A blog for my AP Economics class to discuss economics-related current issues and news.
It could be selling for more than face value because someone may want to get someone else a gift card for a present and they dont want to go out to buy it. People get others gift cards to show that they actually went through some effort to get the present. Money is better than a gift card because it is worth the same and you can spend it anywhere, but people still like to get others gift cards for presents.- Chris G.
I agree with Chris that laziness does play a facter in gift cards being worth more than the face value on eBay. More people would rather have things delivered to them than getting into a car and driving to the store and purchasing a gift card. Perhaps people are going in with the mindset that even though the cards are selling more than the face value, it would still be cheaper that using up gas, especially if someone is driving a SUV, driving to the store.- Gautam Rao
I have to disagree with the above posts. If driving to the store to buy a present is too much trouble, than you can still order the gift card from the store's website. In this way you can buy the gift card at face value without having to leave the house. The only explanation i can think of is that gift cards are worth slightly more than cash. Sometimes when you order things online like clothes you can use coupon codes. Some coupon codes are specific to only gift cards. this could slightly raise the value of a gift card past the amount on the card. But this situation still confuses me. -Jacob Hormes
One reason why the gift card could be worth more than its face value is becuase the item already has 26 bids on it. The starting price was $1. People see they can make a $19 profit by buying the gift card much cheaper than its worth. Over time, people become more competitive and the price escalades. And pretty soon people bid over the face value and thats how the price gets above its normal value. And people might pay a few more dollars for a gift card, so they can get it in the mail instead of going to the store and buying it themselves.-Chris Templin
I agree with what Templin said, in that people migh be bidding on this product for more than the face value, because they see that the starting bid was one dollar and that the amount available to save is 19 dollars. However, also think that there is a competitive drive that no one has managed to account for. When getting into a bidding war, the price of the good loses some signifigance, and strategy begins to become more important. Some people might be bidding high just to increase the "drama" behind the bidding war. I think that competitive drive might be the reason that the price was so high.-Schulz
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