed India towards greater adoption of digital payments. In this changed scenario, Gift Cards provide a viable option to gifting cash. In the hands of the receiver, the gift card is akin to cash. It is practical, it is flexible, it is convenient, and it is very likely that the person who receives it will indulge and treat herself – which is exactly the sentiment behind a gift!
So, what are you waiting for? Go ahead, try it now!
Author: Sanjay Tambwekar (CTO, Qwikcilver Solutions Pvt Ltd)