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Gift Card Appeal Continues to Grow According to Market Strategies Study

The popularity of retail gift cards continues to grow year-round according to data compiled by global market research leader Market Strategies International in a study commissioned for First Data Corp.

This 2007 U.S. Gift Card Consumer Insights Survey shows that gift cards continue to gain in popularity in 2007 with 9 out of 10 American adults responding to an online survey saying they received a gift card within the previous 12 months. Approximately 60 percent of all respondents indicated that had both bough and received at least one gift card during that time.

Those figures were 12-17 percent higher than during a similar study conducted by Market Strategies for First Data Corp. in 2006, when 78 percent of respondents said they bought a gift card during a 12-month span and 43 percent and bought and received one or more gift cards.

For the 2007 study Market Strategies conducted a segmentation analysis to better help First Data Corp. understand its clients and better identify appropriate targets said Mark Herrington, president of First Data's Prepaid business unit.

"In addition to this study, we invest in a variety of other initiatives to help our clients develop and maintain successful gift card programs, including our business and consumer incentive studies, our mystery shopping studies and a gift card marketing best practices guide," Herrington said.

Birthdays and Christmas are the two most common occasions to give gift cards. Among gift card purchasers who purchased gift cards that can only be used at one retailer, 68 percent bought at least one gift card as a birthday gift, while 61 percent bought at least one card as a Christmas gift.

Other popular occasions include graduations, weddings, Mother's Day and Father's Day, but "thank you gifts" and "no special occasion" were frequently cited by survey respondents as well.

"This data helps First Data to better respond to market trends and develop strategies to both better service their clients and grow the gift card part of their business," said Market Strategies Senior Vice President and Financial Services Industry Research Group Leader Mark Willard.

"Our goal is always to provide not just the data, but what that data means to our clients so we can serve as a consultative, strategic partner with them."

Consumers are buying more cards in general, the study shows. The majority of gift card purchasers (88 percent) bought more than one card. On average, consumers who purchased cards that can be used at a single retailer bought five gift cards in the previous 12 months and spent an average $46 on each card. Gift card recipients spent an average of $29 over the original value of the gift card.

Gift cards that can be used at a specific retailer are purchased more frequently than those that can be used at multiple retailers, the study concludes. Yet more than 1 in 4 gift card purchasers (28 percent) chose a card that could be used at a variety of stores, restaurants and other retailers.

Data for First Data 2007 U.S. Gift Card Consumer Insights Survey was collected September 18-25, 2007 by Market Strategies International. The data was weighted to match U.S. census data and consisted of interviews with 2,182 adult consumers 18 years of age or older, who purchased or received a gift card in the past 12 months. The results are statistically valid at the 95 percent confidence level with a margin of error of plus or minus 2 percent.

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