One Store or Any Store - Consumers Say Yes to Gift Cards

Nearly eight out of 10 (78%) American adults who responded to an online survey purchased or received a gift card in the previous 12 months and nearly half (43%) did both, according to the survey.

The study also indicates that single-merchant gift cards are more heavily purchased with an average of 4.7 cards per purchaser. However, multi-merchant gift cards, averaging 2.6 cards per purchaser, are increasing in popularity as choice and convenience continue to drive the market.

"What started out little more than a decade ago as a simple replacement for paper gift certificates has evolved into an industry mainstay as gift cards of all types continue their climb in popularity among consumers," said Kevin Grieve, president of First Data Prepaid Services. "The results of our study indicate that American consumers understand gift cards, set out to buy them and typically spend more than the initial value of the card when it comes time to redeem them."

On average, American consumers purchased five gift cards in the previous 12 months and spent an average $281 on those cards. Gift card recipients, regardless of whether it was a single- or multi-merchant card, spent an average $39 over the original value of the gift card.

Nearly one in four gift card purchasers (23%) chose a gift card that could be used at a variety of stores, restaurants and other retailers. Discount stores are the top choice for redemption of multi-merchant gift cards; however, many consumers who receive multi-merchant gift cards also use them for basic needs at supermarkets/drug stores, and gas stations/convenience stores.

"The numbers show that gift cards continue to deliver strong satisfaction and value for purchasers and receivers," said Karen Larsen, chief marketing officer for First Data Commercial Services. "Throughout history, American consumers have responded to products that make their life easier by providing convenience, choice and overall value to their retail needs and wants. The popularity and convenience of gift cards is helping to expand the entire world of prepaid products to consumers, merchants and a growing list of service providers and professionals including the human resource, healthcare and financial services industries."

Other key survey findings:

• The ability to choose a specific amount of value to place on a gift card was cited as highly influential in their purchase decision by 63% of the respondents; while the ability to earn reward points for future discounts and free merchandise was cited as highly influential by 44% of the survey respondents;
• 18-34 year old consumers who received single-merchant gift cards also had the highest average dollar amount of gift cards per year, $239, compared to $172 for the average gift card recipient;
• Of those who purchased single-merchant gift cards, 72% entered the retail location intending to buy a gift card;
• 35% of consumers who received a gift card that could be used at a variety of stores and establishments used that card at discount stores, while 21% selected specialty retail stores;
• Heavy gift card purchasers, those who spend more than $200 per year on single-merchant gift cards, purchased an average of 8.4 gift cards in the previous 12 months;
• Purchasers under age 44 are more likely to obtain gift cards from discount stores, while those aged 65+ are more attracted to gift cards from department stores.

Data for First Data Prepaid Services 2006 Consumer Insights Survey was collected Sept. 12-14, 2006, by TNS Consumer Online Panel. The data was weighted to match U.S. census demographics and consisted of interviews with 2,013 adult consumers aged 18 and over, who purchased or received a gift card in the past 12 months.