Gift Card Sales Exceeded USD 35.3 Billion In 2005
In 2005, gift card sales in the US totaled about USD 35.3 billion, according to Ernst & Young, with the NRF estimating that about USD 18 billion gift cards were sold in the 2005 holiday shopping season. Of 526 US consumers surveyed by Accenture in January 2006, more than four out of five had given or received gift cards in the recent holiday season, with two-thirds having given and received cards. Most respondents to the Accenture survey (81 per cent) had already spent their holiday gift cards, with almost half (43 per cent) intending to do so within a month of receipt.In short, gift cards are changing the US retail landscape and proactive retailers are adapting their inventory, promotions and pricing to the needs and behaviors of gift card givers and recipients. An unexpected result of the gift card industry is the appearance of secondary online markets where consumers can trade unwanted gift cards at a discount. Gift cards also enable smaller merchants to build customer relationships while competing with larger chains, and banks and service providers are fueling this trend by bundling free cards and attractive rates with packages.
Banks such as PNC in turn are using gift card processing services to reinforce their relationships with small businesses and merchants, often as part of a business banking package. Coffee shops for instance can also use gift cards as a premium card by giving customers a free beverage for every 10 drinks bought with the card. Small-dollar gift cards are also appearing in the market, with McDonaldsÆ and Philadelphia-area dollar store chain Five Below, dispensing cards for as low as one dollar apiece, which suggests that the cards could have a role as a cashless payment option Related Links:
Small Retailers 'Getting' Gift Cards Despite Hitches
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