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Gift Cards: Shifting From Last Resort to First Choice

$50 GIFT CARDS: SHIFTING FROM LAST RESORT TO FIRST CHOICE Gift cards are no longer the unwanted fruitcakes of the holiday season. As many people's first choice for consumer gifting, gift card purchases continue to grow. HOW MUCH ARE GIFT CARD SALES GROWING? By the end of 2012, BY THE YEAR $110 billion $138,000,000,000 2015, Gift cards will $50 HAPPY. BİRTHDAY 525 HAPPY HOLIDAYSI Соnдрatы! grow to deliver will be loaded on gift cards in the U.S. That's a 10% year over year growth $138 billion in sales (which is equal to the entire GDP of New Zealand) The number of gift cards sold in the US in 2011, if laid end to end, would extend 5,318,813 miles long, or 23 times back and forth to the moon. With gift card popularity on the rise, which segments remain market favorites? ESTIMATED U.S. GIFT CARD SPENDING BY SEGMENT Continued growth from all segments is projected, especially the Universal and Retail segments $160 Electronic gift cards are projected to create $3 billion in sales this year $140 $120 $8 $12 . $3 $100 $27 $39 $41 $43 $80 $36 $28 $33 $30 $32 $14 $60 $12 $11 $11 $11 $12 $12 $13 $13. $22 $40 $19 *** $16 -. $16 $18 $19 . $19 $20 $20 $20 $34 **** $32 $31 ***** $37 .. $40 .... $42 ... $44 $46 2007 2008 2009 2010 2011 2012 2013 2014 2015 Universal (Visa, Mastercard) Restaurant (McDonald's, Outback Steakhouse) Retail (Home Depot, Macy's) Miscellaneous (BMW, Spa Envy) e-Gifting (Amazon, App Stores) SPILLAGE & FRAUD 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 PARTIALLÝ UNUSED) Tle Nol the Creit Card Accountability Responsibility and Disclosure Act of 2009 1.6% Spillage is decreasing. The 2012 spillage rate is projected to be 1.6%, substantially better than the 10% level experienced in previous years The CARD Act put severe limits on expiration dates and junk fees in the prepaid industry. It decreased spillage and brought transparency to fees LOST CARD VALUE: SPILLAGE & FRAUD $9 $8 $7 $6 %24 $5 %24 %24 %24 %24 $4 Although spillage is on the decline, consumer .. confidence may be down since fraud is on the rise. $3 $2 %24 %24 %24 %24 $1 %24 %24 %24 %24 2007 2008 2009 2010 2011 2012 2013 Lost $ Value Fraud FRAUD Fraud is an important issue in this $110 billion market. However, gift card fraud creates a cloudy scenario for current US fraud protection strategies. WHY? IT'S DIFFICULT TO TRACK: PAYMENT PATTERNS CARD USAGE CUSTOMER BEHAVIOR PROTECT YOUR CARD: Unlike your credit or debit card, the liability falls on you, not the merchant or the bank. Consumers still do not receive strong protections and are liable if cards are lost or stolen. THE FUTURE OF GIFT CARDS Increase in gift card versions of prepaid products Linkages to Loyalty Programs Surge in e-commerce and mobile payments Happy Nem Year 2015 Better merchant alliances that allow spending between stores LEARN MORE ABOUT THE FULL RANGE OF CEB FINANCIAL SERVICES PROGRAMS. Sources: (2011) Gift Cards 2011: Coming of Age in a World of Chaos, CEBTowerGroup Viewpoint #350 (2010) New Regulations Wipe Out Gift Card Junk Fees & Reposition Market, CEBTowerGroup 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, TowerGroup Viewpoint #236 (2007) Gift Cards: Keeping them from Becoming Drift Cards, TowerGroup Research Note V49:44K CEB WHAT THE REST COMPANIES DO BILLIONS SNOITTI8

Gift Cards: Shifting From Last Resort to First Choice

shared by Lemonly on Dec 05
While gift cards may have been the 'unwanted fruitcake' of gifts in the holiday season, they are now becoming the gift to give and receive. We teamed up with our friends at CEB to showcase the growth ...





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