As many as 70 percent of shoppers plan to purchase gift cards this holiday season. According to Stored Value Solutions' (SVS) interim holiday spending report, of those planning to buy gift cards, 92 percent will spend either the same amount or more than they did last year. This marks the eighth year in a row that gift cards have been the most desired holiday gift.
According to Mark Schatz, managing director at Stored Value Solutions, gift cards are continually popular because they let recipients choose what they want from their favorite brands. In fact, 55 percent of consumers prefer gift cards to any other gift item, up 5 percent since 2010.
According to the SVS report, the average consumer will spend $231 on gift cards, men tipping the scales more than women.
And while gift cards are popular to send, they are also popular to receive. According to a survey by the National Retail Federation, as many as 62 percent of shoppers said they would like to receive a gift card this holiday season.
Since as many as 90 percent of consumers said that they have not finished their holiday shopping, 26 to 50 percent are still planning on purchasing gift cards. And of those planning to buy the cards, 58 percent of younger adults, ages 18 to 35, intend to increase the amount they spend on them.
"For millennials, gift cards are about convenience and sticking to a budget," said Schatz. "They like the practicality of letting the recipient choose what they really want at a price point they can stick to."
And while e-cards are growing in popularity, physical gift cards are still the most popular.
"Physical cards are still most preferred–58 percent of consumers find it important when buying a gift card that can be delivered physically rather than email or mobile delivery and 69 percent of consumers still prefer to receive a physical gift card," said Schatz.
While gift cards can mean great sales for retailers, they also create the potential for fraud in the post-holiday season. According to a recent survey, 72.7 percent of retailers saw an increase in gift card/store merchandise credit fraud in the past year. In this year's holiday season alone, retailers will lose about $3.8 billion due to return fraud, according to the National Retail Federation's 2014 Return Fraud Survey.
-See this SVS press release
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