The more loyal the consumer, the better. Merchants’ most devoted customers tend to spend more money with them, return to their stores more often, and advocate more for their favorite brands. Knowing this, the shrewdest merchants have robust loyalty programs and are always looking for ways to improve them. Gift cards are key, as the 21st 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 study explores how U.S. consumers leverage gift card programs to stretch their dollars and better manage their budgets, along with the reasons they purchase from their preferred merchant.
Gift cards are increasingly working their way into loyalty programs, likely because 85% of consumers are joining them. Starbucks, for example, 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, incentive programs are the reason 55% of consumers buy gift cards for themselves. Here are some other noteworthy survey findings.
Balance consumer needs for speed and tangibility
Consumers are evenly split on whether they purchase digital or physical gift cards. As such, merchant gift card programs must navigate these differences to ensure all consumers are equally satisfied.
For those who prefer digital cards, merchants must focus on the speed they provide. This includes immediate delivery (63%), ease in sending compared to mailing physical cards (53%), and simplicity in purchasing compared to physical cards (50%). Alternatively, for those who prefer physical cards, tangibility is of utmost importance. Specifically, 85% of consumers want to give a physical present to someone, while 52% want something the recipient can unwrap.
When possible, 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 card brands (47%) 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 your gift cards where your customers likely shop. Consider grocery stores (Kroger, Publix, Acme Markets, etc.), big-box stores (Walmart, Target, etc.) and even wholesale retailers (Costco, Sam’s Club, BJ’s Wholesale Club). Think, too, of expanding distribution through trusted digital merchants like Gyft and eGifter 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, more than one in four (27%) consumers are using this feature. Even better, 58% of consumers are aware that they can send gift cards through P2P apps.
As P2P gift card awareness continues to grow, merchants are presented with an untapped revenue channel. And with almost one-third (32%) of consumers noting P2P channels lack their preferred merchant brands, now is the time for merchants to make their move.
Optimize consumers’ innovative budgeting needs
Gift cards play many roles, and lately consumers are turning to them to help with budgeting. Nearly two-fifths (39%) of consumers said gift cards provide a better way to manage money than cash. Further, of the 62% of consumers purchasing a gift card for themselves, one-fourth did so for budgeting/money management purposes. Even more impressive, most extend their gift card budgeting practice to their loved ones, including their spouse (68%), son (45%) or daughter (28%).
With gift cards becoming a growing budgeting strategy for households, merchants have a new avenue to help satisfy households’ growing budgeting strategy.
For more findings from the 21st Annual Prepaid Consumer Insights Survey from Fiserv, please click here, or contact us today to learn more about how we can help implement a gift card program that's right for your business.
About the study
The 21st Annual Prepaid Consumer Insights Survey from Fiserv explores the continued impact technology trends and marketplace conditions have on U.S. 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 1,100 U.S. consumers participated in the study, covering all age groups (18 and older), regions, and genders. The margin of error of this study is +/- 3%.
Source: All statistics cited are poll results from the 21st Annual Prepaid Consumer Insights Survey from Fiserv.
