Thursday, February 24, 2022
What's more, unlike many other consumer purchases, gift card sales didn't take a hit because of the COVID-19 pandemic. Most consumers polled said their gift card purchases haven't changed over the past two years, a trend Fiserv said could be tied to the rise of digital options for purchasing and delivery.
"With more options available to buy digital gift cards during potential lockdowns and send them through contactless options, the gift card market remained steady during an economy where many were struggling," the company wrote in a just released report.
Fiserv also said it also found a sharp increase in the use of gift cards as employee incentives. Sixty-three percent of employed respondents reported receiving gift cards from employers, up from 32 percent in 2019, Fiserv said.
The findings were gleaned from the 19th Annual Prepaid Consumer Insights Survey, just reported out by Fiserv. The survey queried 1,000 consumers in December.
Here are additional highlights:
The global market for gift cards is expected to reach $899.3 billion this year, growing at a combined annual rate of 11.1 percent between now and 2026, when it's expected to reach $1.4 trillion, according to a new analysis published by the market research firm Global Industry Analysts.
The U.S. accounts for just over 38 percent of the global gift card market, and will total $339.5 billion in 2022, the firm said.
Retail closed loop gift card programs, one of the sectors analyzed by Global Industry Analysts, are expected to grow a bit faster than the market in general. With an estimated $410.8 billion this year, retail closed loop programs are expected to register a 11.4 percent combined annual growth rate through 2026.
Restaurants, which account for nearly a third of all gift card programs, will see slower growth, about 10 percent, the firm estimated.
Retailers can expect some of the biggest spend using gift cards to occur in the coming months. The gift card program provider Blackhawk Network reports that its sales data suggests "a strong double-digit increase" in gift card sales during the 2021 year-end holiday season. And a late December survey of 1,925 consumers found most eager to spend the money on the cards they were gifted.
A whopping 82 percent of consumers surveyed expect to use their holiday gift cards during the first half of the year, with nearly half (47 percent) planning to spend more than the value on their gift cards. Among those planning to spend more, 41 percent said they anticipated spending at least $50 more than the amount they were gifted, Blackhawk reported.
"As we enter the third calendar year of the pandemic, 2022 will likely be yet another year of evolution and innovation for retailers," said Brett Narlinger, head of global commerce at Blackhawk. "But one constant bright spot over the last several months – and as we look ahead – continues to be gift cards. From acting as digital on-ramp for cash-based consumers and small businesses, to becoming a stopgap for inventory and shipping issues over the holiday, consumers continue to look to gift cards," Narlinger added.
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