Why gift cards keep growing
Gift card sales are expected to reach record levels again this holiday season and new research from the National Retail Federation (NRF) offers insight into the increased popularity of stored value products.
More than half of shoppers polled by NRF’s Gift Card Spending Survey said they will buy gift cards this holiday season because the cards allow the recipient to select their own gift. More than 25% of shoppers said gift cards are easier and faster to buy, and 3.8% said the cards help them stick to their holiday budgets.
“These days, shoppers simply love the idea of gifting someone they care about with a little ‘free money’ in the form of a gift card,” said Prosper’s Principal Analyst Pam Goodfellow. “Consumers young and old want to find the best way possible to create a happy holiday experience for their loved ones, and gift cards are a great option every time.”
Gift cards are now a go-to gift for consumers of all ages. The survey found that adults 65 and older will spend the most on gift cards, on average about $204.59. Young adults between 18-24 years old will spend the least, on average about $113.75. Additionally, men plan to spend significantly more than women on gift cards ($180.81 vs. $165.09 respectively).
According to the survey, shoppers will spend an average of $47.87 per card, up from $45.16 last year. And the average person buying gift cards will spend $172.74, up from $163.16 last year. Total spending is expected to reach $31.74 billion. In an October NRF survey, 62% of shoppers said they would like to receive a gift card, making gift cards the most requested gift item eight years in a row. Total spending on gift cards has increased 83% since NRF began tracking consumers’ intentions to buy gift cards as holiday gifts in 2003.
About 37.7% of gift card buyers will give their loved ones a gift card from a department store, and 34% will give their friends and family the gift of a meal at a restaurant, according to the NRF survey. One in five (20.6%) will pick up coffee shop gift cards, 18.1% will give the gift of entertainment, such as a movie theatre gift card, and 18.9% will give gift cards to electronics stores.