Gift card sales will increase nearly $14 billion over the next five years, according to Packaged Facts' "US
Market for Prepaid Cards with a Focus on Gift Cards" report.
The cards are part of an overall $81 billion market for prepaid cards.
"Gift cards are revenue drivers for
merchants, who benefit from consumers' tendencies to spend more in the
store, for banks, who charge fees for use and benefit from increased
electronic transactions, and for third-party processors, who provide
back-end processing and maintenance," said Tatjana Meerman, publisher of Packaged Facts.
More than one-third of consumers surveyed who purchased gift cards in the last 12 months
said they expected to spend more on gift cards during the next 12 months, and 9.1%
said they expected to spend "significantly more."
More than half of gift card
redeemers often or always spend more than the card value, and most likely
over two store visits rather than one.