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The percentage of consumers purchasing gift cards has gone up and is expected to increase yet more this year, finds a new report Bank of America Corp. commissioned from TSG, a payments advisory firm.
The report found that 38% of respondents purchased a digital gift card in 2024, up from 32% in 2023, and 68% bought a physical gift card last year, up from 63% in 2023. In the past year, 81% of consumers purchased a gift card, up 6% year-over-year, the report says. TSG and BofA surveyed 1,005 U.S. consumers in March.
Gift cards can be a good reason for a consumer to try a new business, says Kelly Prange, senior research analyst at Omaha, Neb.-based TSG. “A majority of consumers will try purchasing from a new business because of a gift card they received,” Prange says. The data show that 57% of consumers would try a new business because of a gift card, up 8% year-over-year.
Ninety-two percent of consumers will spend at least as much as their gift cards contain and 43% will spend more than the amount loaded onto the gift card. Another 7% will spend much more, Prange says.
Acquirers can aid merchants with gift card programs by helping them prepare for digital gift cards if the merchant is not already offering them, Prange says. “Digital gift cards are becoming more popular, especially amongst younger consumers and last-minute shoppers,” she says. “The immediacy of a digital gift card appeals to these demographics.” Prange also advises that merchants should be ready to accept the cards.
The TSG/BofA data found that physical gift card purchases by Millennials, those born between 1981 and 1996, increased 10% in 2024 over the prior year and they made 3% more digital gift card purchases in that period. Generation X, born between 1965 and 1980, made 13% more physical gift card purchases and 9% more of digital gift cards in that year-over-year period. More consumers also received a gift card in 2024 over 2023, with 73% doing so last year versus 70%.
With the fourth-quarter shopping season approaching—it’s 47 days until Oct. 1—merchants can expect consumers to spend more on gift cards than they did in the same quarter last year. The report shows that 46% of Millennials intend to spend more on gift cards this year, with 38% of Gen Z, those born from 1997 to 2012, doing so, followed by Gen X, 20%, Baby Boomers, 11%, and the Silent Generation, 6%. Overall, 23% of consumers plan to spend more on gift cards this year than last, a 4% increase year-over-year.
