Summer trend: Free-gas deals
MILWAUKEE - Two magic words are turning consumers' heads lately. Not Get rich or Lose weight. Try Free gas.
MILWAUKEE - Two magic words are turning consumers' heads lately. Not
Businesses from banks and hotels to golf-club-makers and blood-donation centers are offering promotions that involve free gas - generating more attention and goodwill from price-stunned drivers than traditional promotions might deliver.
For example, Callaway Golf Co. is giving away gas cards worth as much as $100 with the sale of certain drivers. Guests who book three nights through hotels.com will get $50 gas cards. And TCF Bank, based in Wayzata, Minn., is giving $50 gas cards to customers who open checking accounts.
The trend will grow in the short term as more businesses jump on the free-gas bandwagon, predicts Baohong Sun, a marketing professor at the Tepper School of Business at Carnegie Mellon University.
"A lot of companies, when they make decisions, they don't think independently," Sun said. "They'll jump into whatever their competitors are doing."
The gas-related promotions are expected to fade by summer's end. "People will pay attention until they readapt to prices, and then it won't be such a big deal anymore," said Suzanne Shu, a marketing professor at the UCLA Anderson School of Management.
Some companies, such as sporting-goods-makers, don't have obvious ties to gas prices. But others, such as hotels, have found that guests who arrive by car are especially seduced by the idea of a free fill-up.
Doug Symes, 48, knew he wanted to plan a summer vacation in Wisconsin Dells, a tourist hot spot in south-central Wisconsin. He debated staying at one of two resorts, and his decision was clinched when he heard that one, the Kalahari Waterpark Resort, offered a promotion that includes a free $40 gas card.
"The gas card wasn't the only thing, but it definitely helped the decision," said Symes, whose hometown of Burnsville, Minn., is about a 225-mile drive from the Dells. "Gas is on everybody's mind, so it does get your attention."
Most promotions have been under way for only a week or two, not enough time for companies to gauge how effective they have been.
Why use gas cards at all? Why not just take $50 off the product price - or offer customers cash instead?
In theory, shoppers should react equally to a $50 discount and a $50 gas card. But buying decisions aren't always driven by logic, Shu said.
"The more the purchase feels discretionary, like staying at a luxury hotel, the more the gas cards have impact because people can use them to justify something they might not do otherwise," she said.
Also, people mentally allocate money toward certain expenses - so when an expense decreases, the additional windfall seems even more satisfying, Shu said.
Summer promotions are nothing new to the Northern Ohio Blood Services Region of the American Red Cross. Blood donations can drop 20 percent in summer months as high school and college students scatter, so this year the group is offering summer donors the chance to win a gas card. The prizes are one $3,000 gas card and five $500 cards.
After the blood center's promotion launched last week, donations rose 6 percent over the same period last year - although the number of days available for comparison is small and it's not certain the increase is due only to the raffle. But organizers say the early numbers are encouraging.
The average price
of regular gasoline broke the $4-a-gallon barrier for the first time over the weekend.
yesterday from $3.988 a gallon on Saturday to $4.005, according to AAA and the Oil Price Information Service. The price in the Philadelphia region averages $4.077, according to AAA.
, the average is $4.436 a gallon, the highest in the country. Missourians are paying the least, at $3.802 a gallon.