According to CNNMoney.com, in an article written by Jessica Dickler, about 60% of consumers say that they would like to receive a gift card rather than a traditional present. Year after year, gift cards are consistently the most popular gift to give and receive during the holiday season. As their popularity continues to grow and options and flexibility continue to expand it’s becoming more and more important for business owners of every size and type to take notice of this popular payment trend.
In an article posted by ICSC, CEB TowerGroup, a company which has been tracking gift card sales since 2006, predicts that sales of gift cards could top $130 billion by 2015, up from $110 billion in 2012. Simply put, consumers love to both give and receive gift cards. As a gift recipient, it’s most likely because it saves the hassle of returning the ugly sweatshirt or tacky tie to a department store and waiting in long lines to make an exchange or return. Gift card givers also prefer the ease and speed of check out when purchasing a Gift Card while eliminating the stress of getting “the perfect gift”.
Many companies that offer merchant services and payment processing have gift and loyalty card programs and even a small gift card program can increase profits for any size business. According to Karen Whiteley at Regal Payment Systems, a program consisting of 30 cards with an average activation of $42 per card can give a small business a total net profit of over $800.
The National Retail Federation has conducted a survey to gauge what types of cards consumers will most likely be purchasing and according to their 2012 holiday survey. It breaks down like this:
So as a business owner, it’s important to consider the consumer trend towards gift cards to ensure that you are offering customers the products and payment options that they demand. With the average customer spending 33% more than the amount of the gift card, not offering gift cards as a payment option could mean missing out on higher profits, increased customer loyalty, repeat business and increased sales. Gift cards are a very practical gift and as their popularity and flexibility increase and new rules and regulations surrounding gift cards provide more protection for the consumer; this trend shows no sign of slowing down.
Brandon Cook is Senior Graphic/Web Designer for Regal Payment Systems. When not creating and developing with Regal he enjoys spending time with his kids and listening to music.