Holiday spending on gift cards forecast to rise amid inflation concerns
Shoppers are shifting toward more gift card purchases as a way to deal with price increases in key categories.
Gift cards will represent 39% of total holiday budgets, up 12% over last year, according to Blackhawk Network’s (BHN) annual holiday forecast, which surveyed over 2,000 consumers. The increase comes as 72% of consumers cite inflation as a primary worry — up significantly from last year.
The survey revealed that consumers plan to purchase gift cards instead of physical gifts due to concerns about price increases in key categories, especially among younger generations. Nearly half of Gen Z and millennials (46%) plan to purchase gift cards for clothing and accessories instead of physical items due to price concerns, as well as with grocery purchases (41%), toys (32%) and electronics (31%).
“Holiday shoppers are becoming strategic in how they maintain generous traditions despite economic headwinds," said Brett Narlinger, chief revenue officer at branded payment solutions company BHN. "Rather than cutting back on gifting entirely, consumers are embracing gift cards as solutions that allow them to give meaningful presents while staying financially responsible."
AI
The findings also shows that artificial intelligence is influencing the holiday shopping journey, with consumers increasingly turning to AI tools. Sixty-eight percent of Gen Z and millennials now use AI tools for holiday shopping — an 18-point jump from last year — with 20% using it to generate creative gift ideas and get product recommendations. Gen X and baby boomers have also embraced AI assistance, with usage rising 14 percentage points to 38%.
Other highlights from the Blackhawk report are below.
- Most (77%) consumers bought holiday gifts on sale or through promotions in 2024, and shoppers plan to leverage 10 or more different types of promotional offers this season — from traditional discounts (86%) and coupons (84%), to loyalty point offers (80%), fuel discount programs (73%) and cash back apps (65%).
- Gen Z and millennials are particularly savvy deal-seekers, turning to third-party sources at significantly higher rates than older shoppers—including social media posts for deals (36%), cash back apps (28%) and deal forums (18%).
- Early shopping is also significant, with 34% of consumers planning to start their holiday shopping before November. Deals and savings rank as the number one reason consumers begin their holiday shopping.
