Gift Cards Win Holiday: Demand Fueled by Flexible Delivery, AI, Loyalty Programs and Gift Cards for Returns

Associated Press

30-01-2025

During another record-breaking holiday shopping season with retail sales growing 4% over 2023, gift cards also saw significant year over year growth. According to the latest consumer research from global branded payments provider, Blackhawk Network (BHN), 56% of surveyed consumers reported that they purchased a gift card this holiday season, an 8% increase over 2023. The total average value of gift cards received also saw a jump, with surveyed consumers reporting the total value increased to $209 on average, a notable increase from $161 a year ago.
'In addition to demonstrable growth in gift card purchases, the industry saw increased demand for gift cards across a spectrum of use cases from promotions to returns, presenting unique Q1 opportunities for retailers,' said Jay Jaffin, chief marketing officer, BHN. 'Gift cards not only encourage foot traffic and repeat business, but also enable merchants to acquire new customers who are eager to spend their holiday gift cards in the beginning of the new year. Our research also found that gift cards helped consumers alleviate some financial stress during and after the holidays. Seventy-four percent of consumers said purchasing gift cards assisted them in sticking to their holiday budget and 59% said receiving a gift card eases financial stress after the holiday shopping season.'
Following the 2024 holidays, BHN surveyed US consumers to learn what gifts they gave, what they received, how they shopped and how they plan to spend or use their gifts in 2025. Key findings from the research include:
Digital gift cards saved the holidays
The 2024 holiday shopping season was shorter than in years past, driving many shoppers to seek solutions in a pinch on Christmas Eve and even Christmas Day. Flexible delivery options drove digital gift card purchases this holiday and helped last-minute shoppers deliver the perfect gift. Forty-nine percent of surveyed consumers purchased digital gift cards this holiday, up 5% over 2023. While Gen Z drove much of the increase with 60% having purchased a digital gift card, Boomers were twice as likely as younger generations to purchase digital gift cards at the last-minute.
AI was this season's holiday helper
According to BHN's 2024 Holiday Forecast, 50% of younger generations and 24% of older generations planned to use AI for holiday shopping. BHN's post-holiday research found 65% of younger generations and 37% of older generations actually used AI for holiday shopping, and 73% of all consumers found it to be a useful gift shopping tool. Surveyed shoppers mainly used AI to find the best prices (23%) and get product recommendations (22%), but shoppers also found AI helpful to create holiday gift lists (14%), make shopping easier and faster (14%), simplify their shopping experience (11%) and buy holiday gifts (6%).
Points, perks and promotions powered holiday spending
Deals, promotions and loyalty points alleviated some holiday financial stress for shoppers and gave them a little extra spending power this holiday. Of the surveyed consumers, 77% leveraged sales, deals and promotions to purchase holiday gifts, up from 72% in 2023. Using deals, consumers saved an average of $151, and 28% said they used their savings to purchase more holiday gifts. More consumers also exchanged loyalty points for gifts this holiday season. Fifty-nine percent of younger consumers exchanged loyalty points for gifts—up from 52% in 2023—while 40% of older consumers used points to cover holiday gifts, an increase from 31% in 2023.
Retailers can turn holiday hype to Q1 hustle
Most consumers surveyed plan to spend their holiday gift cards in the first two months of the year, including 83% of consumers that said they love using their gift cards to take advantage of post-holiday shopping deals. Holiday returns can be a Q1 pain point for retailers, but gift cards offer an opportunity to spin returns into gift card gold. Of surveyed consumers, 22% say they need to return a gift this year, up from 16% in 2023. Of consumers that need to make a return, 8 in 10 want gift cards when they return items. This is all good news for retailers, with 8 in 10 shoppers also reporting that they plan to spend more than the value of their gift card. On average, consumers surveyed plan to spend $81 more than the value of their gift card.
For more findings and insights for the year ahead, download the Gift Cards for the Holidays infographic.
Today, through BHN's single global platform, businesses of all kinds can tap into the world's largest network of branded payment solutions. BHN helps businesses grow revenue, increase loyalty, motivate and reward their teams, disburse funds and engage consumers. Branded payment solutions include the issuance and distribution of gift cards, eGifts, corporate payouts and rewards, along with the technology to deliver these products in seamless, integrated ways. BHN's network spans the globe with more than 400,000 consumer touchpoints. Learn more at BHN.com.
Courtney Brunkow
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SOURCE: Blackhawk Network
Copyright Business Wire 2025.
PUB: 01/30/2025 07:58 AM/DISC: 01/30/2025 07:58 AM