I think you’ve got it in one - they want us to buy goodybags.
This way they get a better revenue stream and so by making the PAYG rates that bit more “expensive” there is more incentive to buy a bag. But that is not surprising they are, after all, a business that wants to make money so that they can carry on being a viable business.
However I would dispute your statement that
because we all have a choice.
For a start we can leave giffgaff whenever we like with no notice.
But also we can make use of the service to suit our own circumstances.
For example my husband doesn’t buy goodybags because not only is he a very light user but he doesn’t have a smart phone so his monthly spend using PAYG is less than £6 per month.
However when he was recently in hospital and was making more and longer calls he bought a one-off bag thus actually saving himself money for that particular month.
But overall he finds giffgaff very good value, indeed I think he has only topped up £40 since joining in 2014.
Whereas I do use a goodybags regularly because I have a smart phone and make more use of my phone generally. However I haven’t gone down the Recurring Goodybag route as I want to be in control of what I buy and when.
So there are times when I let my bag expire and don’t buy another one for several days if I know I am not going out (so won’t need data) and have no calls to make. I will then buy the next bag when I really need it.
So it is not that people are being ripped off it is more that they are not taking advantage of the self management aspects that you get with giffgaff.