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Gift Cards Lead to Even More Consumer Spending

By Tom Nawrocki
March 19, 2024
in Analysts Coverage, Gift Cards, Prepaid
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Receiving gift cards spurs consumers to make purchases of higher value, exceeding the card’s initial worth. That’s one key finding from the State of the Nation 2024 research conducted by the UK’s Gift Card & Voucher Association (GCVA) and Global Data, further affirming the notion that gift cards encourage shoppers to spend more money.

The study reveals that more than two-thirds (68%) of respondents who redeemed their cards in the past 12 months ended up spending more than the card’s value. Specifically, 43% spent an average of £10 beyond the £30value of the gift card, an increase of 33%.

These gift card spending patterns have also taken hold in the U.S.

“The data that GVCA has collected on spending aligns with data Javelin collects in our annual survey of U.S. consumers,” said Jordan Hirschfield, Director of Prepaid in Javelin Strategy & Research. “Javelin shows that not only will card spending result in increased spend and splurges, but will also help draw consumers back into retail locations. The power of retail gift cards creates this triple threat of additional spending, more profitable spending and increased traffic.”

Bigger Spending Among the Young

The GCVA study broke down gift card spending patterns across different generations. Millennials ranked at the head of the pack when it comes to surpassing the value of their cards. Within this cohort, 36% spent an average of £10 more than the card’s value, while 34% spent at least an additional £30. The desire to spend beyond the card’s value was lowest among Baby Boomers, with only 17% of this group spending an additional £30 or more. Gen Z fell somewhat in the middle, with 24% making additional purchases.

This tracks with earlier findings that younger generations are more receptive to gift cards. Javelin research has found that among Gen Z and millennials, 20% of their total populations intended to buy more cards than they had in the previous 12 months. Only 9% and 6% of those in Gex X and Baby Boomer generations, respectively, intended to purchase more.

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Tags: Gift CardsPrepaidUK

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