Gift card sales to top $110 billion
Boston -- A report issued Monday by CEB TowerGroup found that sales of gift cards will surpass $110 billion and spillage will drop 20% to $1.7 billion.
Propelling gift card sales past the $100 billion dollar mark is an increase in open loop gift cards purchases like those offered by American Express, Visa, Mastercard and Discover ($40 billion), restaurant gift cards ($19 billion) and merchant cards ($36 billion).
While electronic gift card sales have increased since tracking began in 2010, sales in 2012 are only projected to reach $3 billion, reflecting slower than initially projected adoption.
In 2012, CEB forecasts that roughly 85% of the U.S. population will exchange gift cards. In addition to a higher volume of card sales, 75% of consumers will spend the full amount of money on the card and 30% will spend $25 more than the value of the card, which is helping lower spillage – the amount of money left on a gift card that a consumer will never spends – to $1.7 billion.
Gift cards rebounded well after two years of slow growth in 2008 and 2009 due to the unforeseen economic downturn, according to the report. CEB TowerGroup estimated that the market will top $130 billion in sales by 2015 with electronic gifting growing from $3 billion in sales (2012) to roughly $16 billion by 2015.
"Consumers continue to flock to gift cards as a popular gift choice due to the variety and assortment of cards available," said CEB TowerGroup senior research director Brian Riley.