Consumer Payment Card News

Gift Card Power

Retailer-issued gift cards are delivering solid results as Starbucks reports that its gift cards made up more than 11% of total sales in the first three months of this year. Also, Shell Oil recently noted that its gift card program delivered about $60 million in new sales to the company last year. During the first quarter, Starbucks revenues from its cards were about $138 million, up from $90 million in the same quarter a year earlier. Total revenues for Starbucks during the first three months of this year were approximately $1.2 billion. Last year, the Shell gift card program generated more than $70 million in sales. Shell says about 85% of those sales were categorized as incremental volume. Shell recently beefed-up its gift card program and expects sales to increase by 12% to 15% in 2004. Overall, gift card dollar volume in the USA was about $45 billion last year, a 50% gain over 2002, and is now projected to hit $90 billion by 2007.

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