This holiday season is shaping up to be the year of the gift card. Nearly 1-in-3 U.S. adults say it’s ‘very likely’ they will be giving gift cards this year (excluding those ‘not sure’), up 12% from last year. An additional 35% say they’re ‘somewhat likely’ to purchase gift cards. All in all, just a little over a third of U.S. adults will not be buying gift cards this year, indicating gift cards will be a major source of revenue for retailers this season.

What’s behind the gift card boom?

Shoppers cite ‘convenience’ as the number one reason they’ll be purchasing gift cards this year. That’s up five percentage points from 2022, suggesting convenience (including online shopping) is a top priority among this year’s holiday shoppers. Hard-to-please friends and family members also rank high on the list of motivations driving gift card purchases, which rose two points from last year. 

Subsequently, respondents were less likely to say higher prices on goods and supply chain issues were the top reason they’ll be handing out gift cards (both down four points from this time last year).

Who are the gift-card givers?

Here are four key insights from ongoing holiday tracking by the CivicScience InsightStore:

  • Those who haven’t started their holiday shopping yet: Expect plenty more gift card sales to transpire in the months ahead – at the time of writing, 7-in-10 holiday shoppers have not started holiday shopping yet, and more than a third of this group (38%) are very likely to purchase gift cards. An additional 35% of these future shoppers say it’s somewhat likely they’ll be purchasing gift cards.
  • Those who plan to do most of their holiday shopping at discount stores such as Walmart and Target: In fact, 45% are very likely (and 36% are somewhat likely) to buy gift cards, far outnumbering intent for those who are shopping elsewhere. The one exception is specialty chain store shoppers (such as Gap and Best Buy) – 40% are very likely (with 42% somewhat likely) to consider gift cards. Those shopping local and small businesses, on the other hand, are far less likely to go the gift card route, as just 24% are very likely to buy gift cards, likely opting for unique and one-of-a-kind gifts.
  • Shoppers who plan to spend more on the holidays this year: They’re nearly twice as likely to give gift cards as those who expect to spend less (46% compared to 24% ‘very likely’). Gift cards may be an easy out for gifts, but according to consumers, they’re not necessarily the cheaper option.
  • Those who want to receive gift cards: Interestingly, nearly half of those who want to receive gift cards as gifts this year are also very likely to give out gift cards. Those who are hoping for physical gifts, such as clothing and electronics, are the least likely to purchase gift cards. It’s worth noting that gift cards rank as the most popular gift to receive, more so than physical gifts or experiences. Nearly 3-in-10 (29%) of this year’s seasonal celebrators say they would prefer gift cards – up from 26% in 2022. That’s compared to 19% who prefer physical gifts and another 19% who want experience gifts such as concert tickets, both slightly less popular than last year. 

The gift that keeps on accumulating.

Lastly, CivicScience data show that a high percentage of Americans are sitting on unused gift cards. Out of those who say they typically buy and/or receive gift cards, the majority (63%) have some amount of cash balance that they have yet to spend. Slightly more card recipients (33%) have less than $100, but 28% say they have more than $100 in unused gift cards. 

What’s more, those who plan to give out gift cards this year are significantly more likely to have unused gift card cash than those who don’t anticipate giving gift cards.

Thus, the gift-card cycle looks poised to continue on into the 2023/24 holiday season. For more in-depth insights, including how your target consumers are gearing up for the holiday season, get in touch.