Although gift cards
aren't necessarily good for consumers, they have been quite good for retailers. According to the second annual Post-Holiday Gift Card Survey commissioned by Deloitte & Touche, the number of gift cards received per adult increased more than 20 percent over last year, and the redemption of those cards have likely boosted retail sales by an estimated $18 billion. Furthermore, the survey found consumers are interested in receiving cards for more occasions than just the year end holidays.
The survey found that adults received 3.2 gift cards during the 2004 holiday season. This figure is up from last year’s survey, which found that 2.5 gift cards were received as gifts. The 3.2 cards received last year during the holiday season had a total face value of $142.98.
While 61 percent of all gift cards received by adults in this latest survey had been fully or partially redeemed by the end of January, another $9 billion of unredeemed card value remained on their gift cards.
If consumers continue to spend those unredeemed cards in a similar fashion as they did in December and January -- that is, some consumers purchase more than the face value of their cards -- then these unredeemed gift cards have the potential to add as much as $13 billion to retail sales. Additionally, that $13 billion encompasses only the gift cards from the 2004 holiday season. If the 1.9 cards that consumers told us they are still holding from prior holidays are added in, the benefit to retailers would be even higher.
Other findings from the survey include:
- 80 percent of adults received at least one gift card to a store such as an apparel or food store
- 33 percent received at least one to a restaurant/fast food establishment
- 14 percent received at least one gift card to a mall or shopping center
- 10 percent received at least one card that could be used at a variety of stores/establishments (e.g., an American Express gift card)
- 5 percent received at least one for a personal service, such as a manicure
- 5 percent received at least one gift card for an Internet site – (e.g., eBay, Amazon)
For adults, the highest dollar amount received was nearly $78 for a bank card such as an American Express card, while the lowest was $32 for a restaurant or fast food establishment. Bank cards were the type most likely to have been used by the end of January. Nearly three-quarters (74 percent) of these cards have already been fully or partially redeemed.
More bad news that gift cards aren't the best gift to give is that consumers are holding on to their cards, having simply forgotten about them, given that the holiday period has passed. Others may need a reminder or incentive to use them. The survey results indicate that over one-third of the gift cards received during the holidays remain unused. For those consumers who had already redeemed their cards, a majority (62 percent) spent more than the face value of the card.
Gift cards are also becoming a big hit with teens, as they reported receiving 2.8 cards during the holiday period. Teens have been more eager to shop with their cards than have adults. More than half, 54 percent, of their cards were redeemed during the last week of December, compared to only 35 percent for adults. Further, by the end of the survey period, 76 percent of teens’ cards were partially or fully redeemed vs. 61 percent for adults.
Gift Cards Were Good For Retailers
