The COVID-19 pandemic affected every industry in one way or another. One might think that the gift card industry would have been negatively impacted, but it was not. In fact, gift card sales across AWG stores grew to more than $26.7 million dollars in 2020, a 9 percent increase over 2019. This trend continues in 2021 with AWG store’s sales currently up 23.3 percent over last year.
For over a dozen years gift cards have been the number one gifted gift. But what’s impacting the growth we’ve experienced? The easy answer, the pandemic. Even during a pandemic people still had birthdays, graduations, holidays and milestones to celebrate. However, the risk of contracting COVID-19 kept people from physically shopping stores looking for that perfect gift or gifting cash, instead shoppers found themselves opting for giving gift cards.
Some studies show that millennials and Gen Z consumers are pushing the market growth across the U.S. due to their desire to use them for self-use. Purchasing gift cards for self-use grew as people looked for more ways to conduct cashless transactions, shop online, gain rewards points, take advantage of discounts or promotions and stay within budget.
With report after report of data breaches around the world, it makes sense for people to feel more secure shopping online using a prepaid gift card rather than use their personal debit or credit cards. As cyber-attacks continue to grow this developing mindset is a good way to mitigate the risk of personal accounts falling into the hands of cyber criminals.
As with everything else, there is a shift to digital. So, it’s not surprising to see another emerging trend of contactless payments through the adoption of digital wallets. Surveys show that 55 percent of shoppers report having used a digital wallet of some kind in 2020. Gift cards can be easily stored on your phone making them easy to transport anywhere. Digital wallets also make it easy for consumers to maintain social distancing and eliminates the passing of payment from hand to hand while shopping a physical location.
Needless to say, the last couple years have shown us a lot about the evolution of gift cards from presents to normal everyday use. Magnifying the importance of offering customers gift card options in stores.
