4 in 5 Will Buy a Gift Card These Holidays

4 in 5 Americans will purchase at least one gift card this holiday season, according to an NRF survey conducted by BIGresearch and released in November 2011. Data from the “Consumer Intentions & Actions Survey” indicates this to be the largest proportion of consumers since NRF began tracking gift card purchasing intentions in 2006. Additionally, holiday shoppers are expected to spend an average of $155.43 on gift cards, the highest amount since 2007 and a 6.7% rise from $145.61 last year. Total spending on gift cards this winter holiday season is forecast to reach $27.8 billion, representing 12% growth from $24.78 billion in 2010.

According to a November BDO USA study, among the retailers surveyed that sell gift cards,57% expect their gift card sales to increase compared to 2010, representing a 21% rise in respondents from 2010, when less than half expected to see growth in their gift card sales. Meanwhile, according to an earlier NRF survey also released in November, most shoppers (57.7%) would like to receive a gift card this holiday season, ahead of clothing or clothing accessories (50%), consumer electronics or computer-related accessories (35.4%), and jewelry (22.8%).

Shoppers To Spend More On Each Card, Led by Men, Elderly

Gift card purchasers will spend an average of $43.23 per card this year, up 4.2% from $41.48 last year and 8.6% from $39.80 in 2009, according to the latest NRF survey. Men will spend significantly more on gift cards this year than women, shelling out an average of $46.19 per card compared to $40.47 for women. Older demographics are also likely to spend more than their younger counterparts, led by those aged 55-64, who intend to spend $45.47 on each card, compared to the $38.37 planned by 18-24-year-olds.

Among gift card purchasers, one-quarter plan to buy 5 or more, while only 13.7% will buy a single card. Adults over age 45 are again more likely to purchase a greater amount of gift cards: about 1 in 5 plan to buy more than 6, almost triple the proportion of 18-24-year-olds (7.6%) who intend to do so.

Department Stores Win Out

When it comes to which gift cards people will buy, most shoppers say they will give their friends or family members a gift card to a department store (38.7%), restaurant (33.8%), electronic store (19.8%), or an entertainment venue such as a night at the movies or music event (18.2%), although adults aged 55-64 prefer restaurants (36.6%) to department stores (33.4%) for their gifts.

Book stores (19.8%), coffee shops (15.9%), and discount stores (13%) also prove popular among gift card shoppers.

Practicality Reigns Supreme

Practicality is the most likely reason shoppers will buy gift cards this year, as 46.4% report they will buy gift cards because it allows the recipient to select their own gift. Convenience is also cited as a major factor, with 19.4% of gift card shoppers saying that gift cards are easier and faster to buy than traditional gifts. A further 6% say that it is easier to mail or ship a gift card than a traditional gift to out-of-town gift recipients. However, some concerns remain: 26.1% say that the impersonal nature of gift cards could cause them to buy less of them these holidays, while others are worried about fees and expiration dates (17.4%) and not knowing which company a recipient would want a card from (9.7%).

Information regarding e-gift cards becoming more personal, social, and mobile is available at MarketingVox.

About the Data: The NRF survey polled 8,502 consumers and was conducted for by BIGresearch from November 1-8, 2011.