Affirm Sees Holiday Shift to ‘Intentional Gifting’ and Lower Spending

holiday gift budget

Buy now, pay later (BNPL) giant Affirm expects consumers to start their holiday shopping early this year, look for discounts and dial back their spending on gifts for co-workers.

“This year, the holiday shopping season is going to look a lot more intentional,” Affirm Vice President of Consumer Insights Ashmi Pancholi said in a Thursday (Oct. 13) press release.

Affirm expects that only 42% of Americans will buy gifts for their co-workers this year, down from the 79% who did so last year, according to the release.

Similarly, the company predicts that only 51% of Americans will spend money on “Secret Santa” gifts for holiday parties, a drop from the 78% who did so in 2021.

Instead, Affirm expects that consumers will prioritize gifts for their significant others and immediate family members, the press release stated.

At the same time, in response to increased costs, the company projects that Americans will change the way they shop for the gifts they do buy. For example, it expects that 32% will begin their holiday shopping earlier this year and 41% will buy gifts at a discounted price.

Affirm has also found that nearly half of Americans say budgeting for holiday season expenses like gifts, travel and hosting is a top source of stress, and about a quarter say the same of making purchases on a credit card without being able to pay it off.

“We have identified a distinct decline in consumers’ preference for credit cards during the holiday season, with nearly half as many shoppers planning to use credit cards for gifts this year (35%) compared to last year (62%),” Pancholi said.

PYMNTS research has found that credit cards remain the gold standard for payments in America, with 65% of consumers reporting that they had made a purchase with a credit card in the 12 months before they were surveyed.

Read more: 65% of Americans Have Made a Purchase with a Credit Card in the Last 12 Months

When these consumers were asked why they use credit cards, they cited convenience and usage-based rewards as the top reasons, according to “The Convenience Catalyst,” a PYMNTS and Elan collaboration.

At the same time, BNPL is a significant emerging trend, with 43% of Americans now having used the payment method, up from 31% a year earlier.

See: PYMNTS Intelligence: Exploring Varying Uses of BNPL Options Among Generations and Income Groups

BNPL is particularly attractive to consumers who have less money in their bank accounts, with many saying they prefer it to credit cards when they cannot afford a purchase outright, according to the “Buy Now, Pay Later Tracker,” a PYMNTS and Splitit collaboration.

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