Electronic gift cards enjoy a high level of awareness among consumers in the United States with 76 percent of those surveyed indicating they were aware of gift cards as a retail product, according to a study by the ValueLink division of credit card services provider First Data Corp.
The study was conducted from Aug. 24-27 among 1,024 consumers. Of those people surveyed, 44 percent said they were very or somewhat likely to buy as many as four gift cards in the next 12 months.
“This research helps us to further define who the gift card consumer is and their overall awareness and usage of gift cards,” said Jerry DeWitt, director of marketing at ValueLink. “In addition, it will enable us to make sound projections relative to the overall market potential based on an understanding of consumers' current and potential purchasing behaviors.”
The survey also found that once a consumer buys an electronic gift card, that consumer is likely to buy again. Sixty-two percent said they were very likely to buy an electronic gift card in the next 12 months.
Not surprisingly, the ValueLink survey found that the majority of gift cards are bought to coincide with specific occasions. Thirty-four percent of gift cards are bought for Christmas and 33 percent for birthdays, according to the survey.
While the average value of an electronic gift card received is $50, the ValueLink study recommends that to increase usage, gift card providers should allow consumers to choose the card value. Nearly 71 percent of buyers prefer choosing the value. Nearly 21 percent of consumers expressed an interest in the ability to add value to an electronic gift card.
The ValueLink study also suggests that cards be developed that can be used among multiple retailers.
“Develop electronic gift cards that could be used among multiple retailers [and] locations,” the survey found. “One of the key barriers to purchase is the perception of restrictions on the retailers that an electronic gift card can be used at. Ensuring cards are accepted widely will go some way to address this concern.”
The survey also found that 25 percent of buyers claim that in-store advertising influenced their decision to buy. Only 5 percent of consumers have ever bought a card over the Internet at a retailer's Web site and only 7 percent have ever used one to make a purchase at a retailer's site.