Consumer Payment Card News

Gift Cards

Six out of ten Americans are into gift cards which are poised to take a bigger bite of holiday giving this year. A new survey has found that an estimated 131 million people either purchased or received a gift card in the previous 12 months. Although birthdays continue to be the most common occasion for giving a gift card (78%), gift cards given as wedding and baby gifts more than tripled since 2001 and gift cards given as anniversary and graduation gifts have quadrupled over the same period. Christmas gift card giving increased from 23% to 56% from 2001 to 2005. The annual gift card survey by First Data Prepaid Services’ ValueLink also found that the average number of gift cards purchased declined slightly from 6.9 cards last year to 6.2 cards in 2005. The research determined that the average value of gift cards purchased was $59 in 2004 and $44 this year. The average spent on all gift cards in the previous year declined slightly from $247 to $228 this year. ValueLink says 56% of gift cardholders spend more than initial value of gift card. While major retailers continue to enjoy a 70% share of gift card purchases, restaurants accounted for 12% of gift card purchases, compared to 5% two years ago. Food stores accounted for another 6% of gift card sales in 2005 while entertainment-based businesses accounted for 5%.

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