Gift cards have become increasingly popular over the past few years, offering people a convenient, efficient, and thoughtful way to give gifts. Not only do they make it easy to show your appreciation, they also allow the recipient to get something they’ll truly enjoy. They are easily customizable, often available in all sorts of denominations to suit a variety of occasions. Furthermore, many retailers go beyond just providing conventional gift cards with features such as allowing users to reload their balance so that it is never used up or being able to customize messages and images for an extra personal touch.
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Data for today’s episode is provided by Mercator Advisory Group’s report – North American PaymentsInsights: Prepaid Cards: Shifting Purchase Channels
Consumer Habits for Purchasing Gift Cards Are Changing:
- Websites to buy or sell gift cards are seeing their highest level this year: 16% of consumers have bought a gift card and 11% have sold a gift card from an exchange website.
- There is still a significant awareness challenge for prepaid gift card exchange websites: 46% of consumers don’t know they exist.
- 30% of consumers know that gift card exchange websites exist, but haven’t used one in 2020; in 2017, 38% knew but hadn’t used.
- Digital and virtual card purchases are up: 36% increase in self, 31% in gift, and 47% in self or gift.
- 30% of virtual cards purchased for self are delivered by email, the largest by category.
- Gift cards delivered by app or mobile phone, wallet, SMS text, and/or social media range between 10-15% of consumers purchases in 2020.
About Report
Mercator Advisory Group’s most recent Insight Summary Report, Prepaid Cards: Shifting Purchase Channels, from the bi-annual North American PaymentsInsights Survey Series reveals continued growth of reloadable cards in the United States. Furthermore, the purchase channels for many types of prepaid cards (closed-loop gift, open-loop gift, open-loop reloadable, gaming, phone and transit) are also shifting, particularly in the area of online purchasing.
Prepaid Cards: Shifting Purchase Channels, the latest Insight Summary Report from Mercator Advisory Group’s Primary Data Service, is based on a sample of 3,001 U.S. adults surveyed in the annual online Payments survey of Mercator’s North American PaymentsInsights Survey Series, conducted in June 2020.
The study highlights consumers’ use and interest in prepaid cards and, in particular, store cards, general purpose (or open-loop) cards and general purpose reloadable cards. The report explores where consumers buy and redeem prepaid cards, whether the cards are purchased for themselves or as gifts, how the cards are used, sources of funds for the cards, and other key aspects of prepaid cards in consumers’ lives.
“The prepaid market is changing with neo and challenger banks, use of reloadable prepaid cards, and more governments and corporations issuing prepaid cards instead of checks for disbursements of all types. That said, the use of gift cards continues to be strong, particularly online,” stated the author of the report, Peter Reville, director of Primary Data Services at Mercator Advisory Group, which includes the North American PaymentsInsights Survey Series.
