First Data, the global payments processing company, has been tracking gift card sales during the 2009 holiday shopping season, and publishing the compiled results in their “2009 Holiday Gift Card Performance Report”. The Report provides insights “based on aggregated transaction data generated by First Data’s merchant branded gift card processing business and our observations of the marketplace.” As a result, the compiled information should accurately reflect real sales. According to First Data, sales are up as compared to 2008.
In the second Report, First Data reports the following:
2009 U.S. Holiday Season Gift card redemptions were up 7 percent in the second week of holiday shopping, compared to the same week in 2008. This suggests that consumers are already redeeming the incentive gift cards that they obtained just a few days ago. Additionally, gift card activations continue to rise.
For all types of gift cards, the total dollar value of gift cards sold in 2009 is up 4.4% from 2008. For specialty retailer gift cards (including merchants that sell clothing, electronics, books, sporting goods, hardware, music, video, beauty supplies, home goods and other items), the total dollar volume of cards sold in 2009 is up almost 17% over the comparable period in 2008. Restaurant gift cards, on the other hand, are only slightly up from the same period in 2008.
First Data’s conclusions for gift card retailers?
Keep in mind that as your merchandise inventories run low, gift cards will become even more compelling purchases for customers. According to First Data’s 2009 U.S. Gift Card Consumer Insights Survey, 46 percent of gift card purchasers said that they are likely to buy a gift card if an item they want is out of stock.
Aggressively promote your gift cards in the two weeks before Christmas. Approximately three quarters of gift card purchasers indicate that they buy their gift cards within two weeks of the gifting occasion, according to First Data’s 2008 U.S. Gift Card Consumer Insights Survey.
Read all the data from First Data on their Website. This is a unique situation where retailers can enjoy actual data rather than projections.