The gift card craze that buoyed retailers' Christmas and January sales is rooted in high levels of consumer satisfaction, according to a study sponsored by gift card specialist Giftex, in which consumers reported good previous experiences with gift cards.
Perhaps more importantly, the study predicts that sales of gift cards are set to significantly increase during the 2007 Christmas shopping season.
Consumers like gift cards
The study examined the attitudes and behaviours of more than 300 randomly selected consumers with relation to gift cards, and found that more than 81% have had good experiences with gift cards. Conversely, less than 10% reported having negative experiences with gift cards.
Figure 1: Good experiences with gift cards
Most importantly to retailers, the survey shows that this positive attitude is likely to translate into increases in future gift card purchases. Study respondents anticipate purchasing 36% more gift cards in the 2007 Christmas season.
Respondents also said they plan to purchase an average of 3.74 gift cards this year, up from 2.74 in the 2006 holiday season. Additionally, 78.6% of consumers said they intend to buy gift cards in 2007, compared to 64.9% who purchased them in 2006.
"Gift cards continue to resonate with consumers because they address a real need," explained Professor Dan Horne, a marketing professor at Providence College, Rhode Island, USA, and one of the research project's leaders. "The data in this study shows that it is not about hype but about what works. In some cases, gift cards are great options."
Not for all occasions
But Horne also cautioned against thinking gift cards are perfect for every occasion. "The data is very clear there are situations where gift cards are acceptable and situations where they are not viewed quite so favourably. They are certainly not going to replace the presents under the tree on Christmas morning."