The Season for Gift Cards
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21 December 2011Zilvinas Bareisis
Christmas is the time of giving, and so the gift cards are definitely "in season." Gift cards come in all shapes and forms - from a single retailer and the shopping malls, in various denominations, single-use and reloadable, as a plastic card or as an e-voucher, etc. They are clearly convenient for the person who gives (easier to decide than the actual present), receives (can buy what they want) and even the retailer (people tend to spend more than the actual amount on the card). Also, gift and reloadable cards have come a long way - today they are usually cheaper than they used to be before, the fees are more transparent, and many no longer expire or can be easily renewed. Plus, there are services allowing you to exchange or cash-in the unwanted cards. However, the adoption rates seem to be very different in various markets. US is clearly the leader with the estimates for the gifts cards market size ranging from $90 to over $100bn for 2011. On the other hand, the UK Cards and Voucher Association estimates the gift card sales to be only £4bn in 2010. And that includes business to business sales of gift cards and gift vouchers to corporations for use as customer incentives, employee rewards and insurance replacement. Even accounting for differences in the overall market size and a potential growth in the last year, it seems that the Brits are simply less keen on gift cards than the Americans. Every year, First Data runs a Consumer Insight Study on gift cards in the US and Canada and in 2010, they extended the survey to the UK and Germany. It was interesting to see that of all the UK consumers who have not purchased and did not intend to purchase a gift card, 46% said that the primary reason was that "gift cards were not personal enough." 29% said they "already knew what to get as a gift," while further 21% simply "didn't think of buying a gift card." Everything seems to be going digital these days - music, films, books, holiday cards, even gifts. Obviously, there is a time and place for that and much of it is incredibly convenient. But are we in danger of losing something here, especially when it comes to gifts? That personal touch and thought that shows another person we really care? As one observer of the music industry asked rethorically when lamenting the demise of vinyl: "has any boy ever wooed a girl by inviting her 'round to listen to his iTunes?" Something perhaps worth keeping in mind for that last-minute gift shopping. Happy Holidays and see you in the New Year!
Industry or Business Focus
Asia-Pacific, EMEA, LATAM, North America