Gift Card Spending Surpassed Expectations
Though the holiday season officially ended several weeks ago, retailers continue to see consumers hitting stores to spend gift cards. According to a National Retail Federation (NRF) survey, conducted by BIGresearch, consumers have plenty left to spend: Shoppers said they had spent less than half of the value of their gift cards (37.3 percent on average) by the second week in January.
Because retailers are not able to count a gift card as a sale until the card is redeemed, companies are encouraging consumers to spend gift cards as soon as possible. Retailers also know that customers redeeming gift cards are likely to spend more than the value of the card. According to the survey, half of shoppers (50.9 percent) who have redeemed holiday gift cards said they spent additional money beyond the value of the card to purchase an item.
Though gift cards were expected to be a common holiday gift, they were even more popular than projected. According to the survey, consumers spent an average of $164.81 on gift cards, up from the $146.20 they expected to spend. As a result, gift card spending during the holidays was $27.8 billion, higher than the $24.8 billion initially estimated by NRF. Men spent the most on gift cards ($176.84), while young adults 18-24 spent the least ($118.12).
While shoppers can easily purchase gift cards at a variety of locations, most consumers (76.7 percent) chose to buy gift cards from stores where the card could be used. However, many shoppers (17.3 percent) purchased store gift cards from other retailers, like convenience stores and supermarkets. Also, nearly one-fifth (17.7 percent) of consumers said they purchased a gift card online.