When you and your team are looking for opportunities to expand accounts or get a foot in the door with merchants, start with omnichannel gift cards. ResearchAndMarkets.com predicts that total gift card sales in the U.S. will grow at a 7 percent CAGR to exceed $300 billion by 2029. Grocery and gasoline sales dominate the retail gift card market, accounting for 45 percent of sales, and CapitalOne Shopping reports that both retail and restaurant cards are in demand, with 57 percent of consumers buying retail gift cards and 52 percent purchasing cards from restaurants. The end-of-year holiday shopping season is peak time for gift `card sales. Over half of all consumers purchased at least one gift card in Q4 2024, building an 8 percent increase over 2023. For your clients to capitalize, they need to offer gift cards — and they need you to educate them on the value of omnichannel gift cards.
What’s Driving Growth?
Insights into what’s driving consumer demand for gift cards can help you advise merchants on the right solution for their business. Consumers buy gift cards because:
- They’re easy to buy
With gift cards, gift giving is easy. Omnichannel gift card solutions make cards even easier to buy, allowing consumers to purchase them in-store or online.
- People like to receive them as gifts
Giving a gift card is giving a shopping spree. The recipient can choose exactly what they want, rather than receiving an item they have to return or exchange.
- They’re easy to personalize
Getting a friend a gift card from their favorite store, restaurant, or activity is much easier than choosing an item. But it still allows consumers to tailor the gift to the person receiving it.
Don’t overlook that merchants should offer gift cards not only to meet demand but also to benefit their businesses. Gift cards can lead to revenue growth. Typically, the gift card is just the beginning of a sale because 61 percent of consumers spend more than the face value. Retailers also save money on returns. The person receiving the gift card gets to choose precisely what they want, rather than getting a gift that they exchange for something else.
Also, remind merchants that some people who receive gift cards don’t use them right away (or sometimes not at all). Bankrate reports that 43 percent of consumers have an unused gift card with an average value of $244. It’s not realistic to think of unspent gift cards as “money for nothing,” since merchants may be required to turn the value over to the state as unclaimed property. But they can treat the unspent balances as a “loan” that gives them a boost to revenue without having to use up inventory right away.
The Right Way to Offer Gift Cards
When merchants see the value in beginning to sell gift cards or upgrading their current solution, it’s important to advise them to make this revenue stream part of their overall growth strategy with the right technology. To meet demand for convenience, merchants should offer gift cards in every channel where they do business. Consumers need to be able to buy, load, or redeem their gift cards online and in-store, and their solution should give them the flexibility of using QR codes, using gift cards with text to pay, or offering a combination of gift and membership cards.
Also, make sure you give merchants all the tools they need for this part of their business, including card branding, multilocation management, flexible reporting, and an easy way for sales associates and customers to check gift card balances.
It’s Something Every Growth-Focused Merchant Needs
Whatever your clients sell — specialty retail items, groceries, dining, or services — they can benefit from gift cards… if they do it right. They need to offer gift cards that meet consumer expectations for convenience and ease of use on any channel.
Implementing a full-featured gift card solution doesn’t have to be difficult. With the right partner, you can offer merchants the gift card and value-added services they need. To learn more, contact us.
