First Data: Gift Cards Becoming More Popular Among Consumers

Consumers are increasingly relying on their mobile devices for purchasing, receiving, and managing their gift cards, according to a new study by Georgia-based global payment processing company, First Data.

The report, “The 2014 Prepaid Consumer Insights Story,” is the company’s 13^th comprehensive study of US consumers on gift cards. It measures sales of plastic gift cards, virtual e-gift cards, as well as consumer attitudes and behavior.

According to the research, 81 percent of the 3,724 respondents plan to purchase the same or more plastic cards this year, with 20 percent definitively planning to increase the number of their cards.

Eighty-four percent of participants plan to purchase the same or more e-gift cards, with 33 percent intending to increase their purchases.

Gift cards help drive sales and foot traffic with respondents who receive gift cards spending an average of $23.41 beyond their gift card’s original value, the survey found. This figure marks an increase from $20.79 two years ago.

Consumers are also increasingly opting to go online to buy gift cards, with online purchases up 34 percent this year from 26 percent in 2013. Purchases using social networking sites also went up from eight percent last year to 13 percent in 2014.

Incentives, loyalty and rewards also drive sales with 32 percent making a purchase at a store because of incentives, the survey noted.

With the effectiveness of gift cards to draw customers, build brand awareness and drive revenue, merchants have quickly adopted prepaid programs. They should, however, not stop innovating and evolving their efficacy to stay abreast of new technologies and consumer trends, with mobile being a promising new avenue.