It has been tough getting a clear understanding of how consumer spending is developing this holiday. On one hand, we hear from Bank of America’s Chairman and CEO Brian Moynihan here that spending on the bank’s debit and credit cards has surged as the economy recovers. And that makes sense considering that consumers want to get back to pre-pandemic spending and many consumers still have above average account balances as they save on commuting costs and are spending less on travel and eating out. But, on the other hand, inflation is diminishing spending power. Part of what is driving inflation is the persistence of supply chain issues. That in turn may offer the only sure-thing for this year’s holiday spending: as goods become difficult to find, consumers will be considering retailer gift cards instead.
Fiserv recently released a report showing strong customer use of gift cards this year. An article in Digital Transactions highlighted:
Despite consumers’ intentions to spend more on gifts this holiday season than in 2020, concerns about ongoing shipping delays and low product inventories are making gift cards a more attractive gift option.
Indeed, 33% of consumers say they would purchase a gift card if they were unable to get a particular item and 29% plan on purchasing more gift cards this holiday season due to supply chain disruptions or low store inventory, according to Fiserv Inc.’s December 2021 Gift Card Gauge. Should consumers need a last-minute gift, 44% say they would purchase a gift card.
Fiserv surveyed more than 1,000 consumers for the study, which looks at how consumer-spending patterns are changing this holiday season as a result of the ongoing supply-chain snafus.
When it comes to actual spending on gift cards, 81% plan to spend less than $50 per card, 75% plan to give at least one gift card this holiday season, and 65% plan to purchase gift cards in stores.
Overall, 54% of consumers plan to spend more on gifts than during the 2020 holiday gift-giving season, which was muted by the Covid-19 pandemic.
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group