Price-conscious consumers want more value, and they are using their gift cards to shop smarter
With the U.S. inflation rate currently over 7%, consumers are pulling back on their spending as prices for everyday items like groceries, gas, and clothing soar.
According to Fiserv’s Q2 2022 Gift Card Gauge, 51% of respondents are significantly reducing their impulse shopping and 46% are purchasing only what is necessary. Despite these purchasing shifts, just 23% of consumers said they are purchasing fewer gift cards due to inflation.
Conducted in May 2022, Fiserv’s most-recent study assessed the evolving landscape for consumer gift card purchasing and usage in today’s inflated marketplace.
Today’s price-conscious consumers want value, including purchasing more for less. Businesses should take notice, particularly since one-quarter of surveyed consumers are seeking out sales more than in previous months and 19% are using coupons more frequently.
The search for value is also impacting their eating habits. Specifically, more than half of consumers (55%) are eating at home more. When dining out, 10% have opted for casual rather than formal dining. Clearly, cost matters more than ever.
Although inflation has reshaped their spending habits, 51% of surveyed consumers say rising prices have not impacted their gift card usage. Those experiencing a change are using their gift cards to shop smarter, with 17% using them to counteract higher prices and 16% relying on gift cards to purchase necessities rather than wants.
Interestingly, inflation is also impacting consumers’ most desired gift cards, as they note the most valuable gift cards right now are from discount store/big box retailers (49%), food supermarket or grocery stores (38%) and gas stations (36%). This is a substantial change over April 2021 gift card preferences of online-only retailers, discount/big box stores and coffee shops at 51%, 39% and 33% respectively.
Graduation season, Father’s Day, and other milestone events are near, and gift cards still have their place. One-fourth of consumers choose giving gift cards over traditional gifts, while two-fifths say they would rather receive gift cards than traditional gifts.
For those receiving gift cards for milestone events, don’t be surprised if there is less on them than in previous years. Of those consumers who said inflation would influence the amount of money put on gift cards they purchase, 74% said it is causing them to put a lower value on the gift cards. Specifically, 38% of consumers will decrease the gift card amount purchased by 1-19%, while 36% of consumers will reduce the amount by 20% or more.
As consumers are looking to stretch their spending power, merchants have the opportunity to appeal to them through gift card promotions. More than one-third (37%) of consumers in 2022 have taken advantage of a gift card promotion, and another 58% say promotions would prompt them to purchase gift cards, despite inflation.
For merchants looking to launch gift card promotions, 37% percent of consumers are motivated by a bonus amount added to the gift card. 22% would choose a dollar amount discount on a gift card purchase, or a bonus gift card awarded with the purchase of a gift card.
Click here to see more findings from the Q2 2022 Gift Card Gauge.
Fiserv’s Q2 2022 Gift Card Gauge is a survey of over 1,000 U.S. consumers aged 18 and older, conducted to help merchants better understand industry trends, and how consumers use gift cards. The margin of error for this Gauge is +/- 3.059%.