Thursday , November 23, 2017

With Gift Cards, Consumers Are Spending Much More Than the Gift Amount

Gift card recipients spend on average $38 more than the value of their gift cards, a $10 increase from 2016, says First Data Corp. in its “2017 Prepaid Consumer Insights Study” released Wednesday by the giant processor.

Based on the responses of more than 2,000 U.S. consumers, the report found that 75% overspent the value of their gift cards. A whopping 97% redeemed their gift cards.

The report also found that 44% visit a store they otherwise would not have because of a gift card, and 53% are more likely to visit a store more often because they received a gift card to the store.

Physical gift card purchases are increasing with consumers buying an average of 6.5 annually, compared with 5.9 in 2016, and 4.7 in 2014. But consumers are buying more digital gift cards too. In 2017, First Data says they will buy 6.1 digital gift cards, up from 4 in 2014.

The study also asked where consumers made their gift card purchases, with 47% saying they use a gift card mall, compared with 44% made in a retail store. In terms of sales, this is the first time gift card malls, which often are on the ends of a shopping aisle and offer gift cards from many retailers, surpassed visiting a retail store for that retailer’s gift card, First Data says.

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