This article was originally published in Elavon’s Payment Smart newsletter. The Washington Hospitality Association’s Payment Solutions is backed by U.S. Bank/Elavon.
Gift recipients have long-loved receiving gift cards during the holidays, making them the most requested holiday gift for nearly 15 years, according to the National Retail Federation. For a business there are bottom-line advantages to selling gift cards, including attracting new customers, extending holiday shopping beyond its season, profiting from unredeemed gift cards, and reducing returns.
As we enter a gift-heavy holiday sales season, here’s a look at some recent data on gift card spending:
- Around 40-50 percent of gift card purchases are made in the November/December time frame.1
- Spending on gift cards is estimated to increase by 27 percent over this time last year to about $270 per person.2
- The average denomination for gift cards purchased at this time last year was about $45 and consumers typically spent 40 percent more than the value of their gift card.2
- The global prepaid card industry surpassed $2 trillion last year thanks to gains in gift cards.3
- The gift card market is now projected to hit $4.1 trillion by 2027 – which is about 50 percent higher than many pre-pandemic estimates.3
- Quick-serve restaurants often see a 6 percent increase in average check size for online orders paid with a gift card.4
The pandemic contributed to double digit-growth during last year’s holiday season as consumers sought contactless ways to spread holiday cheer. This year, because of the ease of giving a gift card, more people shopping online, and the growing concern over slower delivery times and inventory issues, gift cards are well-positioned for another successful holiday season.
If you have not already done so, please contact me to place your order for digital, electronic or physical gift cards.
2Blackhawk Network Payment Service Survey*
3Global Industry Analysts*
4Paytronix’s 2019 Gift Card Sales report*