Gift-Card Purchases Double

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Gift-Card Purchases Double

DENVER, Colo. -- Twice as many Americans purchased a gift card in 2003 as did in the previous year, according to a national study commissioned by ValueLink, the gift and spending card service of First Data Corp.

Forty-five percent of the adult U.S. population, approximately 97 million people, purchased a gift card in the previous 12 months, vs. just 23 percent in a similar survey conducted in August 2002, the company said.

Consumer awareness of gift cards has reached 92 percent, a 13-percent increase over 2002, according to results of the survey of 1,023 adults. Nearly six in every 10 adults (59 percent) reported purchasing and/or receiving a gift card in the past year, a 22-percent increase over 2002

"The industry's continued growth is being fueled by the creative and diverse uses of gift and spending cards, which in turn is creating a very strong consumer product cycle," said Kevin Harte, senior vice president and general manager of ValueLink, based here.

Consumers increased the number of cards they purchased to an average 5.6 cards per year, a one-card increase over the previous year, survey results revealed. Households with teenagers purchased nearly two cards over the average. Overall, consumers spent an average $197 on their purchased cards during the previous year.

"It is impressive to see such tremendous growth in the awareness and consumer adoption of a still relatively young product," said Karen Larsen, ValueLink's vice president of product marketing and evolution. "Consumers have welcomed gift cards as a part of their mainstream retail experience."

Only 8 percent of consumers said they purchased a card for their own use during the previous year, compared to 12 percent in 2002. However, 60 percent of those consumers had reloaded value on a previously purchased card. This indicates a strong preference for the spending card application, which continues to grow in popularity for frequently purchased services or items such as coffee or fast food products, according to Larsen.

Employed, college-educated women living in metro area households with at least three members continue to lead the demographic breakdown of gift card purchasers. There were interesting gender differences:
* Men load a higher average dollar value on cards, $48 per card versus $37 per card for women.
* More than two-thirds of the women surveyed give gift cards as a primary gift, compared to 57 percent of men.
* Nearly 30 percent of males choose to give a gift card as a secondary gift, compared to 16 percent of women.

Other key research findings include:
* Purchasers and receivers rate their overall satisfaction with gift cards as 9 on a scale of 1 to 10, with 10 being "extremely satisfied" and 1 being "not at all satisfied."
* 79 percent of consumers purchased gift cards in person at a store location. Another 6 percent made the purchase on the Internet/merchant Web site and 4 percent via the telephone.

Compared to the average $197 spent on gift cards in the previous year, middle-age purchasers, age 45 to 54, average $235 per year and purchasers age 55 to 64 average $241 per year.

Nearly 50 percent of all purchased cards had a $20 to 25 value.
* The growth rate for reloading gift cards has more than doubled -- 20 percent to 42 percent growth -- between 2001 and 2003.
* 54 percent of consumers spend the initial value of their gift card within one month.
* 61 percent of consumers spend the initial value of their gift card in the first visit.
* 56 percent of consumers spend more than the initial value of the card.