Gift card spending has grown from $40 billion in 2003 to over $100 billion in 2014, says the Mercator Advisory Group. According to the National Retail Federation’s Monthly Consumer Survey, they have topped the list of most requested gifts for the last eight years. In a newly published whitepaper, Blackhawk Network breaks down the process of gift giving and reveals why gift cards continue to experience such rapid growth. What motivates people to buy them and so eagerly want to receive them?
THE GROWTH OF GIFT CARDS
One of the most popular forms of prepaid products – gift cards – debuted in the 1990s and have enjoyed significant growth over the last decade. As one of the most requested gifts, their growth is expected to continue over the next several years. (see below: Gift Card Projected Growth 2003-2017). Gift cards come in two forms: open-loop gift cards, which carry the brand of a major payment system like Visa, MasterCard or American Express, and closed-loop cards, which are redeemable only at specific retailers.
Research on what makes gift cards so popular is lacking, although according to global prepaid network, Blackhawk Network, there are many studies that detail the specifics of the number, type, occasion and purchase locations related to gift card purchase.
But understanding why people give gift cards can help merchants, program managers and issuers tailor marketing messages and programs to increase sales. Blackhawk first conducted a study in 2008 to investigate shoppers’ motivations for gift card purchases in which consumers were clustered into groups based on their psychological motivations toward gift cards. This study was recently updated to reflect the changes since 2008 and have some surprising findings.
Blackhawk’s survey sample included 3,050 gift card buyers in the U.S., and of the total respondents, 63 percent had purchased at least one gift card in the last year. Respondents were asked about their gift card buying habits, as well as overall attitudes about shopping, online activity, and gift giving and gift cards.
Source: PYMNTS.com, read entire article here.
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