The evolution of the gift card – from paper to plastic to electronic – and how consumers now perceive them, is quite symbolic of the times. According to the Smithsonian, gift cards were invented in 1994 and Blockbuster was the first retailer to display and advertise gift cards in its stores. Fast forward to 2012 when 1,500 Starbucks gift cards were purchased every minute in the U.S. and Canada. Oh, how times have changed.
A recent study conducted by the National Retail Federation (NRF) revealed that 62 percent of people would like to receive a gift card, making gift cards the most requested gift item eight years in a row. In fact, total gift card spending is expected to reach $31.74 billion – an increase of 83 percent since NRF began tracking gift cards in 2003.
Gift cards have grown in popularity over the past decade because they are a win/win for both the buyer and the recipient. Buyers relish the convenience and recipients appreciate the opportunity to select their own gift. This holiday season, consumers young and old agree that gift cards are a great gift option. The NRF survey found adults 65+ will spend the most on gift cards, while men spend significantly more than women ($180.81 vs. $165.09 respectively).
The advantages of selling gifts cards can equate to big profits for retailers and restaurants. According to industry reports, the average gift card user ends up spending 20 percent more than the value of the card. Plus, 55 percent of gift card recipients require more than one shopping trip to spend the balance of the card.
From beauty services to fuel, gift card options are truly limitless. While department store gift cards rule during the holidays, giving the gift of a restaurant meal is a close second. One in five shoppers will pick up coffee shop gift cards, 18.1 percent will give the gift of entertainment, such as a movie theater gift card, and 18.9 percent will give gift cards to an electronics store.
The availability of electronic gift cards are an attractive option for online shoppers and the 40 percent of Millennials who admit to losing gift cards. E-cards can be accessed through mobile apps and e-mail applications giving shoppers the ability to customize an e-gift card with a message, photo or video. Oh, how times have changed.