Americans love giving and receiving gift cards, whether for their favorite restaurant, shop, or even home improvement store.
These payments tools are always in demand and present retailers with significant sales opportunities, as most consumers dont require a sale or promotion to purchase one.
The Retail Gift Card Association (RGCA) recently completed its biannual survey of 1,100 consumers to better understand their use of gift cards, preferences for giving and spending the cards, and willingness to embrace new gifting options like e-codes.
Overall, we found that convenience and choice make gift cards extremely popular among consumers. In the past year alone, 77% of consumers have given a gift card and 90% have received at least one. Additionally, shoppers are savvy when redeeming gift cards. Our results indicated that 74% of shoppers will wait for a sale or promotion before redeeming their cards.
From our research, we also learned that consumers value choice; the number one reason shoppers like to give or receive gift cards is that they allow the end users to purchase what they want. Gift cards are also great for group gifts, with 65% of consumers preferring the convenience of gift cards when giving a gift from a group.
Additionally, the degree to which gift card sales deliver benefits to retailers is high, especially since 72% of consumers report shopping for themselves when going to a store or website to purchase a gift card. Furthermore, 45% of shoppers will spend more than the value of a gift card when it is redeemed.
However, we found that mobile gift cards and e-code payments options are still emerging in popularity. Fifty-four percent of consumers had not heard of mobile gift cards or e-codes and only 17% were very comfortable using them. Yet 62% of respondents who choose mobile/e-code gift cards do so when they need the gift to get to the recipient right away. Although mobile gift cards and e-codes are not yet widely used by consumers, the adoption of these technologies is expected to continue to rise into the future.
While gift cards provide valuable choice for consumers, retailer benefits are also high. With the increasing popularity of gift cards, and expected growth of mobile and e-code gifts in the future, we strongly encourage merchants to ramp up their marketing and sales efforts in support of these payments tools, especially leading up to the oncoming holiday season.
Mary Donovan is the Executive Director of the Retail Gift Card Association (RGCA).