Gift Cards: Plastic Today, Digital Tomorrow
$50 GIFT CARDS: PLASTIC TODAY, DIGITAL TOMORROW E-gifting, through digital and mobile channels, has taken hold and will deliver $4 billion in spending in the US, an 8-fold increase over 2012. HOW MUCH ARE GIFT CARD SALES GROWING? %24 IN 2013, BY THE YEAR $118 BILLION 2015, $50 $25 HAPPY HOLIDAYS НАРPY $100 BIRTHDAY Gift cards will CONGRATS! account for will be loaded on gift cards in the U.S. That's a 7.9% higher than 2012. 18% OF HOLIDAY SPENDING US CONSUMPTION OF GIFT CARDS EXCEEDS THE GDP OF 136 COUNTRIES 2012 UN Rankings: 194 countries and territories: GDP of #58 is $106B ESTIMATED U.S. GIFT CARD SPENDING BY SEGMENT $160 Electronic gift cards are projected to hit $10 billion in sales by 2016 Continued growth from all segments is projected, $140 especially the Universal and Retail segments $10 Electronic gift cards are projected to create $3 billion in sales this year $120 $5 $0 $100 $41 $43 $43 $80 $36 $39 .... $28 $33 $30 $32 $60 $13 $13 $13 $14 $14 $12 $1 $11 $11 $19 $20 $20 $21 $40 $19 $18 $19 $16 $16 $20 $32 $31 $32 $37 $41 $44 $48 $49 $51 $0 2008 2009 2010 2011 2012 2013 2015 2016 Universal (Visa, Mastercard) Restaurant (McDonald's, Outback Steakhouse) Miscellaneous (BMW, Spa Envy) Retail (Home Depot, Macy's) e-Gifting (Amazon, App Stores) LESS SPILLAGE, FURTHER IMPROVEMENTS ANTICIPATED It used to be that 10% of gift cards went unused every year, but with more people placing a higher value on gift cards, we're seeing a big drop in spillage and an increase in fraud. SPILLAGE: GIFT CARDS THAT ARE EITHER LOST, EXPIRED OR SIMPLY GO UNUSED (OR PARTIALLY UNUSED) $50 LESS THAN 1% Spillage is decreasing. A downward trend below 1% is projected, The CARD Act put severe limits on expiration dates, junk fees, account usage charges and expiration dates. It has decreased spillage and which is substantially better than the 10% level experienced in previous years consumers have benefited tremendously LOST VALUE: SPILLAGE $9 $8 $7 $6 The CARD Act is enstated and dramatically lowers spillage rates $5 $3 $2 $1 $0 2007 2010 2012 2014 THE FUTURE OF GIFT CARDS Gift cards continue to grow and are quickly approaching $140 billion in volume. Product enhancements such as P2P and e-gifting will add scale, though the P2P Sector will likely move volume away from traditional card issuers and e-gifting will bring new users to the network. LEARN MORE ABOUT THE FULL RANGE OF CEB FINANCIAL SERVICES PROGRAMS AT HTTP://CEBURL.COM/GIFTCARDS SOURCES: (2011) Gift Cards 2011: Coming of Age in a World of Chaos, CEB TowerGroup Viewpoint #350 (2010) New Regulations Wipe Out Gift Card Junk Fees & Reposition Market, CEB TowerGroup Viewpoint #334 (2009) Gift Cards: Still Better to Give than Receive, CEB TowerGroup Viewpoint #302 (2008) Charred Card: Private-Label Gift Cards Stumble in a Weak Economy, CEB TowerGroup Viewpoint #236 (2007) Gift Cards: Keeping them from Becoming Drift Cards, CEB TowerGroup Research Note V49:44K BILLIONS 2014 BILLIONS 2008 600 2011 2013
Gift Cards: Plastic Today, Digital Tomorrow
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