Consumers bought an average of 0.54 network-branded gift cards per person during the 2007 holiday season and plan to buy 1.28 cards per person during the corresponding period this year, according to the Network Branded Prepaid Card Association.
Changing attitudes about gift cards help drive the growth, says Dan Horne, associate professor of marketing at Providence College, who conducted a consumer survey for the association.

Asked if network-branded gift cards are better than traditional gifts, 41.6% of survey respondents said they "mostly agree" or "strongly agree," says Horne.
The survey results show gift recipients no longer view gift cards as a gift one gives when one cannot think of something better, he says.
"The most surprising thing to me is how many of these things are given within the immediate family," Horne says. Almost half, 49%, of the respondents said they received cards from family members.
"Gift certificates and cards have always been given to somebody outside who [the gift giver] didn't know well–the kids' teachers, the milkman," Horne says.

Gift cards from specific stores remain popular for consumers wanting to give a specific gift while still giving a gift recipient choices, Horne observes.
For example, consumers who believe coffee is the perfect gift for a friend or family member might choose to give a Starbucks gift card, he says.
Horne surveyed 8,234 consumers and found that 68.9% received gift cards. In that group 2,380 respondents said they received a network-branded prepaid card. From that, the association estimates 28.9% of the population received network-branded gift cards during the 2007 holiday season. Gift givers loaded an average of $116 onto the cards.

Horne conducted the survey in February so consumers would have had time to redeem their cards, and he found they were redeeming them quickly. Only 8.6% of respondents waited longer than a month to use the cards.
The troubled economy may lead consumers to spend the cards on necessities, Horne says. In other cases, the cards represent consumers' only opportunity to treat themselves.

"If times are good, people aren't in any hurry to redeem gift cards," Horne says. " In times like now, people don't want the resources sitting on the card."
Gift cards offer another benefit that a traditional gift does not–a ticket to shop, Horne says.
"People love to shop; it's America's favorite pastime," Horne says.
Asked whether they agreed with the statement "I enjoyed thinking about what I would buy with the network branded gift card," 73.5% of respondents said they agree or strongly agree.

The same ticket to shop also relieves consumers' guilt about spending money in uncertain economic times, Horne says.
Gift cards also can designate funds for gifts that consumers can buy for themselves, he says.
"They are more likely to go out and do some guilt-free shopping," he says.
Overall, recipients responding to the survey said they understand the terms and conditions of the cards, with 59% agreeing or strongly agreeing with the statement "I fully understood the terms and conditions of the network-branded gift card."

Most recipients also agreed or strongly agreed with the statement "I trusted that the network-branded gift card's terms and conditions would be fair." About 8% of respondents said they had problems making payments with network-branded gift cards, and 65.7% of those who had problems said the problems were resolved to their satisfaction.

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