In a year that’s been filled with lifestyle changes, personal pivots and business adaptations, 2020 may also go down as the year of the gift card as studies show an outsized increase in sales leading up to the busy holiday season.
Driven by the pandemic’s push that has sparked a massive surge in online traffic and purchasing, the rise in gift card giving, validated by PYMNTS research, suggests that Americans are clearly embracing their new digital lifestyles especially when it comes to giving presents.
“The data is clear: gift cards are booming for the holidays, and the net effect could be a boost for Q1 as they’re used in the new year,” said Todd Dipaola, CEO of consumer intelligence firm InMarket. “Gift cards are no longer a last-minute gift — they add optionality in uncertain times showing the power of choice.”
InMarket’s survey showed unique purchases of gift cards rose 363 percent this fall versus a year ago, which it said reflects the growing popularity of gift cards as well as the unusually early start to the holiday shopping season this year. InMarket’s data also showed customers were spending about 17 percent more on gift cards in 2020.
PYMNTS research supports the finding. When asked if they would purchase gift cards as part of their online shopping for the holidays, 29.6 percent were either very or extremely likely to do so. Almost the exact same number said they were “somewhat likely” to purchase a gift card. About 41 percent said they were only slightly likely or not at all likely to purchase gift cards. Bridge millennials and Gen Xers led the way, with a 35.7 and 34.7 percent likelihood to purchase gift cards, respectively.
Similar research conducted by Blackhawk Network, which works with more than 1,000 brands and card partners in more than 200,000 retail locations, reflected a 71 percent spike in home goods gift cards and a 29 percent increase from restaurants.
“Overall, 6-in-10 surveyed shoppers are likely to buy more gifts online this holiday season due to COVID-19,” the Blackhawk study said, also noting that 63 percent of respondents planned to travel less and instead buy gift cards for the loved ones they can’t see. Blackhawk also projects an increase in hardship gift card giving to people who are currently struggling in some way, and notes that the Q4 surge comes in a year that has already seen eCommerce gift card sales rise by 21 percent.
In addition to trends like reducing hardship, studies also show the gift card uptick being embraced by other sectors too.
According to Rise.ai, a gift card, rewards and branding platform from Tel Aviv, the shift goes beyond consumers wanting to stay out of stores and preferring to not touch cash.
“Purchasing gift cards is also one way consumers have been supporting local businesses during the pandemic,” Rise said, “and more corporations are giving gift cards to employees to help small and medium businesses too.”