Time to dust off your gift card sales pitch

Gift cards are an intentional purchase that consumers plan for well in advance of the holidays, offering merchants an ideal opportunity to capture sales before peak season, and by extension, a reason for merchant level salespeople to sell merchants on the opportunities that come with selling them.

That's a top-line finding of Bank of America and The Strawhecker Group's 2026 gift card report, Gift Cards are Gaining Momentum: What Merchants Need to Know in 2026. The guide is based on a full-year view of consumers' actual 2025 purchases as gleaned from a survey of 1,002 U.S. consumers conducted in February 2026.

"Gift cards drive near-term revenue, encourage repeat spend beyond the card value, and bring customers back both in-store and online," according to the guide. "With high usage within the first few months, they provide a reliable way to accelerate revenue and strengthen customer engagement – making them a critical strategy for winning this holiday season."

Holiday gifting: cards trump merchandise

Holidays remain the top occasion for purchasing gift cards, with 89 percent of consumers surveyed purchasing gift cards for the 2025 year-end holidays, followed by birthdays (83 percent) and special occasions (67 percent). Most purchases (86 percent) go to family members; 56 percent go to friends and 19 percent are earmarked for co-workers.

"Because consumers plan early, purchasing decisions are often made before peak season, creating a clear window for merchants to influence demand," researchers noted in the report.

Gift cards are deemed a preferred and reliable gift, not a fallback. Nearly three in four participating holiday gift buyers (73 percent) prefer purchasing gift cards over merchandise, and 93 percent said gift cards give recipients the freedom and flexibility to spend how they want.

On the receiving side, 96 percent of recipients in the survey rated their gift cards on par with or better than the traditional gifts they received.

Rapid redemptions drive revenues

Fast redemptions drive immediate revenue impact, the report noted. Eighty-seven percent of consumers surveyed who received holiday gift cards in 2025 used at least half of them by February 2026.

In fact, 43 percent used all of their holiday gift cards by February 2026, 29 percent used most of the value on the cards, and 15 percent used half. Often consumers spent more than the amount on a card, and they reported returning to the retailer both in-store and online.

Gift cards are "a core driver of retail performance," researchers wrote, adding that merchants who act early "are best positioned to win the holiday season."

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