For the seventh year in a row, gift cards rated as holiday shoppers' most wanted gift, according to NRF's 2013 holiday survey. The average shopper planned to spend an average of $163.16 on gift cards, up 4.0 percent over the $156.86 in 2012.
Less impressive: total spending on gift cards was estimated to reach $29.8 billion, representing only 4.9 percent of NRF's total holiday spending estimate of $602.1 billion.
But gift card usage continues to increase and appears set to expand further due to several drivers:
- Fewer fees/expiration fears: A survey of 62 different gift cards by Bankrate found only three — Staples, Toys "R" Us and Chevron/Texaco — carried a purchase fee. State and federal legislation has also expanded the amount of time before a gift card can legally expire.
- Digital card usage: According to CEB TowerGroup, e-gift cards are expected to reach $3 billion in 2013, up from an estimated $300 million in 2012. Digital cards also appeal for different reasons than physical cards. A survey from InComm, a provider of prepaid products, found that instant delivery was the top reason consumers purchased digital cards, followed by "easier to send," 42 percent; "easier and quicker to purchase," 32 percent; "cool gift to give," 28 percent; "easier to redeem," 26 percent; and "environmentally friendly," 21 percent.
- Customizable designs: For a nominal fee, cards can be customized with images of Santa Claus, penguins, puppies, etc. For $2.99, Home Depot shoppers could purchase a small toolbox gift cardholder or choose a free design with a pop-up tree and flashing star. Target offered a gift card packaged with a Pez dispenser modeled after its mascot dog, Bullseye. In some cases, customers can upload their own images to a card.
- The stigma fades: Only 25.3 percent of respondents to NRF's survey still feel gift cards were too impersonal.
The leading reason to purchase a gift card is to enable the recipient to get whatever they want and avoid a return.
Other stats around gift cards:
- The most popular category for gift cards is restaurants, liked by 64.5 percent; followed by departments stores, 60.3 percent; online marketplace like Amazon, 54.0 percent; big box retailers, 33.5 percent; home improvement stores, 25.0 percent; and spa or leisure, 23.9 percent (Retail Gift Card Association);
- Seventy-one percent of recipients spend more than the gift card value (Swagbucks).