Gift cards have become an increasingly popular option for gifting in recent years. They are convenient for both the giver and the recipient, as well as being more personal than simply giving cash. They also offer flexibility, as they can be used for a variety of items and the recipient can choose when and where they want to use it. Additionally, they are a great last-minute gift option for those who may have forgotten a special occasion. With a wide range of options available, from popular retailers to specialized businesses, there is sure to be a gift card to suit every taste and interest.
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Data for today’s episode is provided by Javelin Strategy & Research’s Report: Unused Value in Prepaid Cards: Breaking the Misconceptions
Top 5 Gift Card Purchase Locations
- 36% purchased at mass merchandisers
- 35% purchased at online-only merchandisers
- 23% purchased at coffee/specialty food shops
- 22% purchased at fast food restaurants
- 18% purchased at supermarkets/grocery stores
About Report
There’s a misconception that gift cards and other prepaid products go unused, but the trends of consumer use and product growth defy that belief, creating profit centers for issuing organizations. The fact that gift cards encourage additional spending and have many other uses, such as receiving loyalty cards as an employee incentive or creating goodwill opportunities, promotes rapid redemption, thus mitigating issues with unused funds. The use of stored-value accounts emphasizes that loyalty provides extra benefits and encourages repetitive reloads, reducing the amount of unused funds that companies must account for.
To strengthen and maintain prepaid programs, organizations should communicate often with the appropriate stakeholders, such as consumers, shareholders, and employees. Communication encourages the spending of unused balances, highlights the value of loyalty programs associated with stored-value accounts, and can act as a way to avoid escheatment where it is regulated. Retailers must also be clear with policies to ensure compliance with various states’ cash-out and escheatment regulations, which can be accomplished through universal policies, proper staff training, and regular reviews of applicable regulations by location.
