ENGLEWOOD, Colo. — Gift card sales are expected to spike once again during the 2005 holiday season as American consumers continue their love affair with the product, purchasing gift cards for family, friends and coworkers. According to the most recent survey from First Data Prepaid Services' ValueLink, 54 percent of the respondents who purchased gift cards indicated that they have purchased gift cards for others at Christmas time. Christmas purchases have more than doubled since ValueLink first began tracking consumer behavior in 2001 when the figure was just 23 percent. Gift cards accounted for more than $17 billion in holiday sales in 2004, roughly 8 percent of all holiday retail sales, according to the National Retail Federation.
The 2005 First Data Prepaid Services survey of 1,003 U.S. adults aged 18 or older revealed significant growth and stability in gift card use across several measurable categories for the previous 12 months and when evaluated over the past five years. American consumer awareness, use and satisfaction with gift cards are as high as they have been at any time during the first half of the decade, according to the study which tracks consumer behavior related to gift card purchase and use.
Originally seen as a simple replacement for paper gift certificates, electronic gift cards have quickly become the product of choice as consumers continually cite flexibility, convenience and value as key factors in both the purchase and use of gift cards.
"The benefits of gift cards for both consumers and businesses in diverse industries have driven the phenomenal growth of the product, particularly over the past five years," said First Data Prepaid Services president Ed Labry. "For the American consumer, gift cards are now planned purchases that have become an integral part of our holiday gift giving. But, just as important, they are a part of our year-round gift giving, general retail purchase activity, as well as, a growing factor in our corporate and customer incentive, reward and loyalty programs. Why? Convenience, choice, flexibility and success in giving a gift that delights rather than disappoints."
Approximately six out of 10 American adults, an estimated 131 million people, either purchased or received a gift card in the previous 12 months, up 23 percent from 2001.
In addition, people are buying and using gift cards from and for a much more diverse list of retailers, food service and entertainment providers than at any time in the past five years. While major retailers continue to enjoy a dominant share of gift card purchases, restaurants, food stores and entertainment-based stores have seen impressive increases in volume. In 2005, restaurants accounted for 12 percent of gift card purchases, more than double the 5 percent reported just two years prior. Food stores accounted for another 6 percent of gift card sales in 2005 while entertainment-based businesses accounted for 5 percent.
