Gift cards don't just serve as rewards; they also encourage consumers to spend more than they might otherwise, at stores they don't typically visit. Those are among the findings in a new report from payment solutions firm First Data, which examined the spending behavior of more than 1,000 consumers in the U.K. The research revealed that the average consumer spends about US$53 more than the original value of their card, and that more than one-third of respondents (34 percent) visit a store they would not have otherwise, due to receiving the gift card.
Additionally, 44 percent of respondents said they are likely to visit a store more often as a result of receiving a gift card, while 74 percent expected to spend more than the value of their gift card. Department stores were the type of retailer most often visited (cited by 30 percent of respondents), followed by supermarkets or grocery stores (26 percent) and online-only merchants (17 percent).
The "U.K. Prepaid Consumer Insights Study" findings also reflected the continuing interest in physical gift cards, even as digital gift cards and branded currency now make up a major segment of the market. Fifty-five percent of consumers reported purchasing plastic gift cards, while 45 percent purchased digital gift cards in 2018 (the report cited the growth of the latter, due to the speed with which they can be received and reloaded).
John Gibbons, executive vice president, head of EMEA and co-head of global financial solutions at First Data, emphasized that the findings reflect an opportunity for business owners "to drive more sales, strengthen their brand and bolster customer loyalty by implementing smart branded currency strategies. From employee rewards and customer service programs to social media promotions and targeted marketing campaigns, both physical and digital gift cards offer valuable incentives to both businesses and consumers."
For an infographic of these findings, click here.