The average U.K. consumer spends £41 more than the original value of their gift card according to First Data’s U.K. Prepaid Consumer Insights Study.
The study looked at trends in branded currency, giving business owners insight into how gift cards can benefit and grow their businesses. This year’s study was based on survey data from more than 1,000 U.K. consumers and aggregated responses across four unique age groups: Generation Z (ages 18-23), Millennials (ages 24-37), Generation X/Y (ages 38-53), and Boomers (age 54+).
Consumer Preference Shifts Toward Digital
First Data’s U.K. Prepaid Consumer Insights Study results showed increased interest for digital currency and a growth trajectory that is expected to continue. The study found that 55% of consumers purchased plastic gift cards, while 45% of consumers purchased digital gift cards in 2018. While a majority of purchasers still prefer plastic, consumers are accelerating their use of digital cards largely due to convenience – as these can be sent instantly and are easier to reload.
Gift Cards Impact Consumer Purchasing Behaviour
The study also identified that 44% of U.K. consumers are likely to visit a store more often as a result of receiving a gift card, and 74% spend more than the value of their gift card. The most commonly visited stores based on consumers’ preference for purchasing gift cards included: department stores (30%), food supermarkets or grocery stores (26%), and online-only merchants (17%). Petrol stations (4%) and fine dining restaurants (4%) received the lowest gift card spend.
Gift Cards: A Preferred Brand of Currency
Last year, U.K. consumers spent on average £203 or 38% of their annual gifting budget on gift cards. And, while 81% of consumers surveyed purchased a gift card as a present for an occasion or event, one in three respondents spent more on a gift card than a traditional gift. Although very few consumers purchased a gift card for themselves exclusively, primary reasons for doing so included receiving a discount or to receive loyalty rewards. The study also showed that consumers self-purchasing gift cards spend more than when purchasing for others. Other reasons for reloading gift cards included shopping online and budgeting.
Read the full survey in the FinTech Alliance’s Knowledge Bank