Prepaid Gift Cards Remain Popular

supermarketnews.com DATAPOINTS December 17, 2012 PREPAID GIFT CARDS REMAIN POPULAR Prepaid gift cards – especially "closed loop" cards that can only be used at specific retailers - after holiday present, according to research from First Data. In its report, called "Consumer Insights into the U.S. Gift Card Market: 2012," First Data found that the volume of gift cards both purchased and received has remained relatively stable this year, compared with last year. Gift cards for supermarket chains comprise only about 8% of the total of gift cards purchased, although they tend to be among the most valuable, with an average worth of $51. Supermarkets are also home to mall-type displays of gift cards in their stores, which are the second-most popular venue for purchasing the cards. The most popular venue – cited by 61% of buyers – is the store itself where the card can be redeemed, followed by mall displays at 45%. Consumers who buy at card malls are more likely to purchase more cards, however. remain a popular and sought- SOURCE: First Data Gift Card Purchases by Merchant Type Store-Specific Cards Preferred (multiple responses allowed) DISCOUNT STORE 35% SPECIALTY RETAILER 35% Only DEPARTMENT STORE 27% buy "open loop" cards* FAST-CASUAL RESTAUR ANT 26% Buy cards for use at specific 13% COFFEE SHOP 20% merchants ENTERTAINMENT VENUE 17% 87% FINE DINING RESTAURANT 12% GAS STATION 9% FAST FOOD RESTAURANT 9% SUPERMARKET 8% * Cards that can be used in multiple locations, such as cards issued by Visa, MasterCard, American Express and Discover DRUG STORE 3% Gift Cards Dominate of closed-loop gift card buyers purchase them as birthday gifts % of people preferring a $25 gift card over an equal or higher-valued gift 93% of all gift-card buyers 11% purchased directly from a specific retailer's website 60% 85% of card buyers aged 18-24 purchased gift cards directly 29% from a retailer's website 49% of closed-loop gift card 53% buyers purchase them as Christmas gifts $25 GIFT $30 GIFT $50 GIFT WHERE GIFT CARDS ARE PURCHASED "These findings confirm that not only are gift (multiple responses allowed) % USING cards more popular than ever, but that this is a # OF CARDS METHOD BOUGHT trend that is expected to continue." In person at retailer/restaurant/venue 61% 3.4 - MICHAEL HURSTA, VP of prepaid solutions, First Data Gift card mall 45% 4.2 Online gift card mall 11% 3.0 45% Retailer's website 11% 2.2 Social media site 1% 2.4 77% Phone or mail 1% 1.6 Average Gift Card Values $56 $55 $51 of shoppers spend the same on gift $47 $43 $38 buy gift cards from “mall" type displays cards as they would have on a traditional gift FINE DINING DEPARTMENT RESTAURANT SUPER- MARKET SPECIALTY RETAILER DISCOUNT GAS STATION/ STORE STORE C-STORE