2015 gift card sales in the U.S. reach $130 billion, a 6% increase over 2014

2015 gift cards sales are just the beginning as gift card sales are predicted to reach $160 billion by 2018. E-gifting had the largest increase, rising to 26% in 2015, representing $7.1 billion in volume. E-gifting is also expected to support the overall payment industry growth. Long-term prospects for e-gifting remain promising as more payment services become mainstream and plastic cards make the switch to digital.


“Consumers continue to enjoy the convenience of giving and receiving gift cards in all forms,” said CEB Principal Executive Advisor Brian Riley.  “Both retailers and financial institutions have prioritized gift cards as a central to their strategies for gaining share of customers’ (increasingly digital) wallets.”

The amount of breakage (spillage), also known as unused gift card volume, continued to significantly decline, resulting in less than 1% of total volume. Regulatory action (Credit CARD act) has tightened rules on retailers, making it more difficult for stores to cancel unused cards or charge inactivity fees. This helps to prevent retailers from quickly cashing in on breakage. Customers have also caught on and appear to be finding more ways to avoid breakage. Even if there is only a small amount left on a gift card the consumers are finding a way to use them. But there is still a positive for retailers, as this usually means more lift (the amount that the customer spends over the value of the gift card)!

•Open network branded cards grew to $48 billion (up 6.7%)
•Retailer cards grew to $43 billion (up 4.9%)
•The restaurant and miscellaneous categories both showed limited growth with $19 billion and $13 billion, respectively.

Read the full press release from CEB Global, here.

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Written by Jennifer DiPietro


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TAGS:   card manufacturing, holidays, trends


The most popular gift of the season was probably made in the Twin Cities

Last-minute holiday shoppers won't find "Made in Minnesota" on a gift card they snap up in the next few days, but chances are it was.


The Twin Cities area is home to numerous gift card designers, printers and distributors, including Archway Marketing in Rogers, Diamond Graphics in Ramsey, and CPI Card Group in Roseville. One of the country’s largest gift card manufacturers, Travel Tags in Inver Grove Heights, produced 1 billion gift cards last year, more than 25 percent of the North American market.

They are satiating a shopping habit that’s as ingrained as buying a big TV on Black Friday. “Gift cards have become as universal as greeting cards, with 96 percent of Americans indicating they’ll buy at least one this year,” said Robert Passikoff, founder and president of Brand Keys, Inc.

Travel Tags — owned by Mankato businessman Glen Taylor, who also owns the Star Tribune — lists Nordstrom, Macy’s, PF Chang’s, DSW shoes, Bebe and Aeropostale as clients. “We do the production for some of the largest and most powerful brands in the world,” said Tim Lebens, vice president of sales and marketing at Travel Tags.

Besides the Inver Grove Heights facility, the company has smaller operations in Mankato, Oregon, California and Europe.

Although December is a top sales month for gift cards, Lebens said summer is the busiest for production. “We need to produce the cards three to six months ahead to allow time to get them through the merchant distribution network and into the hands of retailers,” he said.

What may seem like a quick and easy production task takes four to six weeks for most orders and eight to 10 weeks for more sophisticated designs. “Gift cards today are like a little Renoir in your hand,” said Al Vrancart, co-founder and industry adviser at International Card Manufacturers Association in New Jersey. Besides the graphic image created by the art department, the manufacturing process often includes foil, a matte or pearl finish, glitter and raised surface texture. Nordstrom has incorporated a hologram on one of its cards while Neiman Marcus’ card has a raised texture that simulates alligator skin.

“It’s a lot more complicated than it looks,” said Ken Dishno, vice president of operations at Travel Tags. If a client known for an iconic shade of red requests a gift card, he said, designers have to use a different shade of red initially because a blue-tinted laminate film that will be overlaid changes it.

Even the standard rectangular shape and PVC plastic material may be changed to suit the client. Whole Foods chose a gingerbread man shape for its holiday cards, which, instead of plastic, are made from stiff paper that’s strong enough to withstand a run through the washing machine. Target selected a holiday card in the shape of a gold metal coin.

“We are offering guests a variety of gift card options and designs this season including peppermint-scented gift cards, greeting cards paired with gift cards and gift cards that double as holiday gift tags to easily string onto presents,” Target spokeswoman Amy Joiner said.

Some of the cards are becoming collectibles. Last year Starbucks’ metal card for $450 with $400 loaded onto each card sold out online. This year it scaled back slightly to a limited edition sterling silver key chain gift card with a dusting of Swarovski crystals. The company had 43,000 made at $200 each with $50 loaded in gift card credit.

Delta Air Lines’ limited edition gift card is made of aluminum from a retired DC-9 that was flown by Allegheny Airlines, then Eastern, and Northwest Airlines before being acquired by Delta. Each of the 2,500 cards costs $250 on eBay and has $50 of value stored on it. As of last week, 123 had been sold.

Best Buy, which started replacing paper certificates with gift cards in the mid-1990s, changes its gift card designs about every two months. New this year for the holidays is the addition of a Geek Squad card. The gift card, which comes in a box with the card and a free USB vehicle charger, can be redeemed for a one-hour home visit for $100 (setup for a computer, tablet, mobile device, Blu-ray player or gaming system) or $150 (setup for TV/video or router/home Wi-Fi network).

The Richfield-based electronics retailer said that the latest technological enhancement, digital gift cards that can be redeemed on a smartphone, make up only 5 percent of its total gift card sales. That’s consistent with national figures, but digital gift card sales are expected to double by 2017, according to global management consulting firm A.T. Kearney.

Despite the lack of a physical gift to give, Best Buy’s digital cards allow for more personalization, including a written message, photo or video. There’s also an “unwrapping” feature where the gift “unwraps” after being touched or clicked.

Digital gift cards aren’t a big concern for the industry yet, said Travel Tags’ Lebens. “Digital isn’t friction-free,” he said. “In the time it takes someone to bring up an app and type in their password, I’ve already paid for my purchase with a physical card.”

Overall, gift card sales are expected to decline 3.4 percent in North America to about $26 billion this year, said Vrancart. As retailers start holiday sales earlier, last-minute gift card sales are being squeezed.

“Retailers’ early promotions and exclusive offerings have made it easier for consumers to find everything they need without having to consider raiding the gift card rack,” said Matthew Shay, president of the National Retail Federation.

But don’t expect gift cards to lose their appeal for retailers. More than $750 million in gift cards went unredeemed last year, although that number is far less since 2009 when the Credit Card Act got rid of most junk fees and expiration dates. And cards provide another lift for retailers because consumers typically spend 20 percent more than the amount on the gift card.

One advantage of paying with a gift card is speed. Gift cards will not be getting the digital chip that credit cards are because it’s not a cost-effective addition. A gift card with a magnetic stripe can cost up to 50 cents to make, depending on its design, but embedding a chip adds another $2.20 to $3.50.

“There’s no need to add the chip in a gift card,” Vrancart said. “It’s a simple transaction. You use it a few times and discard it. Too much technology is overkill.”

Read entire article at Star Tribune
Source: - December 13, 2015
Written by John Ewoldt, Star Tribune


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TAGS:   card manufacturing, Community, holidays, Star Tribune, trends


How Gift Card Consumption has Evolved with eCommerce Growth in India

eCommerce is growing at an alarming pace in India and has been making remarkable impact all over the country. India is a billion people nation with web mobile penetration of over 60%. In the next couple of years, we can see that everyone will move online for business.

A majority of our population is very young, which exhibits energy to build and adopt anything new coming their way so a new retail format is expected to have a very fast adoption rate. With the advent of m-commerce, we can see a great opportunity being placed for mobile. It allows and encourages the consumers to browse quickly, easily and purchase products on-the-go, more regularly.

It’s a strong belief that the mobile growth and with the availability of cheaper data plans across telecom brands, digital will grow and the gifting industry in India will soon skip plastic to move towards adopting digital gift cards.

Gift cards are pre-paid cards that can be used to make payments. Such cards have a validity period, which can be replenished with funds and reused within the period. Gift Cards are different from gift vouchers, which are paper-based and can be used only once, while purchasing products. Unlike gift cards, gift vouchers do not allow any partial redemption, wherein balance funds can be carried over for further purchases.

Manufacturing gift cards involve costs of plastic, magnetic strips, and card readers, however, this is changing as consumer’s demand and large retailers are moving towards digital gift cards. Digital gift card is a simple replacement of the paper/plastic gift cards, with a code. The code will be verified and the value attached to it is deducted from the digital card.

As per the stats, earlier, digital gift cards contributed to 7%; recently it has gone up to 17%. We can see the rise in digital gift cards as the consumer preferences and demand is higher for brands and stores and also allows offering a variety of gifting options. Brands like Lifestyle, Flipkart, Dominos, Tanishq are said to experience a consistent demand round the year and largely, during the festival season.

Most precisely, we can see the gift cards / digital gift cards trend booming in the West. Indians are avoiding the hassle of chasing for suitable gifts for each occasion; hence opt for gift cards. This is significantly helping the modern retail in boosting such transactions during the festive season.

Transactions through gift cards are expected to increase from 50% to 80% during October-December. With the increase in demand for gift cards, we can see the change in the Indian consumers’ opinions and preferences. In addition to this, the retailers are too comfortable with the homecoming of the gifts card as the sales are aiming to increase the billing value for transactions paid through gift cards.

The online gifting space, like any other industry, has certain challenges to face. The assurance of same day or fix date delivery, for example, throws up logistical issues that any eCommerce company/s face in terms of manpower and delivery transport etc. Hence, it is imperative for any portals to come up with variety that surprises the buyer as well as the receiver of the gift. In the hectic schedules, a beautifully gift wrapped present can rejuvenate any relation or help maintain the existing ones. The demand for gifts is sure to continue stimulating the online gifting segment significantly.

Online and offline retailers now should collectively view gifting as an opportunity to reach out to their target consumers and promote their brands at almost no extra cost with the help of social media. This social gifting concept is widespread in foreign countries. Considering the digital growth in India, we can see that social gifting will soon be introduced.

Post m-commerce, social commerce will speed up and more people will be connected via social media websites. Retailers will have a major advantage as gifting will give them the chance to engage with its targeted consumers and get timely feedback.


Article by Firoz Khan, Co-founder and CEO, Gift Cards India

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TAGS:   card manufacturing, card services, Global, trends