Reasons Why Customers Still Love Gift Cards

Vishal Soni

Gift card spending has grown from $40 billion in 2003 to over $150 billion in last year as per the recent survey. Also, the National Retail Federation’s Monthly Consumer Survey revealed that they have topped the list of most requested gifts for the year 2015. There must be some reason that, despite such high rate of the Gift Cards being left unused, the 'Gift Card Business' continues to boom with such rapid growth. What can be the possible motivation to the customers that makes them buy gift cards, as well as, so eagerly want to receive them?Let's find out in the answers collected from various surveys outputs as follows:

The Overall Growth of Gift Cards

First of all, let’s talk about the overall growth of the Gift Card, Gift Cards became one of the most popular forms of prepaid gifting products made its debut in the early 1990s and have enjoyed tremendous growth over the last 10 years and it is still expected to grow with even higher rate in the upcoming years. Below is the chart from the year 2013 that shows the growth of the Prepaid Gift Cards from the year 2003-2017, I have represented the old data with a purpose, because if you look into the current figures, it has already surpassed the forecasts and will continue to do that in the Future. Gift cards are available in the market in two forms: one is an open-loop gift card, which is issued by the brand of major payment systems like Visa, MasterCard or American Express, and the second is closed-loop cards which are issued by specific retailers and can be redeemed only at that chain of retailers.


Research on why gift cards became popular is lacking but, there are many studies that provide details about the specifics of the number, type, occasion and purchase locations related to gift card purchase.

A survey was conducted amongst the citizens of the United States and the sample size was 3,050 gift card buyers all from the U.S. The findings of the data were pretty interesting and you will know exactly why people are fond of buying the Gift Cards by going through them. The survey was able to answer the two major questions on which this article is based. One includes the reasons as to why people prefer to Give Gift Cards instead of other gifts and the factors or the Motivations of the Gift Card Buyers. After reading the results you will surely believe it is a popular concept and people will surely increase their activity of buying Gift Cards in the future.

Key Findings of Why People prefer to give Gift Cards:

  • About 1/3 of the overall gifts purchased across the United States were gift cards.
  • 94 % of respondents said they would most probably purchase a gift card in the following year.
  • The most popular occasions to buy a Gift Cards were Birthdays (70 percent) as well as winter holidays (64 percent).
  • 96 % of the respondents who gave a Gift Card also received gift cards in the same year.
  • On an average, the gift card buyers received 4.2 gift cards in the previous year.

Respondents were selected on the basis of varied 31 constructs which were developed from prior studies, past gift card shopper’s research, Gift Card Buyer’s shopping behavior and general attitudes of the society or that area.

The data was collected from the Gift card mall customers, Gift card buyers from convenience & grocery stores.

 Motivations of a Gift Card Customer

The data gathered was reduced to the following factors:

  • Affinity for shopping
  • Degree of shopping urgency
  • Level of gifting (high, low)
  • Need for practicality with gifting
  • Need for emotional component while gifting
  • Overall interest in buying and using gift cards
  • Online presence
  • Use of coupons

After looking at the data, survey outputs of the respondents were divided into four clusters:

Blackhawk_Graph_2Shockingly, the biggest reason for most of the respondents was that “It’s a Busy Life” and the cluster included 33.23 percent of the total respondents, thus customers prefer to buy gift cards because it saves them a lot of time. The second most popular response of the respondents which made a cluster of around 23.18 percent was that they were motivated to keep the Gift receiver within a budget this was actually a new finding since the year 2008. The third most popular response of the respondents which made a cluster of around cluster 22.45 percent was that they had a desire to make people happy. The fourth most popular response of the respondents which made a cluster of around 22.22 percent was that they were motivated to give the receiver the chance to buy exactly what they want.

Thus, with above data, I hope it is clear to all of you that why customers are fond of buying Gift Cards.

About the Author

Vishal Soni is an avid reader and blogger. He is always interested in technology, business, retail business etc. For more detail about this article please here:

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