Gift cards: an opportunity in the face of the supply chain crisis


Gift cards: an opportunity in the face of the supply chain crisis

Gift cards were first adopted by department stores in the 1930s.

Photo: Justin Sullivan / Getty Images

The US economy is suffering from supply chain problems and growing shortages of products.

Companies like Apple, has also cut its production, and is encouraging for consumers to give away gift cards to ensure that most households have gifts under the Christmas tree.

According to a survey conducted by the payment service Blackhawk Network, Consumers plan to increase gift card spending by 27% this holiday season, until reaching an average of $ 270 dollars per person. This increase will cause cards represent 40% of total gift purchases.

Gift cards have come a long way from being an offer for a distant relative or the head of the company to being what many Americans, especially the very young, want most.

For the giver, the cards also eliminate the anxiety of choosing an item for a friend or family member in the endless aisles of the Internet. About 75% of millennials prefer to receive gift cards over physical gifts, according to Blackhawk.

The gift card market

The global prepaid card industry exceeded $ 2 trillion last year thanks to the increase in gift cards, as estimated by Global Industry Analysts.

With this accelerated growth, the market should reach $ 4.1 trillion by 2027, 50% more than the company’s estimate before the pandemic.

Retailers are also increasingly using gift cards to attract new customers and to be able to drive purchases beyond December and may extend into January and February.

What’s more, gift cards increase sales because shoppers tend to spend more than they are worth. And if they don’t redeem all of the value, that’s good for the bottom line of the retailer.

According to Blackhawk, consumers spend 40% more than the value of a gift card.

Gift cards were first adopted by department stores in the 1930s and boomed when retailers switched to plastic vouchers in the 1990s. Today, more than half of American retailers they offer them.

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