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Gift Card Trends

Gift givers now prefer gift cards to cash, study finds Original Story from Wise Marketer

More than half of American consumers prefer electronic gift or spending cards when giving gifts rather than giving cash or paper gift certificates, according to the fourth annual Consumer Insights Survey commissioned by spending card solutions firm ValueLink.

Of those consumers surveyed, 52% said they would prefer to give a gift card, while 38% prefer to give cash and 11% prefer to give gift certificates (11%). According to ValueLink, the survey of 1,006 US adults reveals a steady growth in gift card usage across several measurable categories, and American consumers are purchasing more gift cards at higher values than at any time since the annual survey began tracking the figures in 2001. This article is copyright 2004 TheWiseMarketer.com.

Some 64% said they purchased and/or received a gift card in the previous 12 months, compared to only 36% in the original 2001 survey. Consumers had purchased an average of just under seven gift cards in the previous 12 months, with an average value of US$59 per card (up from 4.1 cards at US$44 per card in 2001).

Most spend more
Of those who had received a gift card in the previous 12 months, 27% said they spent the initial value of their card within one week of receiving it, and another 31% spent the value within one month. More than half (55%) of those surveyed said they spent more than the value of the card when they used it.

"Tracking these statistics over a four year period has provided us with a definitive picture of the American consumer's acceptance, purchase and use of electronic gift cards," explained Kevin Harte, senior vice president and general manager for ValueLink.

Measurement	2004	2003	2002	2001
Consumer awareness of gift cards	94%	92%	79%	76%
Purchased or received a gift card	64%	59%	37%	36%
Avg. no. of gift cards purchased	6.9	5.6	4.6	4.1
Avg. value of gift cards purchased	US$59	US$41	US$50	US$44
Avg. gift card spending in previous year	US$247	US$197	n/a	n/a
Spend more than initial value of gift card	55%	56%	61%	58%
Overall satisfaction with gift cards (10 = highest)	9	9	9	7

Four year tracking of year-round gift card purchases & use
Source: ValueLink Consumer Insights Survey 2004

As demonstrated by a preference for gift cards rather than cash or paper certificates, electronic gift cards have evolved to become a desired product by purchasers and receivers alike, according to ValueLink.

Gift options
Looking at the type of gifts for which gift cards are used, 66% of gift card purchasers said that they give them as a primary gift, while 28% said they them with another gift.

"The Christmas holiday is a crucial time of the year for gift cards in the retail world, as 56% of respondents cited the occasion for a gift card purchase," said Karen Larsen, ValueLink's vice president of product marketing and evolution. "An even stronger figure, and one that points toward the year-round appeal of gift cards, is that 77% had purchased a gift card to give as a birthday gift."

The benefits
Survey respondents also highlighted the benefits of purchasing and receiving gift cards:

• 52% said gift cards allow receivers to get what they want;
   
• 36% said gift cards are convenient to purchase;
   
• 17% said they don't have to think about the specific gift they are giving;
   
• 45% said receiving a gifts card benefits their own shopping experience because they can get the gift they want and/or wait for a sale to "get more gift";
   
• 26% said gift cards are convenient and easy to use.

Key findings
Other key research findings included:

• 83% purchased gift cards in person at a store location. Another 9% made gift card purchases using the internet via merchant web sites;
   
• Of those who have purchased gift cards in the past, 50% said they are "very likely" or "somewhat likely" to purchase a gift card via a retailer or restaurant web site in the coming year;
   
• 26% said they had purchased gift cards at a store that offers gift cards from multiple retailers or merchants;
   
• Compared to the average US$247 spent on gift cards in the previous year, consumers between the ages of 45 and 54 spent an average of US$281 on gift cards during the year. Those aged 65 or older spent an average of US$200 on gift cards during the year;
   
• 80% of all purchased cards had a US$20 - US$50 value;
   
• Most consumers carry an average of 4.2 plastic cards (gift, credit, reward, and so on) in their wallet or purse at all times. However, 14% carry 6-9 plastic cards at all times, and 10% carry 10 or more cards at all times.

Data for ValueLink's Consumer Insights Survey 2004 was collected in August 2004 by TNS Financial Services Group, using its Express Telephone Omnibus (a weekly random survey of adult US consumers).

More Info:

http://www.valuelink.info

Source: ValueLink

Posted by Craig at October 21, 2004 04:08 PM