Despite being criticized as being impersonal gift options, gift cards continue to rise in popularity.
In fact, gifts care are increasingly expected and eagerly used, especially among "older" millennial adults, according to “Prepaid and Gift Cards in the U.S., 5th Edition,” a report from market research firm Packaged Facts.
Adults across the United States spent $46 billion on gift cards in the last 12 months. Of this amount, consumers spent $28 billion on gift cards for others, and they spent $11 billion on gift cards they kept for themselves. Consumers also received $7 billion worth of gift cards from their employers, data showed.
As expected, Christmas reigns as the largest gift card giving occasion by dollar value, with consumers spending more than $9 billion on gift cards for others, accounting for 33% of gift card spend.
Birthdays followed, with almost $7 billion spent on gift cards as birthday gifts. Another 26% of spending on others falls outside of holidays, with giving tied to "doing something nice," "rewarding someone," and “saying thank you,” the report said.
In terms of dollars and percentages, 25-34 year-olds are heavy gift card givers, spending more than $7 billion on others (26% of the total), while 18-24 year-olds spend the least. Adults aged 35-44 also account for a disproportionate share of gift card spending on others ($6 billion).
Income also translates to gift card giving spend. For example, those with $100,000+ household (HH) incomes comprised 29% of survey respondents but 47% of spend ($13 billion), data revealed.
When it comes to self-gifting, gift card spend by age narrows, albeit with 25-34 year-olds and 35-44 year-olds still spend the most (roughly $3 billion each). Meanwhile, those with $100,000+ HH incomes comprised 48% of spend (more than $5 billion), the report said.