A Surprising Number of Gift Cards Aren’t Actually Purchased as Gifts
According to WalletHub, gift card sales are expected to reach $149 billion in 2017, a 54 percent increase from 2007. They’re now the most popular holiday present, and are gaining popularity for other gift-giving occasions, too. Surprisingly, though, a huge percentage of gift cards aren’t purchased to change hands at all.
There are five different segments of people who make up the majority of gift card buyers, WalletHub says. The first four represent shoppers who buy the cards primarily as gifts:
- Card Enthusiasts are shoppers who just really love giving (and receiving!) gift cards. They purchase about six a year, and feel like gift cards are the best way for people to get what they really want. They’re likely to give gift cards for any occasion, especially birthdays and Christmas, and are just as enthusiastic about virtual gift cards as plastic.
- Helpful Husbands make up almost a fifth of gift card buyers, even though they’re apathetic about the whole process. They’re generally married, retired, and buy almost five a year for their children. Since they’re less comfortable with technology than other segments, they aren’t interested in mobile gift cards, and will instead go to a specific location and buy branded gift cards in person.
- Convenience Shoppers appreciate the time they save by buying gift cards. These married women in their 40s are the most likely group to purchase gift cards for weddings and graduations, particularly branded gift cards directly from a particular store.
- Last Resort shoppers prove just how pervasive gift cards are in the retail market – even though they think gift cards are impersonal and claim to dislike them, they still spend an average of $131.45 annually*.
The consumer type who spends the most annually on gift cards, however, isn’t buying for a hard-to-shop-for loved one, a special occasion gift for a long-distance relative, or even an employee giveaway – they’re actually buying for themselves.
The Budget Tamer outspends the average gift card consumer by 37 percent, and “nine in 10 purchase gift cards for themselves as a way to spend within their budgets.” According to Packaged Facts’ 2016 report Prepaid and Gift Cards in the U.S., 5th Edition, people aged 25-44 spent about $3 billion on themselves in 2016.
As a retailer, capturing the business of people buying gift cards primarily for their own use is a bit different than driving gift card sales for others. Because these buyers often use gift cards to manage their spending, they are motivated by rewards programs and other incentives. Appeal to their enthusiasm for a good deal by working with your payments vendor to sweeten your offerings. Promotional and program options could include:
- Loyalty rewards
- Bonus offers
- Member perks
When you work with EML Payments, you have a trusted partner that can make your gift card program more profitable. Your customers deserve to splurge on themselves – let us help you capture the business of the Budget Tamers!
*most recent numbers from 2011