To Gift or not to Gift? : Reciprocity at a Durable Goods Retailer

Abstract: Due to intense competition, retail stores are today forced to come up with exciting new sales promotional ideas to remain a relevant choice for customers. Gift giving is a sales promotional tool which has previously demonstrated to increase customer satisfaction and spending - an ideal situation for any retailer. However, gift giving has only been researched and confirmed for retailers that offer consumable goods. It has yet to be measured in a context where it is of greater difficulty for the customer to spend more than planned. This research fills that void by conducting a field experiment at a retail store offering durable shopping products.The purpose of the study is to investigate the effect gift giving has on gratitude, obligation, satisfaction, impulsive buying, and spending at a retail store offering durable shopping products. Through a field experiment, the study tests the effect on these variables of both small and large gifts and explore whether customer spending increases alongside the gift’s monetary worth.To complete the purpose of the study, a case company representing a durable shopping products retailer was selected. A field experiment was setup with two experimental groups and one control group. The results from the manipulation were collected through questionnaires which included questions pertaining to the study’s five variables. The collected data was then analysed through the statistics program SPSS.The only emotion that is affected from providing gifts in this retail environment is obligation, a negative emotion, which in turn decreases customer satisfaction. Since giving a gift only evokes negative emotions, it is concluded that a durable goods retailer should not use gift giving as a sales promotional tool. Additionally, when given a large gift, customer spending decreases considerably. This could imply that gift giving does not work in this retail environment, or that an extraneous variable affected the experiment’s outcome.