Survey: Popularity Propels Gift Cards into Consumer Mainstream

Some 59% of adults, or an estimated 131 million people?either bought or received a gift card over the year from August 2004 to August 2005, a study released today reveals. In part, this has meant that the electronic stored value cards are gaining popularity as gifts for a more diverse array of occasions. While some 54% of those who purchased a gift card in the past 12 months bought one as a Christmas present, weddings (10%) and anniversaries (12%) hit double digits as well. Meanwhile, buyers are getting the cards from a greater variety of merchants, with major retailers accounting for 70% of purchases, restaurants 12%, food stores 6%, and entertainment-related businesses 5%. “For the American consumer, gift cards are now planned purchases that have become an integral part of our holiday gift giving,” said Ed Labry, president of First Data Corp.'s First Data Prepaid Services, in a statement. “But, just as important, they are a part of our year-round gift gving [and] general purpose retail activity.” Still, the survey, which has been conducted annually since 2001 by ValueLink, a unit of First Data Prepaid Services, shows some slight declines from last year, when 64% of adults reported having bought or received a card in the prior 12 months. The average number of cards purchased, 6.2, is down from 6.9 in the 2004 study, as is the average value of each card, $44 vs. $59. A statement released by ValueLink with the survey says the fluctuation in value is attributable to cards now being available in a wider range of places, many of them featuring lower-ticket goods. The survey also shows that more than half of respondents spent more than the initial value on cards they received. Half exhausted the value of their cards in one trip, with another 21% doing so within two trips. Some 24% of those who received a gift card in the previous 12 months used up the value of card within one week of receiving it. On the buying side, 84% of those who bought gift cards say they went into a store intending to buy one, with 13% making the decision only after entering the store. Just over a quarter said they bought cards from stores that offered gift cards from several merchants. And 61% say they are likely to buy a gift card in the next 12 months, with the average number coming in at 5.5, up by 1.5 from 2001. The “Consumer Insights” survey, conducted Aug. 3 to Aug. 7, canvassed 1,003 persons 18 and older. Data were collected by TNS Financial Services Group.