Are gift cards the best gift?
The strength of retail sales in January is reflected in people redeeming their Christmas gift cards. The average adult received 3.2 gift cards this holiday season, up from 2.5 gift cards last year. Gift cards are more popular and that also moves spending into January. Consumers are also interested in receiving gift cards at other times than just Christmas.
A study by Deloitte & Touche USA found:
- 80% of adults have received at least one gift card for a clothing or food store
- 33% received at least one restaurant gift card
- 14% received one mall or shopping center gift card
- 10% received a gift card that can be used at various stores (eg an American Express gift card)
- 5% received at least one for a personal service such as a manicure or massage
- 5% received at least one gift card for an internet site (e.g. ebay, Amazon)
Price ranges for gift cards ranged from $78 for an American Express card, while the lowest was for a $32 restaurant card. Bank gift cards are more likely to be used in January. Nearly 74% of these gift cards were redeemed or partially redeemed by the end of January.
People are more likely to buy full-price retail items with their gift cards. Many analysts believe that the “gift” aspect allows consumers to treat themselves to new goods at full price.
Retailers also benefit when consumers redeem a gift card, with nearly 62% spending more than the face value of the card. This is an opportunity for retailers to increase sales as sales cannot be accounted for until the gift card is redeemed.
Users also expressed interest in receiving gift cards for other holidays. For example, an “experience” gift card is widely accepted as a result of people being pressed for time. Getting a gift card for a trip to a restaurant or a massage or even a weekend getaway seems to be a trend that people are enjoying.
Teens enjoy gift cards because they are more eager to shop with their friends and are more likely to redeem their cards faster than adults. The study found that teens redeemed 76 percent of their gift cards versus 61 percent of adults.
Gift cards continue to be given out after the holidays, especially for retailers. Gift cards are here to stay. Consumers are happy to use them and retailers are happy to receive them. Gift cards are a suitable gift for any occasion.
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