Do consumers appreciate promotional gifts?

Purpose This paper aims to examine whether consumers’ appreciation of promotional gifts exceeds firms’ cost of providing these gifts. The paper also compares characteristics of appreciated and unappreciated gifts. Design/methodology/approach The authors surveyed 1,289 college students in five European countries. The authors use willingness to accept cash (WTA) for an item to assess consumers’ appreciation of promotional gifts. They then compare WTA to firms’ estimated cost of providing the gifts. Findings On average, consumers’ appreciation of promotional gifts is 2.4 times the estimated cost of these gifts to sellers. Appreciated gifts tend to be less costly, tend to accompany more expensive purchased items and are more likely to complement these items. The results also reveal that more expensive items come with more costly gifts, although the gifts’ cost increases less than proportionally with the associated items’ price. The gift items are appreciated by men more than women. Originality/value This study enriches the literature on promotional gifting by introducing a simple measurement that can help firms decide whether to use gifts or discounts to promote their products.