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An Economic Stimulus Plan For Coronavirus

The Card A Hero plan is as simple as it is effective: citizens are urged to purchase gift cards to restaurants, bars, movie theaters, and other hard-hit businesses, then give them to those working to fight Coronavirus. The aim of the initiative is to both immediately provide funds to those businesses that are hardest hit by giving them cash today in exchange for a gift card for future purchases, and to extend a gesture of gratitude to the under-recognized heroes of this crisis.

Card A Hero Press Release

Our Commentary on Coronavirus et al.

Step 1: Buy Gift Cards

Buy git cards in whatever amount you would like to restaurants, bars, movie theaters, hotels, theme parks, or any other business in the hospitality or entertainment sector that is facing a sharp decline in customers due to Coronavirus. The goal is to put cash in the hands of businesses today so that they can use the money to meet short-term obligations including paying to keep their employees during times of decreased activity.

Step 2: Give To A Hero

Give the gift cards to a hero in your local community. Who qualifies as a hero? Anyone who is helping to stop the spread of Coronavirus. Ideally, these will be people who are not even getting the recognition they otherwise deserve for their efforts.

Great examples of heroes include hospital workers, support staff at nursing homes and assisted living facilities, first responders (police, firefighters, EMTs), research scientists working on the Coronavirus vaccine…

That's All It Takes.

Frequently Asked Questions

What exactly do I need to do in order to participate?

Two things: (1) Buy a gift card to a hospitality or entertainment business; then (2) Gift it to someone who you consider to be a hero of the Coronavirus plague. That is it. If you want to do more, encourage others to do the same.

Who qualifies as a hero?

Anyone who is working to contain the spread of Coronavirus. As far as we are concerned, this is a very broad category and is open to interpretation based upon who you think is a hero. For some people it may be the person who is caring for a loved one or for others it may be the overworked gate attendant at the airport trying to make sure that everyone can get home. We leave this determination entirely up to you.

Why will this help?

Economists call the concept deferred consumption, which is paying for something now (thus transferring wealth to the seller) without consuming the good (meaning the seller does not incur any cost today). This process works like a loan to the business selling the gift card because they get to use the money today and they only have to pay it back in the form of goods and services in the future.

The second benefit of this type of plan is that it rewards those who are contributing to the solution to the Coronavirus problem, which is always useful.

Does it matter if the gift card is for a local business or a national chain?

Not really. The important thing is that the gift cards are for businesses that are experiencing severe downturns. For example a movie theater is a great choice because people are not going to see movies in theaters during the outbreak. Netflix would be a bad choice since they are not going to be affected since people watch their streaming service at home.

If given the choice between supporting a local business and a national chain though, local businesses are less likely to be able to weather the downturn as they generally have a smaller resource base.

Why give the gift cards to heroes versus our friends and family?

Giving them to friends and family would be fine and is certainly a nice thing to do and certainly fits most of the objectives of the plan. The Card A Hero plan was designed as a way to also give back to those who are working to battle the pandemic. Our thought is that they are likely tired, worn out and when this is all over could use some well deserved rest and relaxation. What could be better than to give them a prepaid experience to look forward to in gratitude for all of their efforts?

How do I know if a hospitality or entertainment business has been affected by Coronavirus?

Are fewer people spending visiting the hospitality or entertainment business now because of Coronavirus? If yes, then they are probably suffering from a decrease in revenue and would be a good choice.

Why is a gift card better than just giving money away?

The advantage of a gift card is that it has to be spent at a particular business which means you can target local businesses who are affected. Additionally, by providing a fixed gift card amount, the recipient (in this case the hero) will potentially be encouraged to spend more at the business.

How many times have you received a gift card for an amount like $25 and gone into a business to spend it and ended up spending more than $25? For the business, this will allow them to bring in revenue when the card is purchased AND potentially more revenue when it is actually used.

Isn’t the government already doing enough to stimulate the economy?

Card A Hero is intended to be an iterative measure that will work in conjunction with the stimulus programs being considered and enacted by Federal, State and Local governments.  Although the formal stimulus programs (including a waiver of student loan interest, disaster relief loans and quantitative easing) are vital to adding liquidity to the markets and restoring confidence in the economy, these programs do not provide any means for individuals to get involved and do not have the added benefit of an opportunity to show our collective thanks for those working to stop the pandemic.

How much should I spend on gift cards?

Any amount you want that makes sense for you personally. As far as the denomination of gift cards, it is best to buy more gift cards of a relatively low denomination than fewer gift cards of a higher denomination. This is because more gift cards will allow them to be spread further through the economy and will also increase the likelihood that the person spending the gift card will make additional purchases beyond the value of the gift card (providing even more revenue to the businesses).

Why buy the gift cards now versus just spending money later?

Affected businesses need money today to meet their short-term obligations during the downturn from the Coronavirus. When everything returns back to normal, their revenue will slowly start to pick back up again, but they cannot replace they days that they were unable to sell. Buying gift cards today has the effect of giving them an interest free loan today on the sale of goods in the future.

How do I go about giving them the gift card?

You can either hand it to someone and tell them what it is for, or you can drop it off at a place where heroes tend to work (hospitals, nursing homes, fire departments, etc) or you could even mail it to them. It would be nice if you enclosed a small note telling them that you hope they enjoy the goods or services after the Coronavirus outbreak is over as a means of your gratitude for all that they are doing to keep the nation safe.

Do you have a hashtag?

Every good plan has a hashtag. Our is #cardahero

Why is Research & Innovation involved in this?

As consultants, we help our clients face their toughest challenges. Today, we see the American economy as our client. We recognize the need for a direct action stimulus program and wanted to help spread the word on how we think citizens can best support two sectors which are likely to experience a significant short-term decline due to Coronavirus. Our view is that the effects of Coronavirus in and of themselves will not cause a recession; but a significant enough lack of consumer spending could very well lead to one. We are grateful to have an opportunity to share our perspective and contribute to a culture of solutions.

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