Gift Card Sales Predicted to Spike This Season
WASHINGTON, D.C. — The trend of giving gift cards continues to grow, according to the Retail Gift Card Association (RGCA).
New research from the association found that more than 70 percent of shoppers will be giving gift cards this spring and summer during a number of celebrations, including birthdays, Father’s Day, graduation and weddings. It also found that 95 percent of consumers are hoping to receive gift cards this spring and summer.
Through an online survey of more than 1,000 U.S. consumers on their use of gift cards and habits for giving and receiving them, RGCA explored shoppers’ preferences for physical gift cards vs. newer gift options like electronic gift cards (e-gift cards), which can be redeemed online or via mobile device through a virtual code.
RGCA’s six key findings include:
- Gift cards’ popularity continues to grow. In 2014, two-thirds of shoppers planned to buy gift cards during the summer and spring gift-giving season. That number has grown to more than 70 percent in 2015. Additionally, 82 percent of shoppers plan to give the same or more gift cards this spring and summer gift-giving season vs. last year. The most popular occasions for giving a gift card include birthdays (55 percent), graduations (21 percent), Father’s Day (16 percent) and weddings (12 percent).
- Omnichannel flexibility is a determining factor. As consumer demand for omnichannel connectivity across all retail channels continues to grow, 80 percent of gift givers want their recipients to have the option of redeeming gift cards online or in person, and 87 percent of recipients want to be able to redeem through either channel they choose.
- Awareness of e-gift cards is growing. Twenty-seven percent of recipients have received e-gift cards, a 5 percent increase from last holiday season. The main reasons why shoppers want to give e-gift cards include: the giver needs the gift to get there right away (32 percent), the giver is giving to someone younger who lives a digital lifestyle (28 percent), or the giver is avoiding shopping in crowds (18 percent). Additionally, 40 percent of shoppers say they would consider buying them as gifts this spring and summer.
- Physical gift cards are still the favorite. Most shoppers (56 percent) plan to give physical gift cards exclusively, with the most common denomination between $25 and $50. Gift givers choose to give physical gift cards for reasons like preferring to give a physical packaged gift, the recipient doesn’t have a smartphone, or because the gift giver simply prefers physical gift cards to e-gift cards.
- Gift cards meet different needs. The most popular types of gift cards for givers and recipients alike include restaurants (47 percent), department stores (30 percent) and online marketplaces like Amazon (29 percent).
- Consumers are creative with unused gift cards. Fifty-two percent of gift card recipients will try to find something to buy at a store that they typically do not shop at if they received a gift card there, and 42 percent will “regift” the card to someone else. An alternative and emerging trend among recipients is using exchange websites to exchange gift cards they received and do not want to use (64 percent). However, only a small amount of recipients have used such services (6 percent).
“Large-scale retail trends, like movement towards omnichannel and increasing awareness of digital offerings, continue to be reflected in consumers’ use of gift cards,” said Timm Walsh, chairman of the board, RGCA. “And our biannual research has confirmed again that shoppers still consider gift cards to be safe, preferred gift choices. This spring and summer season should bring increased sales of this favored gift product.”
Washington, D.C.-based RGCA promotes and enhances the use of retail gift cards through a number of retail channels including restaurants, general merchandise, apparel, sporting and leisure.