Millennials Are Buying More Gift Cards Than Ever - For Themselves

New data suggests that they are buying more gift cards than ever before but then turning around the spending those cards on themselves.


Millennials and women are fueling a surge in sales of retailer-specific gift cards, but it seems that they are purchasing more of these gift cards for themselves than to give away to others, as more and more retailers and brands entice consumers with loyalty rewards when they purchase these types of gift cards through apps.

Mercator Advisory Group surveyed 3,009 U.S. adults in June of this year to examine the shift in gift card consumers to prepaid and rechargeable cards issued directly from retailers.

The study found that these types of consumers are steadily growing. Of those surveyed, 63 percent bought these types of cards this year, compared to 61 percent in 2015 and 56 percent in 2014.

Retailer-specific cards are now the most popular types of gift cards, too, with 45 percent of U.S. adults having purchased some form of them this year, up from 41 percent in 2015.

Millennials, specifically those between the ages of 25 and 34, seem to be fueling the rise in the purchase of retailer-specific gift cards, as three out of every five of the young adults surveyed reported buying at least one in the past year — an increase from 2015’s survey, as only about half of millennials reported buying the cards then.

Interestingly enough, with the rise of smartphones, eCommerce and the increasing popularity of retailer-specific gift cards, these types of cards are beginning to function more as a form of currency themselves than as a gift-giving method.

“As retailers introduce new mobile apps, often with mobile payment options that include their retailer prepaid cards, young adults begin to buy retailers cards for their own use, so the cards are becoming a primary payment tool and not just used as gifts,” according to the study.

Women also seem more likely to purchase retailer-specific gift cards than their male counterparts, with 49 percent reporting they purchased at least one this year, compared to only about 40 percent of men. Still, Mercator Advisory Group did note that the number of men purchasing retailer-specific gift cards has “grown steadily” since the firm began tracking the number in 2013.

Also spurring the rise of retailer-specific gift cards, many of the retailer apps’ digital loyalty programs offer consumers free money, in-store points or deals for re-upping or refilling the gift cards, which many millennials seem to be using as a way to stretch their dollars in stores, while push notifications are easily used to remind the consumer that their card is empty or that they might be missing out on a hot, new deal.

“Retailers are introducing more mobile-based apps and offers when using their loyalty and prepaid programs, which may be fueling this growth in retailer gift card purchases,” according to Karen Augustine, manager of Primary Data at Mercator Advisory Group and the author of the report. “Young adults continue to lead this mobile revolution and growing use of prepaid cards as a money management tool.”

Gift cards, thanks in large part to retailer-specific incentives and loyalty rewards programs designed to entice customers to spend more of their dollars on that specific brand or retailer, appear to be enticing consumers to do just that in greater numbers than ever before.

And the gift card seems to be shifting from a token given to friends or families around the holidays or out of appreciation into a practical form of currency for many of today’s savvier young shoppers.


Source: - September 8, 2016

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TAGS:   card services, Millennials, trends


Congratulations to Glen Taylor & Deb Taylor Award Recipients!

We are pleased to announce that Virginia (Ginny) Jordan, Qualtiy Assurance Manager for Card Fulfillment Services, and Tetyana Opshytosh, Sr. Production Equipment Operator for Western Graphics & Data are both recipients of the 2015 Glen Taylor and Deb Taylor Award! Nominated by their business leaders, these employees have gone above and beyond to contribute exceptional value to their organizations.




"Each year we hear of employees across our family of companies who go above and beyond our expectations - and these individuals demonstrate initiative that improves our ability to serve customers, product product, or achieve our goals," shared Deb Taylor. "It is in recognition of those individuals' efforts we have decided to establish these awards." 

Congratulations to all recipients within the Taylor family of companies!

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Gift Cards’ Appeal to Millennials

Gift cards are exceedingly popular with Millennials, as new research from the Wharton School’s Baker Retailing Center and The NPD Group found. Here is fresh insight as to why:

A study on generational shopping behavior by the Wharton School’s Baker Retailing Center and The NPD Group found that, based on customer receipts, gift cards are particularly popular with Millennials. Their share of wallet of gift cards is higher than that of other age groups at mass merchants, convenience stores, and warehouse clubs.

What could be driving Millennials’ preference for gift cards? Making up one-third of the U.S. population, Millennials are the largest and youngest shopper generation and will continue to be an important segment for gift card purchases. Thus, understanding the drivers of Millennials’ liking of gift cards may be useful.

To be sure, gift cards have become more popular with consumers in general. Sales in the U.S. have grown gradually over the past several years, reaching record sales of an estimated $130 billion last year, an increase of more than six percent from 2014, according to an annual study by CEB. For nine years in a row, gift cards were the most requested gift during this past holiday season, as a survey by the National Retail Federation (NRF) found, and almost three-quarters of respondents were planning to buy at least one gift card. One in six Americans received a Starbucks gift card during the 2015 holiday, an increase from one in seven in 2014. Further growth is expected, which retailers will welcome since gift cards generate store traffic, online and offline, including from new customers. Plus, most gift card users spend above the card’s face value.

This preference for gift cards as well as cash as gifts — a 2014 holiday survey by Deloitte found cash to be the second-most desired gift (35%), closely trailing gift cards (37%) — should also please economists since gift cards reduce or eliminate the loss that occurs when people give gifts that cost more than recipients value them. Joel Waldfogel coined the term “deadweight loss of Christmas” for this economic waste.

Continue reading for a list of factors that may contribute to gift cards' popularity with Millennials.

Denise Dahlhoff, PhD, is the Research Director of the Wharton School’s Baker Retailing Center, a research center in the retail, fashion, and e-commerce space.


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TAGS:   card services, Gift Card Services, trends