People say it’s the thought that counts when it comes to giving, but gift cards can be a safe alternative to ungrateful grimaces. In fact, 93% of consumers would rather receive a $25 gift card compared to a $25-valued present, according to the 2012 U.S. Prepaid Consumer Insights Study conducted by First Data and Market Strategies International. Gift cards make seasons bright for brands and provide brand exposure, extra revenue, and customer loyalty, the study notes.
More than $43 billion in gift cards is predicted to be given out this holiday season, according to First Data’s “Consumer Insights into the U.S. Gift Card Market: 2012” whitepaper. Shoppers spent an average of $73 per “open-loop” card (brand cards typically available for use anywhere) in 2012, and the average value of a “closed-loop” card (a card distributed by a particular retailer) was $42, according to the study. Thirty-five percent of survey respondents purchased their gift cards from a discount store or specialty retail store this year, and 27% picked one up from a department store.
However, consumers can’t seem to resist the spending itch, as two thirds of gift card recipients spent more than the card’s designated value the study notes. This year consumers spent an average of $20.79 more than their gift card was worth, according to the report.
Notably, the gift card is a one-time gig for some consumers, as 23% admit to having no interest in reloading a card. The remaining consumers list adding “bonus bucks” (64%), throwing in a freebie (44%), or giving out loyalty points (29%) as incentives to remain faithful.
And don’t think gift cards create an Internet-free zone. While 61% of shoppers bought their gift cards in store this year, 21% of respondents bought at least one e-gift card. Speedy delivery and ease in redeeming were listed as top e-gift card influencers.