Convenience, Flexibility Top Reasons for Gift Card Popularity

Americans love giving and receiving gift cards. They are always in demand and present retailers with significant incremental sales opportunities, according to new consumer research from the Retail Gift Card Association (RGCA).

The association surveyed more than 1,100 U.S. consumers on their use of gift cards, preferences for giving and spending the cards and willingness to embrace new gifting options like e-codes, which are digital gift cards that can be purchased online or through a mobile app.

RGCA's key findings include:
  • Gift cards are extremely popular: 77 percent of consumers have given a gift card in the past year and 90 percent have received at least one in the past year.
  • Gift cards are always in demand: Most consumers don't require a sale or promotion to purchase a gift card.
  • Consumers value choice: The number one reason shoppers like to give or receive gift cards is that they allow the end users to purchase what they want.
  • Gift cards are great for group gifts: 65 percent of consumers prefer the convenience of gift cards when giving a gift from a group.
  • Shoppers are savvy when redeeming gift cards: 74 percent of shoppers will wait for a sale or promotion before redeeming their cards.
  • Mobile and e-code gifts are still emerging: 54 percent of consumers have not heard of mobile gift cards or e-codes and only 17 percent of shoppers are "very comfortable" using them. However, 62 percent of the respondents who choose mobile/e-code gift cards do so when they need to get it there right away.
  • Significant benefit to retailers: Gift cards get shoppers in the door to purchase more; 72 percent do some shopping for themselves when going to a store or website to purchase a gift card. Also, gift cards increase sales during redemption; 45 percent of shoppers will spend more than the value of the gift card when they redeem.
"Convenience and choice make gift cards extremely popular among consumers. Although mobile gift cards and e-codes are not widely used by consumers, we anticipate that the adoption of these technologies will continue to rise into the future," said Mary Donovan, executive director of the RGCA. "From a business perspective, we are pleased to see the degree to which gift card sales deliver benefits to retailers: consumers report spending more when both purchasing and redeeming gift cards."

The RGCA consumer gift card study was conducted via online survey in the spring of 2014 with more than 1,100 adult respondents. The sample was representative of the adult U.S. population in terms of education, income and gender.
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