Gift Cards Prompt Larger Purchases, Says First Data

The average consumer spent $38 more than the value on their gift card, up $10 from 2016, according to First Data’s annual “U.S. Prepaid Consumer Insights Study.” Based on the responses of more than 2,000 U.S. consumers, the study also found that 44 percent of consumers visit a store they would not have visited otherwise because of a gift card, and 53 percent are likely to visit a store more often as the result of receiving one.

The majority of millennial consumers (55 percent) reported visiting a store they would not have visited otherwise because of a gift card they received, compared to just 43 percent of Generation-X responders and 41 percent of baby boomers. Millennials (64 percent) are also more likely to visit a store more often thanks to gift cards than Gen-Xers (54 percent) or baby boomers (41 percent).

“There is a tremendous opportunity for businesses to drive sales and build brand loyalty by implementing gift card strategies and solutions,” said Dom Morea, senior vice president, head of gift solutions, at First Data. “From employee rewards and customer service programs to social media promotions and marketing campaigns, gift cards are their own form of currency, offering convenient solutions for gift card purchasers and receivers alike.”

Gift cards aren’t just about giving gifts anymore. Sixty-two percent of millennials reported self-purchasing gift cards, with more than one-third of consumers across age groups citing discounts (37 percent), loyalty/rewards programs (35 percent), and online shopping (27 percent) as the biggest drivers behind this growing trend. Self-purchasing is up from 53 percent across age groups in 2016.

First Data’s “2017 Consumer Insights Study” found that consumers purchased an average of 6.5 physical gift cards on annual basis, steadily climbing from 5.9 in 2016, 5.5 in 2015, and 4.7 in 2014. While physical gift cards still dominate, the research showed that digital gift card popularity is on the rise. In addition, a trend worth watching is mobile gift card apps. This year, among all consumers who were aware of mobile gift card apps, 52 percent had used one, and millennials outpaced total respondents with 65 percent having used an app to purchase a gift card.