The more loyal the consumer, the better. The most devoted customers of a Merchant tend to spend more money with them, return to their stores more often, and advocate more for their brands. Knowing this, the shrewdest merchants have robust loyalty programmes and are always looking for ways to improve them. Gift cards are key, as the UK Annual Prepaid Consumer Insights Survey from Fiserv shows.
The findings shed light on how gift cards and customer loyalty go hand in hand, and the versatile ways gift cards are being used. The survey explores how UK consumers leverage gift cards to stretch their pounds and better manage their budgets, along with the reasons they purchase from their preferred merchant. All statistics cited below are based on consumer polling results from the UK Annual Prepaid Consumer Insights Survey.
Gift cards are increasingly working their way into loyalty programmes, likely because 78%* of consumers are joining them. For example, in some countries Starbucks provides double stars (loyalty points), among other incentives, when consumers pay for their purchase with a gift card. This prompts Starbucks regulars to reload their gift cards, leading to more revenue for the coffee chain giant.
Starbucks is not alone, as various well-known brands are making it easier and more lucrative for consumers to purchase gift cards. This signals the evolution of the gift card as it transitions from being a one-time plastic object to an integral part of the customer loyalty experience. In fact, the survey shows 43% of consumers are buying gift cards to use themselves to avail of incentive programmes. Below are some other noteworthy survey findings.
Balance Consumer Needs for Speed and Tangibility
The survey indicates more consumers favour physical (55%) than digital gift cards (45%). As such, merchants must navigate these differences to ensure all consumers are equally satisfied.
For those who prefer digital cards, the survey shows consumers enjoy the benefit of immediate delivery (73%), ease in sending compared to mailing physical cards (48%) and simplicity in purchasing compared to physical cards (41%). Alternatively, tangible cards are favoured by consumers who want to give a physical present to someone (85%), while 44% want something the recipient can unwrap.
Consumers Prefer One-Stop Gift Card Shopping
For consumers, convenience is king. More consumers noted they prefer to purchase gift cards from businesses offering a variety of gift cards (44%) compared to the actual place where the gift card will be redeemed (34%).
Beyond physical stores and websites, merchants should identify and foster partnerships that get the gift cards where their customers are likely to shop. Consider grocery and big box stores like Tesco, Sainsbury’s, Asda, Morrisons, Argos, and Currys. Merchants should consider expanding distribution through trusted digital merchants like GiftPay for a simple, secure way for consumers to purchase multiple gift cards from a single website.
Tap Into P2P Apps for Additional Revenue
While sending gift cards through a peer-to-peer (P2P) app may seem unusual, the survey indicates one-third (34%) of consumers are aware that they can send gift cards through P2P apps. Further, of the 50% of consumers surveyed that are using this feature, nearly three-quarters (72%) said it was easy and convenient. Although this includes such brands as Adidas, Bonmarché, Nintendo eShop, Xbox, Uber Eats and Just Eats, 17% of consumers surveyed said P2P channels lack the merchant options they desired.
As P2P gift card awareness continues to grow, merchants are presented with an untapped revenue channel. And with nearly one in five consumers* noting P2P channels lack their preferred merchants, now is the time for merchants to make their move.
Optimise Consumers’ Innovative Budgeting Needs
Gift cards play many roles, and lately, consumers are increasingly turning to them to help with budgeting. One-third (34%*) of consumers surveyed said gift cards provide a better way to manage money than cash. Further, the survey indicates that of the 34% of consumers purchasing a gift card for themselves, one-fifth do so for budgeting/money management purposes. Some even extend their gift card budgeting practice to their loved ones, including their spouse (63%) or an extended family member living within the household (28%).
With gift cards becoming a growing budgeting strategy for households, merchants have a new avenue to help satisfy consumers’ household budgeting needs.
Click here for more findings from Fiserv's UK Annual Prepaid Consumer Insights Survey.
About the Study
The UK Annual Prepaid Consumer Insights Survey from Fiserv explores the continued impact technology trends and marketplace conditions have on UK consumers as they increasingly use gift cards to maintain budgets, send gifts through new channels, and meet their shopping needs. Conducted in November 2023, over 1,000 UK consumers participated in the study, covering all age groups (18 and older), regions, and genders. The margin of error of this study is +/- 3%.