Pay Op-Ed | November 2014 | www.paybefore.com
In Viewpoints, prepaid and emerging payment professionals share their
perspectives on the industry. Paybefore endeavors to present many
points of view to offer readers new insights and information. The opinions
expressed in Viewpoints are not necessarily those of Paybefore.
All I Want for Christmas Is a Gift Card
Gift card sales grow as consumers start to recognize what recipients really want.
By Tammy Durston, Blackhawk Network
T
Is It Really the
Thought That
Counts?
90%
You can establish,
89%
88%
define, solidify, repair or
86%
even ruin a relationship
84%
84%
with a gift. Nothing else
82%
you buy has such social
80%
81%
significance. Buying a
78%
76%
gift is not like buying
No returns
Can buy something for
Can get what they really
laundry detergent. Gifts
themselves without
want
spending extra money
are symbolic of relationships, and recipients
Source: Blackhawk Network, Gift Card Tracking Study, February, 2014.
look for the meaning
N=809
behind the gift. Deterreasons people want gift cards. We’ve seen
mining the status of a relationship and
the progression of the gift card from a new
coming up with ideas for good gifts that
type of gift to the mainstream. When we
symbolize that relationship often is a
first launched consumer-sentiment studies
challenging social and economic activity,
in 2006, some groups of consumers felt
making picking out the perfect gift
gift cards were too impersonal. This
daunting. And, above all, the giver wants
attitude was especially prevalent among
the recipient to be happy with the gift.
older consumers. Yet, younger people
wanted gift cards. This created a gap
between what was desired versus what was
From Getting to Giving
being purchased. Every year, however,
We’ve spent nearly a decade studying the
we’ve seen more and more older consumers buying gift cards to please the younger
crowd.
One reason the gap has narrowed and
Tammy Durston is senior director of research at Blackhawk Netolder consumers are buying more gift
work, a Pleasanton, Calif.-based provider of prepaid and financial
cards is that these consumers began
payments products. Her research helps guide Blackhawk’s strategy
receiving gift cards themselves and liked
for its diverse product lines and geographies. She can be reached at
them. We’ve seen a correlation between
[email protected].
he National Retail Federation (NRF)
just published its annual holiday
consumer spending survey,1 which
showed, for the eighth year in a row, that
gift cards are the preferred gift for the
winter holidays. Sixty-two percent of
respondents would rather have a gift card
than clothing, books, CDs, DVDs, video
games, electronics or jewelry. This will
translate into a near $100 billion spend on
gift cards in 2014.2
Blackhawk Network’s research department has been tracking the preference of
gift cards over physical gifts for the last
five years. When respondents are asked
which they prefer: a gift card from their
favorite store versus a gift selected for
them, about 75 percent say they’d prefer
the gift card.3 Why are gift cards so
coveted? For recipients, it’s about control
and choice. For some givers, it’s about
convenience. For others, it’s the reassurance of knowing recipients are getting
what they want.
Tammy Durston
©2014 Paybefore. All rights reserved. Forwarding or reproduction of any kind is strictly forbidden without the prior consent of Paybefore.
Pay Op-Ed | November 2014 | www.paybefore.com
prepaid. mobile. emerging payments.
Viewpoint: All I Want for Christmas Is a Gift Card
the receipt of a gift card and a subsequent
purchase of gift cards for others.
Now that most people have received a
gift card, consumer attitudes toward gift
cards have changed. Today, only 4 percent
of respondents in our consumer-sentiment
study describe gift cards as very impersonal, compared with 17 percent in 2008.4
More Control, Less Anxiety
People generally are very happy receiving
gift cards. They are desired gifts because
recipients can exert some control over what
they ultimately get. Gift cards provide the
freedom of choice without the hassle of
returns.5 Recipients also appreciate the
ability of being able to buy something for
themselves without spending any of their
own money.6 It’s as if they’re given a
shopping spree (see chart).
For gift-givers, gift cards help lessen the
anxiety that comes with wanting to select
“the perfect gift.” Anxiety around giftgiving escalates during the holiday season.
But why does something that’s supposed to
be enjoyable create so much anxiety?
Professor David Wooten at the University
of Michigan developed a model regarding
the role of anxiety in gift-giving, where he
found that people become anxious when
they want to make an impression but aren’t
sure they can.7
This was reiterated in a Blackhawk
Network study on the fear of gifting. More
people are afraid of buying an inappropriate gift than driving a car.8 Gift cards offer
a solution to this problem by bridging the
gap between cash, which is still perceived
as impersonal, and an actual item, which
can be a risky gift. Gift cards are perceived
as a more personal gift than cash by most
(81 percent) consumers.9 Only 5 percent
feel that when receiving a gift card from
someone, there was not much thought put
into the gift.
Part of the reason gift cards are perceived as more personal than cash is that
the recipient tends to treat herself when she
uses the gift card and cash more often is
used to pay bills or to buy household
necessities.10 The gift-giver also chooses a
specific gift card for that person, so
personalization is not lost. Even network
branded gift cards are chosen specifically
for recipients who value the additional
option of choosing a gift from practically
any store. In a study specifically about Visa
gift cards, gift-givers said they mostly buy
Visa gift cards when they’re unsure of the
recipient’s wants or needs (teens, etc.), and
91 percent of Visa card receivers were
satisfied with receiving one.11
Not the Lazy Way Out
The claim that people give gift cards
mainly due to convenience is largely false.
Although our recent segmentation study
identified one group of gift card shoppers
who primarily are motivated by their own
convenience—about one-third of gift card
mall shoppers—all others were motivated
by what the recipient wants. In fact, 84
percent of the respondents said they prefer
to give gift cards so the recipient can
choose what he or she wants.12
In 2008, with our first segmentation
study, we found a segment of consumers
who disliked gift cards because they
preferred giving gifts with more emotional
meaning and perceived gift cards as fairly
impersonal. In 2014, this segment has
changed radically. The same consumers
who want to purchase emotionally meaningful gifts now prefer to buy gift cards
because they recognize the emotional value
of “choice” and feel it adds to the overall
quality of the gift.
Not a Novelty Anymore
Gift cards have become a mainstream
gift for many occasions and holidays. This
is evidenced in many studies, including
Blackhawk Network’s own surveys.
Contrary to some of the recent headlines
Fast Fact
Retailers want shoppers to redeem
their gift cards 100 percent. When
shoppers use gift cards, 89 percent
most likely spend more than the
value of the card. Gift cards also
drive shoppers to retail or online
outlets.13
connected to the Deloitte Holiday Survey,
which suggest that gift cards are a novelty,
most industry studies confirm that gift
cards are a common, popular and wanted
gift.
1
National Retail Federation, https://nrf.com/media/
press-releases/gift-givers-plan-splurge-friends-familythis-holiday-season
Mercator Advisory Group, 11th Annual U.S. Prepaid Cards
Market Forecasts, 2014-2017. November, 2014
2
3 Blackhawk Network Gift Card Tracking Studies, 2009-2014
Blackhawk Network, Gift Card Segmentation Study, April
2014. N=2,532
4
89 percent said they like receiving gift cards because they
can get what they want. 81 percent like receiving gift cards
because they don’t have to return a gift they did not like.
Blackhawk Network, Gift Card Tracking Study, February, 2014.
N=809
5
84 percent like to receive gift cards since they get to buy
something for themselves without spending any extra money.
Blackhawk Network, Gift Card Tracking Study, February, 2014.
N=809
6
Wooten, David. (2000) “Qualitative Steps toward an
Expanded Model in Gift-Giving,” Journal of Consumer
Research, 27, 84-89.
7
8
Blackhawk Network, Holiday Fears, 2010.
9
Blackhawk Network, Gift Tracking Study, N=809
10
Blackhawk Network, Gift Tracking Study, N=809
Blackhawk Network, Visa gift card study, June 2014.
N=1,232
11
Blackhawk Network, Gift Card Segmentation Study, April
2014. N=2,921
12
37 percent said they received a gift card from a store that
he or she normally didn’t shop at then began shopping there
on a regular basis. Blackhawk Network, Gift Card Segmentation Study, April 2014. N=2,532
13
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