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Prepaid gift cards are still a popular choice for gifts in the United States, according to “2010 Consumer Insights Gift Card Survey Results,” a new study released by Atlanta-based First Data.
According to the study, closed-loop gift cards, which can be used only at a single store or group of stores, are more prevalent than open-loop gift cards, which carry a logo such as Visa and can be used at any store that accepts those credit cards.
Birthdays are the most popular occasion to give closed-loop cards as gifts, followed by Christmas. While most people prefer to give a physical gift card, 25 percent of those surveyed said they would purchase an electronic gift card, and 48 percent expressed interest in receiving one.
Consumers also do not limit their spending to the value of the closed-loop gift cards. Seventy-two percent of shoppers said they spent more than the value of their cards. They overspent the most when using them at department stores and the least at specialty retail stores.
The First Data report also found that the average value of open-loop cards increased from $59 in 2009 to $69 in 2010, while the average value of closed-loop cards remained steady at $39. The average value of gift cards for fine dining, grocery and drugstore businesses increased, but the average value of gift cards for gas stations decreased.
First Data also reported that 46 percent of consumers purchased closed-loop gift cards at gift card malls, an increase over the 38 percent that did so in 2009.
The study concluded that more consumers are reloading both open- and closed-loop cards, which could create better sales opportunities for retailers; 35 percent of those who reloaded closed-loop gift cards said they visited the store more often, and 20 percent said they spent more money during each visit.
The full study is available at First Data’s website, along with studies on the 2010 gift card markets in Canada, Germany and the United Kingdom.