The strength of January retail sales is reflected in the people who redeem their Christmas gift cards. The average adult received 3.2 gift cards this holiday season, up from 2.5 gift cards last year. Gift cards are more popular and this also moves spending into January. Consumers are also interested in receiving gift cards at times other than just Christmas.
A survey by Deloitte & Touche USA found:
- 80% of adults received at least one gift card at a clothing or grocery store.
- 33% received at least one restaurant gift card
- 14% received a gift card at a mall or mall
- 10% received a gift card that could be used at a variety of stores (eg, an American Express gift card)
- 5% received at least one for a personal service like a manicure or massage.
- 5% received at least one gift card to a website (eg eBay, Amazon)
Gift card price ranges ranged from $78 for an American Express card, while the lowest was for a $32 restaurant card. Bank gift cards are most likely to be used in January. Nearly 74% of these gift cards have been fully or partially redeemed by the end of January.
People were more likely to purchase full-price retail items with their gift cards. Many analysts believe that the “gift” aspect allows consumers to enjoy new products at full price.
Retailers also benefit when consumers redeem a gift card, with nearly 62% spending more than the card’s face value. This is an opportunity for retailers to increase sales, as sales cannot be reported until the gift card is redeemed.
Consumers also expressed interest in receiving gift cards for other holidays. For example, a gift card for an “experience” is very welcome because people are pressed for time. Getting a gift card for a trip to a restaurant or a massage or even a weekend getaway seems to be a trend that people are enjoying.
Teens enjoy gift cards because they are more eager to shop with their friends and are more likely to redeem their cards faster than adults. The survey showed that teens redeemed 76% of their gift cards vs. 61% of adults.
Gift cards keep on giving, after the holidays, especially for retailers. Gift cards are here to stay. Consumers enjoy using them and retailers enjoy receiving them. Gift cards are an appropriate gift for all occasions.
