Dec 15, 2011 – First Data Corporation, known as a payments processing and global information and analytics industry leader, released their annual report named “Consumer Insights into the U.S. Gift Card Market: 2011. With the report, First Data tracks year-over-year data in a closed-loop vs. open-loop comparison.
The study conducted by Market Strategies International, on behalf of First Data, was a 20 minute, web-based survey using a Research Now online panel consisting of over 2,000 consumers at least 18 years old who had purchased or received a gift card within the past 12 months. Here is a brief summary of some of their findings:
Consumers Still Prefer Closed Loop Cards
- 84 percent of consumers who purchased at least one gift card bought a merchant-specific card compared to 42 percent who bought an open-loop card.
- 65 percent of those who purchase a gift card gave it to someone for their birthday.
- Over 50 percent of those same people gave at lease one gift card as a holiday present.
- Discount and Specialty Retail stores led the way as most popular types of cards purchased although both down a little since 2010.
Average Value of Closed Loop Cards Rise Significantly
- The average number of closed and open-loop cards didn’t change much from 2010 to 2011, with closed-loop up just slightly to 5 per person.
- Average values spent on a a closed-loop card rose significantly from $161 to $291 while open-loop cards dropped from $214 to $203.
Consumers Enjoy the Convenience of Gift Cards
- 83 percent of respondents said gift cards make gift giving easier than buying an actual gift.
- About 75 percent of those surveyed said they like the ease of mailing gift cards to recipients who live far away.
Consumers Like to Shop at Gift Card Malls
- The majority of gift card shoppers went directly to the store, restaurant or entertainment location for their gift card purchases.
- Almost half of consumers surveyed like the convenience and selection variety of gift card malls located in grocery stores, drugstores and other retailers.
Recipients Have High Perceived Value of Gift Cards
- When asked whether a recipient would rather get a $20 gift or a $25 gift card, 92 percent opted for the gift card
- When asked whether a recipient would rather get a $25 gift or a $25 gift card, 87 percent opted for the gift card
- When asked whether a recipient would rather get a $30 gift or a $25 gift card, 79 percent opted for the gift card
- When asked whether a recipient would rather get a $45 gift or a $25 gift card, 52 percent opted for the gift card
The First Data study provides more insight for prepaid card program managers in the areas concerning reloading, gift card mall marketing and e-cards. The Consumer Gift Card Insights White Paper is available by visiting www.firstdata.com/infoanalytics or calling SpendTrend Customer Care at 800-430-0169.