For the thirteenth year in a row, First Data has commissioned a comprehensive study of U.S. consumers regarding gift cards. For the first time, this study not only sought to measure sales of plastic gift cards, but also virtual e-gift cards as well as consumer attitudes and behavior. This valuable research also reveals changes in usage and consumer perceptions by providing comparisons with similar research done in 2013.
Over the past year, the widespread adoption of mobile technology has triggered a fundamental shift in how people interact with gift cards. With apps that help people connect with friends, listen to music and find their way home, consumers are relying on their mobile devices in virtually every aspect of their personal and professional lives. And, as this year’s Consumer Insights Study reveals, the same holds true when it comes to purchasing, receiving and managing their gift cards.
Online surveys were nationally distributed to 3,724 U.S. consumers over the age of eighteen
2,371 respondents were screened to have purchased or received closed-loop plastic or virtual cards in the past 12 months
Surveys were conducted in September 2014
Data from both surveys was weighted to correspond to census distributions
81% of respondents said they intend to purchase the same, or more, plastic gift cards in 2014 with 20% saying they intend to increase the number of cards. 84% of respondents said they plan to purchase the same or more e-gift cards than last year with 33% said they plan to increase the number of purchases.
Compared to 2013, how much would you say you are purchasing?Respondents who purchased e-gift gift cards 511 respondents in 2014
Compared to 2013, how much would you say you are purchasing?Respondents who purchased physical gift cards 1,089 respondents in 2014
Respondents who receive either a plastic or a virtual gift card said that they spent an average of $23.41 beyond the original value of the gift card. This is an increase from $20.79 in 2012. Additionally, 51% of respondents said that receiving a gift card prompted them to visit a store more often than they would have otherwise.
On average, about how much more did you spend beyond the original value of the single merchant gift card(s) you received in the last 12 months?
In the past 12 months, has receiving a gift card prompted you to visit a store more often than you would have otherwise?
Compared to 2013, respondents are increasingly choosing to go online to purchase gift cards. Online purchases of gift cards increased substantially from 26% in 2013 to 34% in 2014, while on-premise purchases in store, at restaurant or entertainment locations decreased dramatically from 51% in 2013 to just 44% in 2014. Purchases of gift cards using a social networking site such as Facebook increased from 8% in 2013 to 13% in 2014. The percentage of respondents using an app, a new category, was 13%.
Incentives, loyalty and rewards drive sales and 32% of respondents noted that even though they were not planning on making a purchase at a particular store, they did so because of an incentive being offered. 40% of respondents said they ended up spending more than originally planned because of an incentive being offered. Respondents also noted that on average they had purchased 2 cards in the past twelve months because of loyalty/rewards points being offered.
68% of respondents have never reloaded a gift card. Respondents reasons for reloading vary. Over 50% who reload make additional purchases using their gift card. Additional reasons include earning loyalty or rewards and to receiving a discount. Budgeting and money management continue to be strong reasons to reload as well as the convenience of not having to carry cash.
As mobile technology continues to blur the lines between our business and social lives, consumers are becoming increasingly more reliant on their mobile devices. In fact, 55% of consumers said they are interested in using an app to store their gift card information on their mobile phones, which is up from 51% in 2013. 58% of respondents said they would prefer to use one app to store multiple merchant cards rather than using separate apps for each merchant.
Given the proven effectiveness of gift card programs and their proven ability to attract new customers, build brand awareness and drive incremental revenue driving incremental revenue, it’s no surprise that most merchants have robust prepaid programs in place. In order to maximize the success of these programs, merchants must continue to innovate and evolve their efficacy to keep pace with consumer trends and new technologies.